Yahoo Finance BlackBerry Ltd Quitting Smartphone Production (BBRY)
BlackBerry Ltd (BBRY) said Thursday it would end its internal hardware development (i.e. phone production) and outsource this work to partners -- a statement that will likely make Kim Kardashian quake in her boots.
Investors reacted enthusiastically, as BlackBerry stock was up more than 5 percent Wednesday morning.
John Chen, the company's executive chairman and CEO, said in a statement that the company's Mobility Solutions was offering promise, specifically mentioning its telecom joint venture software licensing agreement in Indonesia.
"Under this strategy, we are focusing on software development, including security and applications," Chen said in the statement. "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."
This doesn't spell the end for BlackBerry devices, nor does it come as shock given the company's tepid mobile market role, notes The Verge. BlackBerry's last self-manufactured phone was last November's the Priv, its inaugural Android product.
About a year ago Chen suggested an ultimatum for the company to sell 5 million units per year and become profitable, otherwise transition to a software-only company. He reiterated to CNBC in April, "If by September, I couldn't find a way to get there, then I need to seriously consider being a software company only." In its first quarter, device sales only hit 500,000 units.
The company discontinued its Classic smartphone back in July, when Chen said he still wanted to compete in hardware.
So, where does BlackBerry go from here? In addition to the telecom joint venture, the company also announced it started shipping BlackBerry Radar, what it calls "an end-to-end asset tracking IOT system." The Verge also points out its BlackBerry Hub+ launch, a software licensing program to work with Android.
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