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BlackBerry to Outsource Hardware production

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blakberryFollowing the switch from it’s own operating system to the Android powered BlackBerry Priv , now BlackBerry has announced that it will no longer be producing any more devices and has declared a loss of $372 million in it’s hardware business. It has been seen that in recent years BlackBerry has been lacking in sales , comparing with the likes of Samsung and Apple and various other smartphone companies. The company has been working hard to rectify the underlying issues , for example by switching to the Android system , however lack of sales , a large  ratio of hardware returns and repeated financial losses have led the company to finally call it  quits.

According to the CEO of BlackBerry, John Chen, BlackBerry is focusing on outsourcing hardware development  to various partners and will no longer be producing their own hardware.

“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 would like to divert it’s attention to the development of their software business which has given them considerable sales during the last few years , and this can only be possible by letting it’s partners produce the hardware, as according to reports by BlackBerry of a net loss of $372 million on $334 million revenue.

“We are reaching an inflection point with our strategy. Our financial foundation is strong, and our pivot to software is taking hold. In Q2, we more than doubled our software revenue year over year and delivered the highest gross margin in the company’s history.”

Another announcement pertaining to the company is the resignation of the Chief Financial Officer ,James Yersh ,and succession of this post by CEO Chens long time collegue Steven Capelli, both of whom have said to have been working with each other since their time at Sybase. We will have to see what these developments hold for the advancement of the company.

(Source: Recode)

 

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