It's time to shed a tear for another iconic phone brand. Blackberry will stop designing and selling their own phones.
The company announced Wednesday that it will stop manufacturing its own hardware and will outsource its phone business to third-party partners. With this new strategy, the company will shift its focus to software development instead.
Blackberry used to dominate the smartphone scene, peaking at 50 percent U.S. market share in 2009 and boasting more than 80 million global subscribers in 2012.
However, increased competition from Apple's iPhone and Google's Android phones caused the company to stall and Blackberry phones were quickly snubbed by consumers and enterprise users alike.
In hopes of resuscitating their ailing phone business, the company even tried joining the Android bandwagon by ditching their own Blackberry 10 software and releasing the Android-powered Blackberry Priv last year and the DTEK50 this year.
Unfortunately for the company, this experiment failed to ignite any hopes of a resurgence as the Priv and DTEK50 flopped, missing sales targets by a wide margin. In contrast, at the same time, iPhone and Android handsets surged to grab 80 percent of the global smartphone market share.
In a statement, Blackberry revealed that they have entered into a licensing agreement with BB Merah Putih, an Indonesian joint telecom venture.
BB Merah Putih will manufacture, distribute and promote Blackberry-branded devices running Android software and apps. This move will shift the company's focus from hardware production to software exclusively.
As Blackberry CEO John Chen states,
"Our new Mobility Solutions strategy is showing signs of momentum, including our first major device software licensing agreement with a telecom joint venture in Indonesia. Under this strategy, 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. This allows us to reduce capital requirements and enhance return on invested capital."
Based on this announcement, the Blackberry brand on smartphones will most likely linger, but the devices will be Blackberry-in-name-only.
The company also posted their 2016 third quarter earnings, revealing a net loss of $372 million against a revenue of $334 million. With the growth in its software sales, Blackberry expects its full fiscal year earnings to hover between breaking even and a 5-cent per share loss.
Blackberry's decline is similar to another iconic phone brand's demise. As we reported last week, Microsoft is releasing what could be their last Nokia branded phone, the 216.
In 2014, Microsoft bought the ailing Nokia's feature phone and the Lumia smartphone business and gave the tech company access to Nokia's patents, plants and feature phone and Lumia branding for 10 years. With Microsoft exiting the phone hardware business themselves, the future of the Nokia brand is also uncertain.
Now, with Blackberry exiting the phone hardware business, the tech landscape has changed yet again.