BlackBerry Abandons Making Own Hardware As Revenues Decline

In line with expectations outlined by several analysts, BlackBerry’s CEO John Chen has decided to pull the plug on the company’s hardware business. The move was anticipated after Chen’s takeover, as he sought to turn the company around and into profit by expanding its portfolio of higher-margin mobile software and services to business and government clients (via the Wall Street Journal).


“We’ve decided to discontinue our handset hardware development and leverage third-party partners,” Mr. Chen said in a conference call. “We believe that this is the best way to drive profitability in the device business.”

BlackBerry will end all of its internal hardware development and outsource that work to various partners such as PT Telekomunikasi Indonesia Tbk, the largest mobile operator in Indonesia, which will license BlackBerry software and services, and manufacture Android-powered devices for the market it serves.

The Canadian (ex-)manufacturer will receive a fixed royalty for each new smartphone sold by its partner and, according to Chen, is in talks with other third parties to develop additional devices.

Chen said that he would decide in September on the fate of the iconic BlackBerry smartphone. Once a market leader, now BlackBerry’s global smartphone market share is below 1%, as it failed to launch a handset that was able to compete with Apple’s iPhone or Samsung’s handsets.

BlackBerry did launch new smartphones, but hardware sales continued to fall: In the first quarter of the current fiscal year, the company sold half a million handsets, down from 600,000 in the previous quarter, and 700,000 in the third fiscal quarter. In the latest quarter, sales dropped to 400,000, giving Chen the final impetus to end the hardware side of the business.

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  • Quattro

    pass me that nail

  • Riddlemethis

    Prudent move. No point in continuing to make hardware since others can make it cheaper for them. And fwiw, don’t expect Blackberry to go away any time in the near future.

  • Shameer Mulji

    I’m surprised they’re still around. At this point, they’re nothing more than a figment of John Chen’s imagination.

  • iFone

    What? They still operate?

  • Tim

    How things change. Apple now sells as many phones in the first hour of a product launch as Blackberry does in an entire quarter.

  • Jon Holden

    I can’t count how many times I’ve heard Blackberry users say “I just love the OS”…. I can’t count, because I’ve never ever heard this. Only reason I hear is familiarity and the physical keyboard. Sad to see a Canadian company going down the drain.

  • ECBomb

    I have a 6S Plus, BB Passport, and Lumia 640. iPhone hands down full app support, Passport hands down on productivity, and Lumia in it’s OS fluidity despite inferior specs compared to the other two phones. Each has their own pros and cons. Just sad that there’s fewer and fewer choice for consumers these days.

  • Decodering

    I can easily put myself in the place of people who use and love BB. I remember how I felt as an Apple Computer (its name at the time) fan back in the 90s when the company looked like it was on life support — because it was. The people who work for the company (or used to), and those who really believe in it, must also be pretty sad.

    I do still see people using BB, although very rarely. And I always suspect it’s because they were issued it through work.

    As far as using platforms other than iOS goes, I’ve always been curious about Windows smartphones. The interface actually looks really interesting to me. Two things have stopped me from trying it out: 1) I’m too embedded in Apple’s ecosystem (although that sometimes frustrates me); and 2) the lack of apps on Windows phones and a general lack of interest on the part of developers for the platform is a show-stopper.

  • Quattro

    Consider the choices 10 years ago where every cellphone manufacturer had pathetic little games, simple cameras, and where texting was beyond ridiculous. The choices in OS’s may be reduced by half now, but the quality (generally) and functionality keeps increasing.

    There may be only 2 dominant OS’s now, but the variety in the Android hardware market just keeps growing and growing. I’m not an Android user, but speaking strictly on choices… with the every-increasing variety of phone configurations and functionality, it’s pretty clear that the choices keep growing.

    I’ve never been a believer in variety in terms of operating systems as that always leads to compatibility issues. It’s only a necessary evil in order to foster competition and innovation.

    Just remember, WE are the ones that reduced the industry to just two dominant OS’s (well… ok… BB management did play a significant part in their own downfall).

  • Quattro

    I agree about Windows smartphones. IMO, they have always been the best phones out there in terms of OS and quality. The devices also led the way in cameras for quite a while.

    But, in their current form, they are pretty much as dead as BB. Lack of apps being pretty much the only reason. I’m not sure why Microsoft is still hanging on to that market.

    But, I’ve heard murmurings that they are planning something significant in the mobile market. Whether it’s a new device (like the rumoured “Surface” phone), or something completely different. Time will tell (likely next year, if ever).

  • Well I never liked the BlackBerry design or it’s paucity of features. Fixing BB phones for those who bought into the hype was very profitable and perhaps the reason for the no love lost feeling. I guess it’s a smart move for the company going forward since they couldn’t readapt the OS to serve multiple rich features for users.

    If you have not bought the book “Mobile Phones and Tablets Repairs : A Complete Guide for Beginners and Professionals “, and you want to make money fixing smartphones, get it now.
    Check Amazon marketplaces, Barnes and Noble, eBay etc