Blackberry has announced that it will no longer be manufacturing handsets in-house. Instead it will be licensing the manufacturing, distribution and promotion of Blackberry handsets.

The announcement was made as part of Blackberry’s Q2 Fiscal 2017 report issued yesterday. The firm reported earnings of $334 million in the period between May and August. That figure represents a $66 million decline in revenue since May.

The culprit behind this loss is believed to be the hardware Blackberry manufactures, hence the licensing-out of that part of the business.

“The company plans to end all internal hardware development and will outsource that function to partners. This allows us to reduce capital requirements and enhance return on invested capital,” Blackberry Chief executive officer, John Chen explained.

“In Q2, we more than doubled our software revenue year over year,” said Chen explaining that the Canadian based firm will now focus on developing software.

The Indonesian Blackberry

In light of this pivot, Blackberry announced the BB Merah Putih joint venture. Led by telco PT Tiphone Mobile Indonesia Tbk, the joint venture is supported by the Indonesian Government which is pushing the development and manufacture of local products.

“BlackBerry is a brand which Indonesians trust and respect, and this partnership will allow us to provide the type of mobile experience that our customers have come to expect with the productivity and security that the BlackBerry brand delivers,” CEO of PT, Tiphone Mobile Indonesia Tbk, Tan Lie Pin said of the licensing agreement.

The Blackberry CEO said that the Indonesian joint venture was the perfect way to offer Indonesian customers secure mobile software, exclusively.

So at this point the only time we suspect we’ll see a new Blackberry handset is if its a licensed product produced by another firm and that makes sense.

While the last phone from the firm – the Priv – was great, its clearly struggling in the swamped Android market.

We think pivoting to focus software is the right move and perhaps we’ll all benefit from more secure smartphone software developed by the firm in the future.

[Source – Blackberry] [Image – CC BY 2.0 Enrique Dans]