BlackBerry outsources smartphone business

The highlight of BlackBerry’s last quarter was its announcement that it would stop making smartphones directly. The media was all over the “exit” part of the story, rehashing BlackBerry’s misstep many years ago. Remember the time when Android was growing in the double digits in 2010/11? Apple’s iPhone was growing quickly too. BlackBerry’s market share were all but lost.

The Blackberry passport

BBC wrote that BlackBerry would stop designing phones. Global news asked what it would do next after kissing smartphones goodbye. The once-dominant smartphone maker is handing over the design and building of future devices to an Indonesian firm. The move makes lots of sense, but it does weaken the company’s attempt to win any market share in North America.

Retrenching back to its traditionally strong market – Indonesia – will play out favorably for BlackBerry. The company makes solid, reliable, secure smartphones. Its major headwind at each turn was the market not catching on early enough. The PRIV, which is on sale at BlackBerry’s store for a limited time at around CAD $550, is the only Android phone with a physical keyboard. The DTEK50, which the company released this summer, finally addresses the mainstream market. The upcoming DTEK60 markets true Android security for consumers willing to pay for it.

BlackBerry’s BBOS10-based phones brought new ideas to design and productivity, but the OS was simply too small. Almost nobody developed on this OS because BB10 had too small a market. It only made sense to develop on Apple iOS or Android. Still, Passport’s 1:1 screen resolution was perfect for Instagram. Its wide-screen made reading documents easier. Before Passport, the Z30, a 5-inch device, Classic, Q10, and Z10 all had a small form factor. Unfortunately, running on the BlackBerry OS hampered sales.

INSIDE Apple iphone 6 720wide

Businesses will miss BB10, but BYOD will shift the implementation of mobile security from hardware to software. BlackBerry bought Good Technology as this trend unfolded. Good has thousands of apps that run well on iOS. These apps give businesses secure and productive mobile solutions. Acquiring WatchDox gives the ecosystem a Box, Dropbox, or OneDrive-like platform for sharing files. BlackBerry stands by the security WatchDox offers.

Watch DTEK60 and Priv

BlackBerry’s early announcement that it is outsourcing hardware puts DTEK50, DTEK60, and Priv in an awkward disadvantage. While the company will earn a royalty on their sales, profit will mean less for the Mobile device management software maker. It is absolutely critical that BlackBerry continue marketing and encouraging its enterprise customers to buy these devices. BlackBerry’s implementation of the iconic keyboard, Hub, mail, and Calendar are well thought-out. It ought to continue making Android’s integration in work environments the best possible experience for mobile workers.

BlackBerry cannot really tout the value of its MDM solutions in the enterprise if it ignores software design and development on smartphones. The company may have retrenched to the Asia-Pacific region and Indonesia. That should not mean it should ignore the North American market.

BlackBerry should make sure DTEK60’s release is a success. BlackBerry should price the latest Android competitively, lower than the rumored CDN $699 price tag. Priv’s price drop should be made permanent.

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Jim Love, Chief Content Officer, IT World Canada
Chris Lau
Chris Lau
In search for alpha. Telecom, media, technology. Social media. Financial Markets. Real-Estate Agent. Seeking Alpha Contributor. Toronto, Ontario ·

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