Black­Berry to out­source smart­phones, signs deal with In­done­sian firm

The Sun (Malaysia) - - SUNBIZ -

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

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