BlackBerry Calls It Quits On Designing, Building Its Own Phones To Focus On Software

If you liked recent, unique smartphone designs like the Passport and the Priv, you won’t be seeing anything like them in the future from BlackBerry. Buried in the company’s fiscal Q2 2017 earnings report is news that BlackBerry is exiting the hardware business and will instead “outsource that function to partners”.

This should come as a surprise to no one that has followed BlackBerry since John Chen took the helm. In early April, Chen boldly stated that he would sever BlackBerry’s hardware division if it wasn’t profitable by September. Given that BlackBerry has less than 1 percent of the global smartphone market according to recent estimates (with shipments quickly dwindling), it was a foregone conclusion that judgement day would arrive sooner rather than later.

DTEK50 1

According to Gartner, BlackBerry had just 0.1 percent of the global smartphone market during Q2 2016, and shipped just over 400,000 smartphones.

BlackBerry was already well on its way to shuttering its hardware division, as the recently released DTEK50 was nothing more than a clone of the Alcatel Idol 4, while the upcoming DTEK60 is likewise a rebadged Alcatel Idol 4S. In other words, BlackBerry gave up on hardware months ago, but this is just the official obituary.

However, just because its hardware division is going down the tubes doesn’t mean that BlackBerry as a whole is going away. In fact, the company’s software business is going strong and this is where BlackBerry will focus its energy going forward.

BlackBerry PRIV Open and Closed

"We are reaching an inflection point with our strategy. Our financial foundation is strong, and our pivot to software is taking hold," said Chen. "In Q2, we more than doubled our software revenue year over year and delivered the highest gross margin in the company's history."

The Canadian company intends to highlight its software products like BlackBerry Radar and BlackBerry Hub+ along with its automotive-centric QNX operating system to become the face of the company. Sure, there will be more Android-based smartphones that will carry the BlackBerry logo, but it remains to be seen if consumers even notice at this point.