BlackBerry is getting out of the hardware business.
As part of its quarterly earnings report today, the company announced that it would soon end all hardware development. Instead, BlackBerry smartphone production and design will be outsourced to third parties. BlackBerry will take a royalty on sales.
"We are focusing on software development, including security and applications. The company plans to end all internal hardware development and will outsource that function to partners," BlackBerry CEO John Chen said. The first such manufacturer is Indonesia's BB Merah Putih; Indonesia is BlackBerry's largest phone market today.
The end of BlackBerry's hardware division has been a long time coming. Nearly a year ago, Chen said BlackBerry would get out of the phone business if it couldn't gain any traction with its handsets.
End of the BlackBerry: Nine years in the making
BlackBerry was never able to compete after Apple rolled out the original iPhone in 2007; the company never truly appreciated the threat that iPhone-era smartphones posed.
By the time BlackBerry did confront the threat of the iPhone (and Android smartphones) around 2012 it was already too late. Since then, BlackBerry has tested the waters with several Android smartphones packed with BlackBerry security and messaging features -- the most recent of which was the Dtek50.
But even becoming a me-too Android manufacturer wasn't enough to win over smartphone shoppers in retail stores and corporate purchasing departments. Now all hardware development will be left to partners. In fact, BlackBerry is already doing that. The Dtek50, for example, was designed and produced by Alcatel and looks to be little more than a rebranded version of the Alcatel Idol 4.
A retreat similar to Microsoft's for Windows 10 Mobile
Hearing about BlackBerry's new approach to hardware, one can't help but draw a parallel to Microsoft's strategy for Windows 10 Mobile. Microsoft, too, is leaving hardware development up to third-party manufacturers while it focuses on developing the software.
It's not clear if BlackBerry will be as hands-off as Microsoft presumably is at this point. BlackBerry could still have a hand in the development of smartphones that bear its brand, or expect a line of phones to roll out on a certain schedule.
This story, "End of the road: BlackBerry stops making smartphones" was originally published by PCWorld.