Blackberry stops building own smartphones, shifts focus to software
BlackBerry has finally decided to close the shutters on the company’s in-house hardware development department. Instead, the management has planned to focus entirely on a software and services business model.
The inevitable happened
Going back to April, John Chen, CEO of Blackberry had said,
“If by September, I couldn’t find a way to get there, then I need to seriously consider being a software company only”.
Apparently, what he said back in April has turned into reality today.
“The company plans to end all internal hardware development”
says Chen in the quarterly results released today. Further, he expresses the plan to outsource the hardware development to Blackberry’s partners.
BlackBerry has been a popular choice for many during the last decade. That is mainly because of the simple phone designs that were suitable for professional use. Apparently, Android and iPhone had swept a huge portion of smartphone market by the end of last decade. During the last couple of years, the company had suffered big losses. So much so that they even gave up their own BB10 OS and put Android instead. The BlackBerry Priv with Android renewed everyone’s hope in the company. However, the high price and poor hardware pulled BlackBerry further down the hole.
Software and services – Blackberry’s new hope
Blackberry’s software department seems to be doing quite well these days. They have managed to secure a big software licensing agreement with a telecom joint venture in Indonesia. Furthermore, Chen continues,
“We also completed initial shipments of BlackBerry Radar, an end-to end asset tracking system”.
The company had seen a 15 cents loss per share during the last quarter. However, the financial and business restructuring has brought the losses to 5 cents a share. It will take some more effort on their part to see profit on their shares. That will not be too long, as analysts have already expressed a possibility of breaking even this fiscal year.
Nokia faced a similar fate
BlackBerry is not the only company that has suffered huge losses lately. Nokia, which once was an independent phone manufacturer, is struggling to find a decent home. Microsoft had acquired Nokia Devices division in 2014. The acquisition was supposed to boost the sale of the Nokia phones loaded with Windows Mobile OS. Things did not turn out as expected and the market share kept declining.
Eventually, Microsoft laid off the hardware department and focused on software and services division. Finally, Satya Nadela, CEO of Microsoft sold Nokia to Foxconn when he saw that it be of no benefit to the company.