End of an era as Blackberry stops making phones
After 14 years in the mobile phone business, embattled maker Blackberry has announced that it is no longer going to design its own smartphones.
The company, which is famed for its “Qwerty” keyboard mobile phones that were the choice handset for professionals, has been struggling to keep up with market leaders Apple and Samsung as the world has moved to touchscreens.
As a result, the loss-making business said it is going to focus on creating software for mobile phones, rather than the devices themselves. Instead, it will outsource the brand to other manufacturers.
The new strategy will enable Blackberry to “focus all of our efforts on where we can deliver differentiation in software and security” which is “aligned with where the market is going,” CEO John Chen said as the company released Q2 earnings.
Sales fell short of Wall Street forecasts, but Blackberry shares rose 5.7% after the company raised its loss forecast for the fiscal year to at most five cents a share vs analyst expectations for 15 cents.
Some of the improvement is due to what Chen projects as “reasonable savings” from the move to license phone manufacturing to an Indonesian joint venture.
Blackberry was expected to ship 2.4 million phones this year, putting it far behind industry leaders Samsung (324.2 million), Apple (202.5 million), and LG (58.6 million), Macquarie Research projected in June.
In July, Blackberry said it would stop production of BlackBerry Classic, the last of the smartphones with a physical keyboard it has made since 2003.
Chen also disclosed that CFO James Yersh, who has been at the company since 2008, is leaving “for personal reasons.”
Blackberry’s stock is down 10.2% in 2016, and more than 60% for the last five years.