BlackBerry has announced that it no longer has any plans to continue manufacturing its own smartphone devices. The Canadian phone maker made its announcement after disclosing that during the third quarter of this year, it had posted a net quarterly loss amounting to $372 million. BlackBerry will still be active in the smartphone business and is looking to put all of its attention on developing software projects as well as licensing, but when it comes to building its own hardware, those days may be over for the company.
As explained by John Chen, the chief executive officer of BlackBerry, through a press release, the company has shown some growth in software development projects brought on by its Mobility Solutions initiative, including inking a major device software licensing deal with a telecommunications joint venture in Indonesia. It will now focus on developing software products that can be used in specific areas such as security and mobile apps. As for any future hardware related endeavors, BlackBerry has stated that it will be outsourcing those hardware projects to third party manufacturing partners.
There has been some speculation about BlackBerry finally throwing in the towel in terms of hardware production, but now that the company has finally decided on doing it, it should put itself in a nice position to begin minimizing its capital spending and hopefully, enjoy some improved returns on invested capital. For the quarter that ended in August, BlackBerry managed to register revenues of $334 million, a decrease compared to the $490 million it posted during the same quarter in the previous year. And according to a report published by Reuters, the $334 million revenue also failed to meet the $393.75 million projection made by industry watchers. But it did break even (when not taking into account the $147 million in charges due to restructuring efforts), and improved its full year revenue outlook.
BlackBerry fans may be saddened to know that the phone maker is now moving on from building smartphone devices. The company used to be a dominant player in mobile, but it has seen its popularity diminish significantly in the last decade or so with the emergence of Apple and Samsung whose iPhones and Galaxy devices, and mobile operating systems (iOS and Android), are now the preferred choices among today’s smartphone users.
Still, it may have been a wise decision by BlackBerry to enter into the patent licensing business recently. A few months ago, the company debuted a software licensing program for its mobility solutions business, providing a suite of Android apps for productivity and communications purposes. It also filed a patent lawsuit against telephony giant Avaya, charging that Avaya had violated no less than eight US patents, and in August this year, BlackBerry also filed a lawsuit against Blu Products, claiming that Blue had infringed on more than a dozen BlackBerry owned patents.
