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Friday, September 30, 2016

Blackberry Stops Designing Its Own Phones

Blackberry is to stop designing smartphones in-house after 14 years, the company has announced.

Once a market leader, the company has struggled to keep pace with modern handsets produced by rivals such as Apple and Samsung. In May, the company's chief executive, John Chen, said he would know by September whether the hardware business was likely to become profitable. Now, Blackberry says it will outsource hardware development to partners. The company has not yet confirmed when any further Blackberry phones will be released, but Mr Chen said on Wednesday that further devices including one with the "iconic" physical keyboard would go on sale.

"I always wanted to make sure that we keep having the iconic devices," Mr Chen told BNN.
"I just need to find a way to be efficient and be able to make money. I think we found the model." The company said it sold about 400,000 smartphones in its second quarter - fewer than the previous three months."Blackberry can't keep producing its own phones indefinitely just to serve a small subset of its clients addicted to its home-grown devices," said Ben Wood of the CCS Insight consultancy.

"Blackberry had made no secret of the fact that it might shut down its own phone-making business. Pushing it out to a third party is a sensible solution - but any manufacturer making Blackberry branded devices will ultimately face the same challenges." Mr Chen has been candid about the future of Blackberry's handset business, saying he would consider closing the division if it could not become profitable.

In May, he told Bloomberg that he would know by September whether that was likely. "The first time I made that statement was September a year ago," said Mr Chen. "When people ask me, 'How long will it take?'... I said a year. So, it's going to be September this year."

In October 2015, Blackberry changed the direction of its handset business by producing its first smartphone running Google's Android operating system, rather than its own BB10 software. However, Mr Chen has admitted the device, which featured a slide-out physical keyboard, was too expensive to appeal to a mass market. The company has since launched a less expensive touchscreen-only Android handset, based on a phone released by Alcatel owner TCL.

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