Why BlackBerry decided software, security was better than smartphones

Dive Brief:

BlackBerry confirmed Wednesday that is will no longer manufacture BlackBerry phones, but will outsource hardware development to partners.
The company will instead continue to focus on software development, apps and mobile security, according to CEO John Chen.
BlackBerry announced the change during its second-quarter earnings report. The company said second-quarter sales of the BlackBerry devices dropped to 400,000. In contrast, Apple sold over 40 million iPhones in its latest quarter, according to figures from USA TODAY.

Dive Insight:

It's the end of an era. RIP "CrackBerry."

BlackBerry once owned 50% of the global smartphone market. But the rise of the iPhone and Android devices created a shift in the market, and BlackBerry continued to struggle as the market evolved. BlackBerry’s share of the smartphone market eventually dropped to less than 1%, as touch screens became more popular than the seemingly dated keyboard.

Its recent attempt of launching a throwback phone with a keyboard ended in failure; the company stopped making the BlackBerry Classic just 18 months after launch.

Chen has been working to shift the company’s strategy since he took over. Though it will no longer make its devices, BlackBerry still has a broad base of customers to draw from.

Earlier this week, Chen said he is two-thirds of the way toward achieving his goal of turning the company around by shifting its focus to software that helps businesses manage their mobile devices in addition to security solutions. The company also announced this week that it launched a radar equipped tracking system. It’s entrance into the tracking systems market signals the company’s determination to establish itself outside of the personal device market.

There is also promise in the security and solutions market. The company has made several security-related deals with the federal government earlier this year. Only time will tell whether the turnaround succeeds. BlackBerry’s overall quarterly revenue of $352 million announced Wednesday missed Wall Street forecasts.