We all saw it coming. BlackBerry devices will no longer be manufactured by BlackBerry. In other words, the phones still exist, but any manufacturing needs it has in the future will be handled by third party partners. The phones were beloved by the likes of President Obama and some celebrities, but after 20 years of making its own ubiquitous hardware, the Canadian company is transitioning to be exclusively a software business.
It’s a hard time to be in the phone hardware business if your name isn’t Apple or Samsung. BlackBerry CEO John Chen said last year the company needed to sell 5 million devices a year in order to successfully stay in the manufacturing game, later moving this target to 3 million. It only sold 500,000 phones in the first quarter of 2016. Ouch.
In light of Apple selling more than 74 million iPhones in this same timeframe, the damning implication is that BlackBerry simply can’t compete on hardware anymore. It’s abandoning that business in order to focus on software, and it’s a move that investors like — BBRY shares are up $0.44 on the news. Furthermore, BlackBerry’s financials remain strong. The company is sitting on $2.5 billion to carry it in this new direction, and software is a much higher-margin business. If BlackBerry engineers can crack the code of providing something people want, BlackBerry is poised to thrive in the future. Coming at you like some kind of technology cockroach, BlackBerry simply won’t die without fighting and reinventing itself, even if it means killing off its flagship products.