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BlackBerry Quits? Smartphone Company To Stop Making Devices But Will Focus Solely On Software And Security

By Patrick Frye
Published on: 10:42 PST, Sep 28, 2016

BlackBerry has confirmed it will no longer make phones. While the company’s gradual decline was quite apparent, the strategic move, driven largely by rivals like Samsung, Apple and iOS, and Google’s Android, could signal the end of an era of smartphones with the iconic full QWERTY keypad and top-notch security features. However, the company isn’t hanging up its gloves. It will now focus on offering software solutions it was once revered for.

BlackBerry, once known to the tech world as Research In Motion or RIM, announced Wednesday it is shutting its phone business. The Canadian company will continue its enterprise-grade mobile communications services that are based one of the best known security platforms.

BlackBerry was undeniably one of the most iconic products of the digital age and internet era. However, the company confirmed it will no longer make smartphones, reported Android Authority. Instead of in-house development, the company will “outsource” that development to its partners, said CEO John Chen in an official statement.

“The company plans to end all internal hardware development and will outsource that function to partners. We are focusing on software development, including security and applications. This allows us to reduce capital requirements and enhance return on invested capital.”

Earlier this year, Chen had shared he would know by September if the loss-making handset business could make a turnaround and get its books back in black. However, it is apparent the company hasn’t managed to turn the business profitable and hence decided to do away with manufacturing altogether.

The announcement, however, brings to an end months of intense speculation about what BlackBerry would do with its smartphones business as it has clearly been left in the dust by its fast-growing rivals. While Apple and Samsung have sped ahead in the hardware segment, Google’s Android has matured steadily in the mobile Operating System (OS) department.

Within just a couple of years of Apple iPhone’s launch and Google introducing its homegrown Android OS, BlackBerry saw its market share erode away significantly. The company’s devices were once the phone of choice for any and all professionals who valued their businesses and careers. From office-goers to businessmen and from casual internet users to chatting addicts, people who shot emails and chat messages demanded the iconic physical keypad that only BlackBerry offered.

BlackBerry’s email services and BlackBerry Messaging Service, apart from BlackBerry Enterprise Services, were considered as industry leading standards for instant communication. While the company charged a pretty penny for these services, BlackBerry’s assurance of security was unparalleled. The services offered near-instant email delivery and managed to develop a loyal following of dedicated users who established communication lines by sharing their BBM Pins. At its peak, BlackBerry had 85 million subscribers across the world.

However, with the advent of Android, BlackBerry started bleeding customers and subscribers. While each new launch of a BlackBerry device was still eagerly anticipated by its fans, the sales continued to drop. Meanwhile, Google’s Android and Apple’s iOS managed to offer the same enterprise-grade security and reliability.

BlackBerry was recently at loggerheads with a few governments over their servers and was forced to take some unpleasant decisions. Perhaps the final nail in the coffin came in the form of internet-based instant messaging platforms like WhatsApp. Growing quickly, WhatsApp and other messaging platforms today offer end-to-end encryption for free.

According to Gartner, BlackBerry owns less than 1 percent of the phone market.

If BlackBerry isn’t making any smartphones anymore, what will it do? BlackBerry’s financial health has also deteriorated steadily. Fortunately, its software services business witnessed 89 percent revenue growth last year.

Hence the company announced will realign its path and focus primarily on communications and security software development. By shedding manufacturing, the company is freeing up a lot of capital and thereby hopes to increase margins.

Many experts in the industry aren’t surprised with BlackBerry’s decision of abandoning hardware side of smartphones. Insiders feel the company’s decision is quite wise and should help it remain buoyant during a very competitive time.

[Featured Image by Timur Emek/Getty Images]

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