BlackBerry exits hardware business

BlackBerry has announced it will no longer design its own smartphones in house, concentrating on software while outsourcing hardware development to partners.

After 14 years as a smartphone manufacture, BlackBerry has implicitly raised the white flag against rivals including Apple and Samsung.

The company aims to drive efficiency by concentrating on its enterprise software. The decision follows a year-long review of the potential profitability of the company’s hardware business by CEO John Chen.

BlackBerry sold just 400,000 smartphones in the second quarter. The vendor’s plan to turn around its hardware operations involved designing an Android phone with the distinctive BlackBerry physical keyboard, but this plan failed due to a high price tag limiting the device’s mass-market appeal.

BlackBerry has also announced its first deal under its new software licensing model, covering the Indonesian market, where BlackBerry smartphones are disproportionately popular.

The company has entered an agreement with newly-formed joint venture PT BB Merah Putih to license BlackBerry software and services for the production of BlackBerry-branded handsets for the Indonesian market.

The devices will use BlackBerry’s Android software and applications. The joint venture is being led by a subsidiary of Indonesia’s largest mobile operator PT Telkom.

“BlackBerry is no longer just about the smartphone, but the smart in the phone. Working with trusted partners to extend the reach and availability of our secure mobility software remains a key focus for the Mobility Solutions unit and this joint venture is just one of our next steps in making our software licensing strategy successful,” Chen said.

“BB Merah Putih is comprised of companies with extensive background in providing innovative mobile services to their customers, making the newly formed joint venture the perfect partner to offer trusted BlackBerry secure mobile software that is available exclusively to Indonesian customers.”