BlackBerry Quits Making Hardware

Like an aging champion throwing in the towel after years of steady decline on the playing field, BlackBerry said yesterday that it would no longer manufacture its own devices, touching off a flurry of remembrances of a time when BlackBerry was at the top of the game.

“We haven’t been our own manufacturer of devices for some time now,” Scott Wenger, BlackBerry’s VP of design and device marketing, tellsUSA Today’s Edward C. Baig. But he “made it clear that BlackBerry still plans to sell BlackBerry-branded phones, though he revealed no specifics on the product roadmap.”

“It’s been years since the Waterloo, Ont.-based former tech titan has released anything that resonated, despite a last-ditch embrace of Android,” writes Brian Barrett for Wired. “In fact, you’d be forgiven for not realizing they were still in the device business at all.”  



In tracing the highs and lows of BlackBerry Ltd. (once known as Research in Motion or RIM) devices, Barrett tells us its breakout product was the Quark in 2003. It was the first line to incorporate voice, email, Web and messaging in one handset, he says.

But before that, the company “made what it then called ‘pagers’ starting in 1996,” writes Josh McConnell for Financial Post. “The devices were limited in nature, providing essentials such as a contact book, calendar and e-mail. Two major selling points were the two-way messaging and an early version of the famous scroll wheel.”

McConnell, as does Barrett and others, scrolls through a gallery of innovations and frustrations over the next two decades. 

“When the BlackBerry 850 was released in 1999, the cool factor of cell phones began to rise,” writes Nicole Gallucci for Mashable. “Throughout the early 2000s, before the rise of advanced touchscreen technology, everyone who was anyone was busy scrolling on their trackballs and BBM-ing their besties.” 

And, she reports, it stayed sizzling for a bit even after the first iPhones appeared in 2007. “Perhaps PEAK BlackBerry coolness occurred when BBM champ and cool girl Paris Hilton attended the the launch party for the new BlackBerry Pearl 8130 back in 2008 to show her love. That's hot,” Gallucci writes under a photo of a radiant Hilton cum device awkwardly facing what, way back then, was probably an actual DSLR camera.  

The company will focus on developing software, a direction it arguably has been heading in since it pulled out of the consumer device market in 2013.

“The strategy shift, more than a year in the making, will end all of BlackBerry’s internal hardware development and outsource it instead to various partners,” report David George-Cosh and Jacquie McNish for the Wall Street Journal.

Software sales, according to CEO John Chen, “will continue to be driven by mobile-management tools aimed at businesses and government, such as BES12, which allows companies to manage devices from various providers that are used by employees on corporate networks,” they write.

“Analysts had been holding their breath for the news after Chen said September was his deadline for making the chronically money-losing device business profitable. BlackBerry’s device business, which it calls ‘Mobility Solutions,’ will focus on developing applications and an extra-secure version of Google’s Android operating system that it can license to other companies,” reports Bloomberg’s Gerrit De Vynck.

“Software and services revenue in BlackBerry’s latest quarter, released alongside news of its strategy shift, more than doubled from a year earlier, to $156 million. Still, that was down from $166 million the previous quarter,” George-Cosh and McNish point out, but it expects revenue growth of 30% this fiscal year.

“In a model for how it plans to keep BlackBerry-branded handsets in the market, the company said it had signed a deal with Indonesia's BB Merah Putih to manufacture, distribute and promote new devices in that country, its largest handset market,” writes Reuters’ Alastair Sharp.

“‘What we did was cut off the entire chain, and I'll take a royalty,’ Chen told reporters, noting it could now avoid inventory and supply chain costs. ‘I'm still in the handset business, but I'm in it in a profitable way.’”

IDC technology analyst John Jackson tells Sharp it’s “an entirely sensible decision and probably an overdue one. Software revenue and the margin profile associated with that is where the focus should have been, and now can be.”

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