BlackBerry to outsource smartphones, signs deal with Indonesian firm
TORONTO: BlackBerry Ltd will outsource the development and design of its smartphones, a product category it helped pioneer and popularise, as the Canadian company bets on software and managing rival devices, it said yesterday.
Shares of BlackBerry rose about 6% in early trading, even as it reported a sharper-than-expected drop in quarterly revenue.
While some outsourcing of manufacturing had already occurred, the company will complete a full transition out of the hardware business by the end of the year, CEO John Chen said on a call with analysts.
It will instead take a royalty on devices sold by partners.
The company signed a deal with Indonesia’s BB Merah Putih to manufacture, distribute and promote its branded devices in that country, its largest market for handsets. BlackBerry said it was also in late-stage discussions for a similar deal in China and working on several India initiatives.
The company reported a net loss of US$372 million, or 71 cents a share, for the second quarter ended on Aug 31, compared with a year-earlier profit of US$51 million, or 24 cents a share. Revenue fell to US$334 million from US$490 million.
Excluding US$147 million in charges from its reorganisation and other one-time costs, the company said it broke even.
BlackBerry said its CFO James Yersh would leave effective on Oct 1 for personal reasons, with former Sybase executive Steven Capelli replacing him. – Reuters