BlackBerry to stop making smartphones to focus on software

Iconic name in mobile devices to rely on third-parties to make BlackBerry branded devices

Mobile pioneer BlackBerry is to stop designing and making its own mobile devices as part of a long-anticipated shift in focus towards software and services.

However, BlackBerry-branded devices will continue to be offered - especially to corporate customers - but will be designed and made by third parties, such as TCL, the company behind the company's recently released DTEK50 mobile device.

It comes as BlackBerry prepares to release its final update to its own BlackBerry 10 operating system, version 10.3.3 - which was supposed to have been delivered in March.

BlackBerry, which once vied with Nokia for leadership of the smartphone market, pre-iPhone, claimed just 0.3 per cent of the global mobile market in the second quarter as it wilted under the competitive pressures exerted by Apple, Huawei and Samsung.

The firm strongly hinted earlier this year that it would make such a move - touted for several years now by analysts - if its mobile business didn't start to show signs of life.

BlackBerry CEO John Chen said at the time: "Since I started at the company I've been saying I'll make the handset business profitable. If I can't make it profitable because the market won't let me, I'll get out of the handset business. I love our handset business, but we need to make money."

The company has confirmed the move to investors, saying that production of any future BlackBerry devices, such as the BlackBerry DTEK60, will be outsourced to third-party manufacturers.

"Our new Mobility Solutions strategy is showing signs of momentum. Under this strategy, we are focusing on software development, including security and applications," he said.

"The company plans to end all internal hardware development and will outsource that function to partners. This allows us to reduce capital requirements."

BlackBerry has named just one partner so far that will be roped into building its devices: Indonesia-based BB Merah Putih.

The announcement was made during BlackBerry's second-quarter earnings call, during which the company revealed that revenue fell from $490m to $334m, year on year. The company reported a loss of $372m, despite reporting a profit of $51m in the year-ago quarter.

It wasn't all bad news, though. The company highlighted new software products such as BlackBerry Hub+ for Android, and said that it more than doubled software revenues year on year, and delivered "the highest gross margin in the company's history".

BlackBerry also claimed to have bagged 3,000 new enterprise customers in the past three months.