BlackBerry has announced it will shut its hardware division after recent efforts to revive its phone business have largely failed.
CEO of the Canadian firm, John Chen, said in a statement: “The company plans to end all internal hardware development and will outsource that function to partners.”
The news follows the company’s second-quarter results, posted on Wednesday, which revealed a loss of $372 million following a profit of $51 million a year ago. Revenue also fell by a third to $334 million.
BlackBerry’s hardware division closure was predicted earlier this month by a Canadian investment website.
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The site’s report noted that the division itself makes up more than 65% of BlackBerry’s research and development expenses but the company’s smartphones make up less than 1% of the global market.
With the hardware production becoming outsourced, the troubled smartphone maker will be free to focus on software development and services.
This year’s BlackBerry DTEK50 was built by Alcatel
Despite embracing Android last year as part of an attempt to revive its status as one of the top smartphone makers, the company’s efforts have largely failed to turn its fortunes around.
This year BlackBerry released the DTEK50 handset, which was built by Alcatel and runs Android 6.0 Marshmallow.
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The phone hinted at what was in-store for BlackBerry in the future, as it was based on Alcatel’s Idol 4 phone, and was not manufactured by BlackBerry itself.
In the future, CNET reports, BlackBerry will have even less to do with smartphone manufacturing, however, simply collecting a royalty fee on any phone sold by its partners.
The first and only partner to be announced at this point is the Indonesia-based BB Merah Putih, and it remains unclear whether future BlackBerry handsets will make it to market in the UK or US.
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Let us know your thoughts on BlackBerry’s hardware division closure in the comments.
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Editorial independence means being able to give an unbiased verdict about a product or company, with the avoidance of conflicts of interest. To ensure this is possible, every member of the editorial staff follows a clear code of conduct.
Professional conduct
We also expect our journalists to follow clear ethical standards in their work. Our staff members must strive for honesty and accuracy in everything they do. We follow the IPSO Editors’ code of practice to underpin these standards.
