Nine years after Apple revolutionized the smartphone business, the company that invented the smartphone is throwing in the towel. BlackBerry will no longer manufacture phones that carry the BlackBerry name, and will focus its business on the software that has kept many enterprise customers onboard.
“Ultimately, the future of the smartphone industry is about ‘the smart’ in the phone, and less about the form factor,” said BlackBerry COO Ralph Pini in a blog post. “This plays perfectly to our robust software portfolio and positions us well for the future.”
BlackBerry makes security and messaging software for mobile devices, and for more than two years has been led by software industry veteran John Chen, who has repeatedly said that BlackBerry has a future in hardware as well as software. Now the hardware part of that future is taking a new direction: BlackBerry will license its name and its technology to third-party manufacturers.
The company’s first licensee is called BB Merah Putih. The newly formed joint venture will source, distribute and market BlackBerry smartphones in Indonesia, which BlackBerry calls its “strongest market.”
BlackBerry did not say whether its licensees will sell phones that run Android or BlackBerry’s proprietary operating system. Within the last year, the Canadian company has released two Android phones: the Priv and the DTEK 50. The DTEK 50 is thought to have been manufactured by Alcatel, not BlackBerry.
Less than a third of BlackBerry’s revenue now comes from hardware. For the quarter ending Aug. 1, the company sold about $100 million worth of “mobility solutions,” which includes smartphones. Overall revenue was $352 million (non-generally accepted accounting principles), with 44% coming from software and services, and 26% coming from service access fees. The company still is not profitable.
BlackBerry has had less than 1% of the smartphone market for several straight quarters, and now even its more successful rivals face a slowing market. According to CCS Insights, smartphone shipments will peak in North America and Europe next year, and then start to decline.
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