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BlackBerry is going to stop making smartphones

The company behind the BlackBerry is making software a priority.

The rise of Apple's iPhone and Google's Android operating system crushed Blackberry's hold on the market. Credit: Richard Drew, AP
Brett Molina
Written by Brett Molina

September 28, 2016

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It's the end of an era for smartphone maker BlackBerry.

The company confirmed Wednesday it will no longer manufacture its own devices, instead outsourcing it to partners. BlackBerry CEO John Chen says the company will prioritize software development, including apps and security.

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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."

Shares of BlackBerry are up more than 3% in pre-market trading.

{{ amazon name="Blackberry Q10 Unlocked Cellphone, 16GB, Black", asin="B00C1DIGRI", align="right" }} 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.

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