BlackBerry stops making smartphones, focus on software

After failing to revive its smartphone business despite several efforts, BlackBerry on Wednesday announced it will cease internal hardware development and will focus on software and services.

“The company plans to end all internal hardware development and will outsource that function to partners,” Executive Chairman and CEO John Chen said in a statement.

As it moves away from the hardware business, BlackBerry will now focus on its enterprise software suite and mobile security.

The company announced second quarter results on Wednesday that saw it move to a loss of $372 million from a year-ago profit of $51 million. Revenue fell by a third to $334 million.

Total cash, cash equivalents, short-term and long-term investments was approximately $2.5 billion as of August 31.

“We are reaching an inflection point with our strategy. Our financial foundation is strong, and our pivot to software is taking hold,” Chen added.

“In Q2, we more than doubled our software revenue year over year and delivered the highest gross margin in the company’s history. We also completed initial shipments of BlackBerry Radar, an end-to end asset tracking system, and signed a strategic licensing agreement to drive global growth in our BBM consumer business,” Chen pointed out.

He said that BlackBerry’s new Mobility Solutions strategy is showing signs of momentum, including its first major device software licensing agreement with a telecom joint venture in Indonesia.

“Under this strategy, we are focusing on software development, including security and applications. The company plans to end all internal hardware development and will outsource that function to partners. This allows us to reduce capital requirements and enhance return on invested capital,” continued Chen.

Chen previously said if he wasn’t able to make the smartphone division profitable, it would be shut down.

BlackBerry switched to Android-powered devices earlier this year.

In July, the Canadian smartphone maker announced its second Android-based smartphone DTEK50 that combines BlackBerry’s security, privacy and productivity with the Android 6.0 Marshmallow experience. IANS