Thursday, 29 September 2016

BlackBerry Announced To stop Producing Phone


BlackBerry announced Wednesday it would halt in-house production of smartphones, marking the end of an era for the once-dominant Canadian tech firm.
Ontario-based BlackBerry said it had reached a deal to outsource production of its phones to an Indonesian partner, and
would instead concentrate on software and
services.
Handsets with the BlackBerry name will be
produced under license by PT Tiphone Mobile Indonesia Tbk, a statement by the
firms said.
BlackBerry, which a decade ago was among
the world’s largest smartphone makers, has seen its global market share slip to less than one percent as Apple and Android devices have dominated.
As the market shifted, BlackBerry has sought to refocus on software, including
security applications, and the latest
announcement takes the company out of
the handset market entirely.
“We are reaching an inflection point with
our strategy. Our financial foundation is
strong, and our pivot to software is taking
hold,” said chief executive John Chen,
pointing to a doubling of software revenue
in the last fiscal year.
“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.”
The Waterloo, Ontario-based company has
made several efforts in recent years to find
new customer niches as its smartphone
handset sales continued to stagnate in the
face of competition.
It had hoped its first Android-operating
smartphone launched last year would help
restore the company to its former glory. But sales were lackluster.
Earlier this year, BlackBerry announced it
was killing off its Classic smartphone with
a physical keyboard — once the workhorse
of the smartphone market — as part of a
modernization of its lineup.
But the company has continued to bleed
red, posting on Wednesday a US$372
million loss in its second quarter ending
August 31.
Revenues also fell to US$334 million, from
US$490 million during the same period last
year. The company did not report details on its smartphone shipments.

– Rebooting BlackBerry –
Some analysts praised the decision to get out of smartphone sales, at a time when the worldwide smartphone market has turned relatively flat.
“The devices business has been a distraction for both BlackBerry and
investors for a number of years now,”
International Data Corporation analyst John Jackson told AFP.
The end is “good news,” he said, noting an uptick in BlackBerry’s stock price in morning trading.
Shares rose more than four percent to US
$8.22 in New York at 11:00 am local time
(1500 GMT). This price, however, remains
far below a five-year high set in October
2011 of US$23.97.
Originally known as Research in Motion,
the company introduced its first internet-
connected devices in the early 2000s, and
earned a dedicated following of “CrackBerry” addicts.
But its luster faded with the introduction of
the iPhone in 2007 and the large number of low-costs Android handsets that followed.
By moving out of hardware, BlackBerry can focus on its various business services such as messaging, cybersecurity and tracking connected devices.
Jackson said the move “should help
investors, BlackBerry customers, and the
company itself focus squarely on the
software and services business which is
fiercely competitive in its own right, but
also the business that BlackBerry has been
in all along.”

However analyst Michael Walkley at
Canaccord Genuity said the new strategy
has risks as well.
“We believe the lowered focus on hardware could have an adverse impact on its installed base of loyal BlackBerry hardware customers, potentially switching to new software and security solutions on competing smartphones over time,” he said
in a research note.

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