Blackberry DTEK50 -25

Well, we kind of all saw this one coming eventually. After failing to make as big of a splash in the Android pool as they may have hoped, BlackBerry is finally calling it quits in the smartphone making department. The company says that they’re going to focus on what they know best: creating security-rich software.

Does this mean we won’t see BlackBerry branded phones in the future? By no means! BlackBerry says they’re just going to outsourcing phone design and production from now on, much like they did with the DTEK 50.

“We are reaching an inflection point with our strategy,” said Canadian company’s CEO John Chen. “Our financial foundation is strong, and our pivot to software is taking hold… The company plans to end all internal hardware development and will outsource that function to partners.”

In spite of this positive attitude, BlackBerry has been struggling as of late. Once an icon of mobile business, BlackBerry’s original line of smartphones failed to compete after the rise of robust app markets set into place by the likes of Google and Apple. By the time the company decided to shift to an Android-based model, they had fallen from the public view and found themselves competing with Android veterans like Samsung.

Furthermore, their first Android smartphone, the BlackBerry Priv, failed to garner as much appreciation as they had expected. Although impressively secure and touting a physical keyboard that appealed to a lingering niche market, the pricey Priv just didn’t coax enough people over.

Chen said they would need to sell 5 million phones over the course of the year to stay in the hardware game. After it became obvious that this was an impossible goal for the company to achieve, they decided to aim for 3 million. This too seems to have proven to be unreachable.

Our financial foundation is strong, and our pivot to software is taking hold.

Blackberry is reporting a net loss of $372 million on revenue of $334 million this quarter. Their decision to bail on hardware and attempt to play to their strengths, including stronger targeting of businesses and governments who highly value security, should come as no surprise to anyone.

What are your thoughts on BlackBerry bailing on the hardware side of smartphone development? Let us know your take in the comments below!

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