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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  • Alexvrb - Wednesday, September 28, 2016 - link

    PalmOS was never a viable alternative as long as it was tied to a trickle Palm/HP devices. If they had partnered with a couple of big phone manufacturers they might have made a dent back when they had momentum.
  • goatfajitas - Thursday, September 29, 2016 - link

    Possibly true, but more specifically Palm had some massive hardware quality problems. Carriers were simply sick of dealing with all of the returns and that hurt them alot. Taking the lousy hardware out of the equation, WebOS was amazing. I still miss it to this day. It's UI was years ahead of anything else, even IOS and Android of today cant quite touch it. Both have somewhat mimicked it, especially in the multitasking UI/task switching, but neither has quite hit the mark.
  • Alexvrb - Thursday, September 29, 2016 - link

    Lots of the modern manufacturers have major quality issues. Not every model, of course, but there are some stinkers. But no matter how many flawed phones are sold, they typically either repair or replace them and try to avoid such pitfalls with the next model. Only Apple can get away with blaming the end-user, and even then they're not as bulletproof as they once were. Regardless people keep buying new models of smartphones and they keep cranking them out. But again for that to work you have to take care of the customer on models with problems and release updated models on a regular (and fairly aggressive) cadence.

    Palm and later HP thought they could be like Apple. That's pretty hard to do. If they had approached it more like Google they might have been able to split the market up more. The one guy I know that used to have a PalmOS device has been bitter about them vanishing from the market. Ever since then he just roams from manufacturer to manufacturer, most recently Apple, never quite satisfied.

    I would buy a Windows 10 Mobile device myself, except... Verizon. No 950, no X3 Elite. I don't care about popularity. I might still pick up a 735 to take for a spin, they're super cheap.
  • JoeyJoJo123 - Wednesday, September 28, 2016 - link

    rest in piece boisonberry

    youll be sorely mist
  • serendip - Thursday, September 29, 2016 - link

    BlackBerry stops. That should have been the headline. I don't know what they could sell that anyone would want, especially if you weren't stuck on a legacy platform like BES.
  • Manch - Thursday, September 29, 2016 - link

    QNX is very popular. Ford dumped MS for them. Most automakers use QNX
  • kgardas - Thursday, September 29, 2016 - link

    Sign! Why am I so different than majority that I *like* physical qwerty keyboard? Fortunately purchased passport silver few months ago since otherwise I don't know what I would use... :-(
  • Murloc - Thursday, September 29, 2016 - link

    the physical keyboard was put to rest forever when stuff like swiftkey came out.
  • domboy - Thursday, September 29, 2016 - link

    I hear you. I'd like to have a slide-out smartphone. Physical keyboard was more enjoyable to type on than a screen.
  • lexluthermiester - Sunday, October 2, 2016 - link

    I feel you. I have a Priv and love it! I still have the Motorola Photon Q, Droid 4 and Galaxy S Relay.

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