Blackberry ends smartphone production

9 years ago - Published in Finance, Fundamental Analysis

Blackberry, the canadian firm that invented the smartphone, stops making mobil phones, John Chen, Blackberry executive chairman and CEO, said Wedsneday.

The new strategy will enable Blackberry to “focus all of our efforts on where we can deliver differentiation in software and security” which is “aligned with where the market is going,” CEO John Chen said as the company released Q2 earnings. 

Blackberry reported sales of $334m, down 31% year-on-year, during its second quarter, alongside a net loss of $372m, compared to profit of $51m a year ago.

The company has already signed joint venture with an Indonesian manufacturer, BB Merah Putih, as Reuters ­referred, to handle the manufacture of its devices in that market. However, the news agency reported that BlackBerry was conducting negotiations to set up similar arrangements in China and India.

BlackBerry, which a decade ago was among the largest smartphone makers, has seen its global market share slip to less than 1% amid domination by Apple and Android devices.

The decision is not a complete surprise. Chen last april said to CNN that "If by September, I couldn't find a way to get there (to profitability), then I need to seriously consider being a software company only."

"It was inevitable at this point; they didn't have the unit volumes to sustain the business profitably," said Matthew Kanterman, an analyst with Bloomberg Intelligence. "This is doubling down on the efforts to focus on software, which is really what their strength is." 

Chen also disclosed that CFO James Yersh, who has been at the company since 2008, is leaving “for personal reasons.”