Black­Berry won’t make BBs any­more

Jamaica Gleaner - - SOMETHING EXTRA - WRIT­TEN AND COM­PILED BY Ka­reem LaTouche

IT’S THE end of an era for smart­phone maker Black­Berry.

The com­pany con­firmed last Wed­nes­day it will no longer man­u­fac­ture its own de­vices, in­stead out­sourc­ing it to part­ners. Black­Berry CEO John Chen says the com­pany will pri­ori­tise soft­ware devel­op­ment, in­clud­ing apps and se­cu­rity.

The rev­e­la­tion was made in a re­lease de­tail­ing sec­ond-quar­ter earn­ings, which showed rev­enue of $352 mil­lion, miss­ing Wall Street fore­casts com­piled by S&P Global Mar­ket In­tel­li­gence. Non-GAAP earn­ings per share were even for the quar­ter, beat­ing an­a­lyst es­ti­mates of a loss of five cents a share.

“We are reach­ing an in­flec­tion point with our strat­egy,” said Chen in a state­ment. “Our fi­nan­cial foun­da­tion is strong, and our pivot to soft­ware is tak­ing hold.”

Shares of Black­Berry were up more than three per cent in pre­mar­ket trad­ing.

At one point, Black­Berry owned the smart­phone mar­ket with its sig­na­ture de­vices fea­tur­ing a QWERTY key­board and so­phis­ti­cated soft­ware. With the rise of the iPhone as well as Google’s An­droid plat­form, Black­Berry soon fell out of favour with en­ter­prise and con­sumers.

Black­Berry at­tempted a come­back in 2013 with the launch of a touch­screen-only smart­phone as well as its Black­Berry 10 op­er­at­ing soft­ware. How­ever, poor sales pushed the com­pany to con­sider a po­ten­tial sale later that year. Black­Berry even­tu­ally dropped the sales bid and re­placed CEO Thorsten Heins with Chen. Black­Berry has since made mul­ti­ple ef­forts to re­vive its smart­phone busi­ness, in­clud­ing the Au­gust launch of the An­droid-pow­ered DTEK50, which the com­pany claimed was the most se­cure smart­phone in the world. Black­Berry’s fall from dom­i­nance prompted many of its cus­tomers in the en­ter­prise mar­ket – once a strong­hold for the com­pany – to switch to iPhones and An­droid de­vices. Last sum­mer, the US Se­nate fi­nally dropped Black­Berry. The shift to soft­ware has been part of Chen’s strat­egy since he took over the CEO role nearly three years ago. The move to soft­ware gives Black­Berry the chance to im­prove their mar­gins and gen­er­ate re­cur­ring rev­enue, says BGC Part­ners an­a­lyst Colin Gil­lis. “The de­ci­sion to out­source the last bit of smart­phone man­u­fac­tur­ing is just the fi­nal nail in their hard­ware busi­ness,” says Gil­lis. “It’s long been a busi­ness in de­cline, and their fu­ture is in soft­ware.”

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