BlackBerry, pioneer makers of the iconic BlackBerry handsets, will stop in-house manufacturing of its hardware and will focus on software development instead. This announcement came on Wednesday. In a conference call, CEO John Chen said: "We've decided to discontinue our handset hardware development and leverage third-party partners. We believe that this is the best way to drive profitability in the device business."
The Canadian based company revealed that handset manufacturing will be consigned to an Indonesian company, PT Telekomunikasi, which is the biggest mobile company in the country. In exchange for the license to create BlackBerry-branded handsets, BlackBerry will get royalties for each handset sold.
The move doesn't come as a surprise, as BlackBerry has long staggered behind the success of rivals Apple Inc., and Samsung Electronics with the rise of the touch screen technology. Rumors of the outsourcing plans have circulated earlier this month, stating that the announcement is likely to be made when the company makes its financial report for the second quarter. Chen has also made an earlier statement that the company needed to make 3 million in revenue if the handset arm of the business was to be profitable.
BlackBerry is now saying that it will focus on mobile software products for businesses and government entities. The company has since expanded its portfolio to create security and crisis management software. In its second quarter report, the company announced new software including a tracking system called BlackBerry Radar and BlackBerry Hub+, a productivity app for Android.
BlackBerry handsets gained popularity with the young professionals, celebrities and even country leaders, with its QWERTY keyboard and advanced email messaging system. It has, unfortunately, failed to catch up with the creation of modern touch-screen phones. The last handset released by the company was the Priv, which ironically runs on Android. The Priv was an attempt to win back BlackBerry fans, but poor sales indicated otherwise.
