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BlackBerry outsources phone design

Wednesday, September 28, 2016 - 01:15

The company that once dominated the smartphone market will outsource development of the devices. Fred Katayama reports.

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BlackBerry is hanging up on its smartphones. The iconic Canadian company will now outsource development and design. It'll instead collect a royalty on phones sold by partners. It had earlier outsourced phone manufacturing to the Taiwanese company, Foxconn. BlackBerry once dominated the corporate market for smartphones. Business users loved them for their email capability, keyboard, and secure communications features. But BlackBerry lost market share to Apple and Samsung. It's now betting on software and on managing email traffic on rival phones for corporate clients. Max Wolff of Manhattan Venture Partners: SOUNDBITE: MAX WOLFF, CHIEF ECONOMIST, MANHATTAN VENTURE PARTNERS, (ENGLISH) SAYING: "I think it was a pride, employment, and a legacy issue to hold onto the hardware. But it just doesn't make sense. They're not big enough for this to be profitable. It's an economy of scale business. You need to be able to ship a certain number of units to make money, and it was pretty clear they were not going to be able to ship that many units. So, overdue, and we think it's a good move." BlackBerry plans to fully exit the hardware business by year end. Investors cheered the move, driving shares sharply higher. They're still down more than 90 percent from their peak in June 2008.

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BlackBerry outsources phone design

Wednesday, September 28, 2016 - 01:15