Blackberry is to stop designing smartphones in-house after 14 years, the company has announced. Once, many years ago a market leader, the company has struggled to keep pace with modern handsets produced by Apple and Samsung. In May the company’s chief executive said he would know by September whether the hardware business was likely to become profitable. Now Blackberry says it will outsource hardware development to partners.
BlackBerry CEO John Chen says the company will prioritize software development, including apps and security.
The revelation was made in a release detailing second quarter earnings, which showed revenue of $352 million, missing Wall Street forecasts compiled by S&P Global Market Intelligence. Non-GAAP earnings per share were even for the quarter, beating analyst estimates of a loss of 5 cents a share.
“We are reaching an inflection point with our strategy,” said Chen in a statement. “Our financial foundation is strong, and our pivot to software is taking hold.”
At one point, BlackBerry owned the smartphone market with its signature devices featuring a QWERTY keyboard and sophisticated software. With the rise of the iPhone as well as Google’s Android platform, BlackBerry soon fell out of favor with enterprise and consumers.
BlackBerry attempted a comeback in 2013 with the launch of a touchscreen-only smartphone as well as its BlackBerry 10 operating software. However, poor sales pushed the company to consider a potential sale later that year. BlackBerry eventually dropped the sales bid and replaced CEO Thorsten Heins with Chen.
BlackBerry has since made multiple efforts to revive its smartphone business, including the August launch of the Android-powered DTEK50, which the company claimed was the most secure smartphone in the world.
BlackBerry’s fall from dominance prompted many of its customers in the enterprise market — once a stronghold for the company — to switch to iPhones and Android devices. Last summer, the U.S. Senate finally dropped BlackBerry.