BlackBerry to opt out of Smartphone market by end of September 2016?
According to a report in the Motley Fool, BlackBerry may announce an exit from the market as soon as September 28, the day before it releases earnings for this year’s second quarter. This is due to the fact that the hardware makes up to about 65-percent of the company’s R&D expenditures, yet, the company manages to make only 1-percent of global smartphone market. Moreover, Wall Street analysts project that, on its current trajectory, the company will also lose money in 2017 and 2018.
CEO John Chen said he didn’t “personally believe devices [were] going to be the future of any company,” and that he’d make a final call in September about whether or not BlackBerry would continue to invest in smartphones. “The device business must be profitable — we don’t want to run a business that drags on the bottom line,” he said. “It’s time for us to get to the profitability … we’ve got to get there this year.” He added.
Accessory prices are being cut by up to 40 percent, while the BlackBerry Passport and Priv are being liquidated at up to half-off. Also their latest offering being the DTek50 is already under discount by a majority of the retailers.
The company’s apps and services subsidiary, Mobility Solutions Group, generates more than $500 million a year — the company said it’s aiming for 30 percent growth in the software. To that end, the company last month debuted BlackBerry Hub+, a premium subscription suite of the company’s Password Keeper, Calendar, Notes, Tasks, and Device Search apps for Android. Clearly, they do have a bright future in the software department which has always been the strength of the company.
One of its banners on the main BlackBerry site reads “Software is the new Blackberry”.
Well, looking at the company’s performance in last few years, putting an end to the Hardware division seems to be an appropriate choice. The silver lining is that this decision will allow BlackBerry to solely focus on the software division and grow better. Although, BlackBerry hasn’t confirmed the news yet and all of these are just speculations at the moment.
Stay tuned for more updates on this!