BlackBerry on Wednesday said it would cease internal development of its hardware and will transfer that function to its partners. While the BlackBerry-branded devices will remain on the market, BlackBerry itself will focus completely on software and will not invest in development of devices. The move edges the company closer to exiting the hardware business after years of considering such a move.

“The company plans to end all internal hardware development and will outsource that function to partners,” said John Chen, CEO and chairman of BlackBerry. “This allows us to reduce capital requirements and enhance return on invested capital," continued Chen.

Less than three years ago BlackBerry inked a strategic partnership with Foxconn, under which the two companies jointly developed certain BlackBerry-branded smartphones. Foxconn then built the hardware and managed the entire inventory associated with these devices. Now, the company intends to cease all of its hardware-related R&D activities and outsource this function to others.BlackBerry will now focus on development of extra-secured versions of Google’s Android operating system (recently the company introduced its own version of Android 6.0 that is used on the DTEK50 smartphone) as well as applications with enhanced security available through its BlackBerry Hub+ service.

In addition to Foxconn, BlackBerry has worked with other hardware makers. BlackBerry’s DTEK50 smartphone released earlier this year resembles Alcatel’s Idol 4 handset developed by Chinese TCL. Therefore, right now BlackBerry has at least two partners, which can build smartphones carrying the well-known brand all by themselves. In fact, this deal with BlackBerry puts TCL into an interesting position because it now can make handsets both under BlackBerry and Palm brands (in addition to Alcatel trademark, which TCL uses for its smartphones).

Today, BlackBerry also announced its first licensing agreement with joint venture PT Merah Putih, an Indonesia-based company. Under the terms of the agreement, the latter manages production and distribution of BlackBerry-branded devices running the BlackBerry’s Android software. While it is not completely clear to which degree PT Merah Putih develops its hardware in-house (typically, such companies outsource design of their products to others), it is more than likely that the actual devices are made by an ODM, such as Foxconn or TCL.

BlackBerry has been considering an exit from the hardware business for several years now, ever since the company appointed John Chen as CEO. The head of the company has said on multiple occasions that software and security technologies are the main strength for BlackBerry and warned that the firm could drop hardware completely if this business is not profitable. As it appears, BlackBerry will cease development of its smartphones, but will allow others to do it. Therefore, BlackBerry-branded devices will remain on the market, but the company will not spend big money on their development.

Source: BlackBerry

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  • Ironchef3500 - Wednesday, September 28, 2016 - link

  • danbob999 - Thursday, September 29, 2016 - link

    Virtual keyboards improved a lot since then. Keyboards such as Swype and Swiftkey changed the way we type.
    But the original iPhone virtual keyboard was worse than a physical keyboard. It still saved a lot of space, but was worse when typing.
  • Lolimaster - Wednesday, September 28, 2016 - link

    They should ironed their small business, enterprise approach instead of trying to be mass-consumer oriented which they never were.
  • hero4hire - Wednesday, September 28, 2016 - link

    Indeed. They should gone further and focused solely on enterprise and made their fortune selling niche secure smartphones and MDM / security. Plenty of others do that today. They could have large accounts and government with maybe a portal for smb. Some other comments here are as clueless as the RIM(blackberry) CEOs. The market moved. Instead of chasing the masses why not leverage your brand and become a new IBM for mobile? Instead we got mass market gimmicky smartphones consumers didn't want.
  • melgross - Wednesday, September 28, 2016 - link

    One reason is because large enterprises and governments don't want to take the chance with a small company, for critical devices and services.
  • Samus - Wednesday, September 28, 2016 - link

    Small company? Blackberry is still a very large company, even after hemoraging half their value in 5 years.
  • Lolimaster - Wednesday, September 28, 2016 - link

    Aside from core apps, there's zero differecen between OS's (for casuals, just a bunch of low budget crappy games).

    Great video/music player
    Chtome/Firefox/Opera/Your own browser
    PDF/image/office support for work/students and comic/manga reading
    Easy to use camera software

    You don't need anything else. The other apps like whatapp/skype/weather/facebook/etc are a given.

    Maybe make partnerships with japanese game developers to port key mobage games to your OS.

    I mean, anyone can start up their own smartphone bussines with a propietary OS and do things right (or whatever is annoying OS wise on android/ios). Just don't sell it like "omg the definitive OS, gonna reach 50-100M uses by xxx year, just enphasize simplicity.
  • BillBear - Wednesday, September 28, 2016 - link

    Tell it to Microsoft.

    Without a vibrant third party app ecosystem, you're not going to succeed in this market.
  • tbutler - Wednesday, September 28, 2016 - link

    Or Palm/WebOS. Or Nokia/Maemo/Harmattan. Or Firefox.
  • Samus - Wednesday, September 28, 2016 - link

    WebOS had more developers in 2009 and 2010 than Android. WebOS's problem wasn't apps, it was HP, or more precisely Leo Apothiker.

    The HP Veer and Palm Pre 3 were both considerably ahead of their time in many key areas as well. I'd say the only real problem with the prior devices was build quality, which was ironed out by their end of days.

    RIP Palm. Our only viable third candidate to supplant this duopoly of Android and IOS.

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