After 14 long years in the smartphone manufacturing business, Blackberry takes a bow. As much as the Blackberry hardware shut down is a shock, it has its perks business-wise.
In an official announcement by the company’s CEO, it was noted that the company will now be concentrating on software productions, which will be outsourced.
Reports have shown that with the current inclinations to Androids and touch screen features, Blackberry has not been making profits with the hardware sales in a long time.
“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.”- John Chen, Blackberry CEO.
Before now Blackberry phones were one of the top competitors in the smartphone manufacturing business alongside Samsung and Apple.
It was used and recommended by professionals in the business world.
It appears the company can no longer keep up with the competition. CEO Chen sadly confirms that less than 100 jobs would be lost from the company’s decision to quit making smartphone hardware.
He went on to also note that the revenue of the company will be affected.
According to report, Blackberry revenue fell from $490 million in last year’s fiscal second quarter to $334 million in this year’s fiscal second quarter.
The CEO has suggested that while the hardware sales have fallen, the software and services have grown.
While the revenue from software and services was $166 million and $156 million in its first and second quarter respectively. The Blackberry hardware business accounted for $105 million in revenue.
Perhaps the wide margins in the revenues was enough reason for the Blackberry hardware shut down.
Concurring to the choice of software production, IDC Technology Analyst, John Jackson said “This is an entirely sensible decision and probably an overdue one… Software revenue and the margin profile associated with that is where the focus should have been, and now can be.”