BlackBerry confirmed Wednesday it will no longer manufacture its own devices, instead outsourcing it to partners.
DBless Innovative Tech—There wasn’t an inkling of surprise inBlackBerry’s announcement Wednesday that the bygone smartphone powerhouse would stop manufacturing its own hardware, part of a strategic pivot to security-focused software.
The surprise will be if it can pull it off a transformation that leads it anywhere near its former influence.
BlackBerry has been launching phones under its own brand that use its secure software on other handset makers' hardware, evidenced most recently by this summer’s launch of the security-minded DTEK50 Android phone, which is based on a TCL/Alcatel reference design.
“We haven’t been our own manufacturer of devices for some time now,” BlackBerry’s Vice President of Design and Device Marketing Scott Wenger told me on the phone.
But demand for recent and upcoming BlackBerry-powered devices may be contained to a tiny subset of the large, fiercely competitive smartphone market — a far cry from BlackBerry of its heyday.
The official pronouncement Wednesday out of Waterloo, Ontario, served as a punctuation mark to a long ago era, one still recalled with nostalgic fondness by a cadre of professionals who back in the day considered BlackBerrys an essential tool to conducting business.
Wenger made it clear that BlackBerry still plans to sell BlackBerry-branded phones, though he revealed no specifics on the product roadmap. BlackBerry previously killed its Classic line of phones.
There’ve been leaks that a high end Android-based DTEK60 touchscreen phone could turn up soon, and BlackBerry has stated that a Qwerty-keyboard Android phone was in the offing.
Expectations aren’t exactly high that these devices will be anything more than niche-oriented handsets, however, whose appeal lies mainly with corporate types who treasure BlackBerry’s roots in security.
BlackBerry did announce that the first licensing agreement under its new strategic path comes in a newly formed joint venture in Indonesia called BB Merah Putih. It is led by PT Tiphone, which is an affiliate of Telkomsel, the largest carrier in that country. Indonesia is now BlackBerry’s strongest market, telling in its own right.
BlackBerry is also still readying an update to its BB10 mobile operating system, but we’re talking about an operating system that barely registers. It’s no wonder BlackBerry has also embraced Android on recent models.
Indeed, by Gartner’s measures, phones based on the BlackBerry operating system recorded a puny global 0.1% market share in the second quarter of 2016, below even the 0.6% Microsoft has with Windows phones. Android and iOS devices claim an 86.2% and 12.9% share, respectively.
In a blog post, BlackBerry chief operating officer Ralph Pini indicated that “the future of the smartphone industry is about ‘the smart’ in the phone, and less about the form factor.”
Wall Street seems pleased with BlackBerry’s direction—the stock (BBRY) is up more than 5% in afternoon trading. But the smart and still unanswerable question right now is, how much will BlackBerry participate in that future?