BlackBerry‘s Smartphone Division Shutdown: New Focus on Software Development

The company has announced that BlackBerry is going to stop designing and manufacturing own smartphones after 14 years.

In May, John Chen – the CEO of BlackBerry, said that they would know by September whether the hardware business turned into profitable for them.

Now, the company finally decided to choose an outsource move to reduce the risks of competitive markets and focus on the software business. The shares of the company rose 5%  and closed at $8.31 as investors welcomed the strategy adopted by the company. The company once valued at $83 million, now having worth about $4.1 billion. Less than 100 jobs lost from latest strategy.

According to the company, it sold about 400,00 smartphones during the second quarter. Revenue chopped to $334 million in the second quarter, from $490 million in the same period. Revenue from software and services was $156 million in the second quarter that fell down from $166 million in the first quarter.

The company has changed the direction in October 2015 by producing first smartphone that was running with the Android operating system rather than its own BB10 software.

Gillis said, “The outsource decision is just the final pin in the hardware business and the company is looking forward its future in software.”

BlackBerry’s new focus on software development may give a chance to improve its margins and stability in the competitive market.

BlackBerry Prive was the last device that designed in-house. It is first Android powered smartphone. The company launched it after 7 years of the first Android device.

The company has made several efforts to refresh its hardware business, including launch of DTEK50 (Android Powered). The company claimed that it was most secure smartphone in the world. This phone is manufactured by Alcatel owner TCL.