Black­Berry stops mak­ing phones

China Daily (USA) - - BUSINESS - By BLOOMBERG

It’s of­fi­cial. Black­Berry Ltd, the Cana­dian com­pany that in­vented the smart­phone and ad­dicted le­gions of road war­riors to the “Crack­Berry”, has stopped mak­ing its iconic hand­sets.

Fi­nally con­ced­ing de­feat in a bat­tle lost long ago to Ap­ple Inc and Sam­sung Elec­tron­ics Co, Black­Berry is hand­ing over pro­duc­tion of the phones to over­seas part­ners and turn­ing its full attention to the more profitable and growing soft­ware busi­ness.

It’s the for­mal­iza­tion of a move in the mak­ing since Chief Ex­ec­u­tive Of­fi­cer John Chen took over nearly three years ago and out­sourced some man­u­fac­tur­ing to Fox­conn Tech­nol­ogy Group.

Get­ting the money-los­ing smart­phone busi­ness off Black­Berry’s books will also make it eas­ier for the com­pany to con­sis­tently hit prof­itabil­ity.

“This is the com­ple­tion of their exit,” said Colin Gil­lis, an an­a­lyst at BGC Part­ners. “Chen is a soft­ware CEO his­tor­i­cally. He’s get­ting back to what he knows best: higher mar­gins and re­cur­ring rev­enue.”

Chen should be able to ex­e­cute his soft­ware strat­egy as long as he keeps costs in line and main­tains cash on the bal­ance sheet, Gil­lis said.

Black­Berry said it struck a John Chen, li­cens­ing agree­ment with an In­done­sian com­pany to make and dis­trib­ute branded de­vices. More deals are in the works with Chi­nese and In­dian man­u­fac­tur­ers. It will still de­sign smart­phone ap­pli­ca­tions and an ex­tra-se­cure ver­sion of Al­pha­bet Inc’s An­droid op­er­at­ing sys­tem.

“I think the mar­ket has spo­ken and I’m just lis­ten­ing,” Chen said in a dis­cus­sion with jour­nal­ists. “You have to evolve to what your strength is and our strength is ac­tu­ally in the soft­ware and en­ter­prise and se­cu­rity.”

The new strat­egy will im­prove mar­gins and could ac­tu­ally in­crease the num­ber of Black­Berry-branded phones sold, Chen said, as man­u­fac­tur­ers li­cense the name that still holds con­sid­er­able sway in emerg­ing mar­kets like In­done­sia, South Africa and Nige­ria.

Our strength is ac­tu­ally in the soft­ware and en­ter­prise and se­cu­rity.” Ltd CEO of Black­Berry

AFP

Vis­i­tors try out a Black­berry smart­phone at an expo in Ban­ga­lore, In­dia.

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