BlackBerry loses $4 billion, moves manufacturing to Indonesia

Waterloo, Ont.’s BlackBerry Corp. had to deliver more bad news in its quarterly update to investors, with a $4.4 billion USD loss and a 44 per cent decline in revenue year-over-year, as CEO John Chen handled his first quarterly earnings report with investors.

While the company’s focus for the past year has been on its BlackBerry 10 OS and the devices that run on it, such as the new BlackBerry Z30 and BlackBerry Q10, it is struggling to move those devices off store shelves. Its BlackBerry 7 devices are still three-quarters of the smartphone maker’s sales in the devices business. The only cushion to that blow is that much of those losses are being attributed to restructuring efforts as the company reinvents itself after the departure of CEO Thorsten Heins and failed attempt to find a new owner that would perhaps privatize the company.

Interim CEO John Chen wasted no time making it clear he’s taking BlackBerry in a different direction during a conference call this morning. BlackBerry is announcing a five-year partnership with Chinese electronics manufacturer Foxconn, best known for making Apple products. Foxconn will now manufacture much of BlackBerry’s hardware, starting with a consumer device aimed at the Indonesian market for early 2014.

“This partnership demonstrates BlackBerry’s commitment to the device market for the long-term and our determination to remain the innovation leader in secure end-to-end mobile solutions,” Chen says in a press release. “Partnering with Foxconn allows BlackBerry to focus on what we do best – iconic design, world-class security, software development and enterprise mobility management – while simultaneously addressing fast-growing markets leveraging Foxconn’s scale and efficiency that will allow us to compete effectively.”

Foxconn says BlackBerry devices will  be made in Indonesia and Mexico.

BlackBerry also says it will focus on enterprise and government customers. It intends to continue to push adoption of its successful launch of BlackBerry Messenger on iOS and Android platforms and deliver reliable and secure messaging through its Networking Operations Centre (NOC). It will also grow its mobile device management business with on-premise and cloud-based solutions for cross-platform devices in addition to BlackBerry smartphones.

Read more details about the BlackBerry earnings report on IT World Canada.

Brian Jackson
Brian Jackson
Editorial director of IT World Canada. Covering technology as it applies to business users. Multiple COPA award winner and now judge. Paddles a canoe as much as possible.

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