BlackBerry to exit the hardware business

BlackBerry has confirmed it will no longer manufacture its own hardware, relying on licensing its brand and software to external developers.

The beleaguered smartphone maker has given up competing with larger rivals such as Apple and Samsung by transitioning into a software company.

BlackBerry has signed its first licensing agreement with an Indonesian joint venture, BB Merah Putih, led by the market’s largest mobile operator, Telkomsel. Indonesia has historically been BlackBerry’s largest market for devices.

The joint venture will provide BlackBerry-branded Android smartphones using the company’s secure software and Hub unified communications software.

“There are both strategic and financial benefits to our new approach,” BlackBerry COO Ralph Pini said.

“By continuing to bring BlackBerry devices to market, enterprise customers and consumers will still enjoy our unmatched, end-to-end value proposition which includes best-in-class capabilities in security. We will also work with our partners to define a competitive hardware portfolio, leverage their distribution scale and access new channels.”

On Twitter, BlackBerry noted that abandoning hardware production will allow the company to focus on security software and software for what it calls the Enterprise of Things.

The decision to exit the hardware business is the result of a year-long evaluation by CEO John Chen.

The company had attempted to stave off its steep market share erosion to Android and iOS by producing an Android-based smartphone loaded with BlackBerry apps and the signature physical keyboard, but the device proved too expensive for mass-market traction.

Image courtesy of Kārlis Dambrāns under CC