BlackBerry: Partnership aims to rescue the firm Device segment with development of low-cost smartphones for emerging markets
São Paulo – Struggling to survive, the Canadian BlackBerry closed a five-year strategic partnership with the Chinese Foxconn , known for making Apple mobile devices
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The announcement was made on Friday, 20, the same day that the BlackBerry reported quarterly financial loss of U.S. $ 4.4 billion, precisely on account of the performance of the devices area, whose sales fell by half.
Thus, the partnership aims to recover the company in this segment with the development of low-cost smartphones for emerging markets, with initial focus on Indonesia and rapidly expanding markets.
According to CEO John Chen on disclosure of financial results conference, the first device developed jointly by the partnership uses the BlackBerry 10 operating system and will be released between March and April 2014.
“It will be a very competitive 3G device, and we’ll start on the Indonesian market, but we have six or seven more markets we assess that there is demand,” he says, confessing that she is already testing a prototype.
The partnership was not total merit of the executive. Chen explains that saw the opportunity to enjoy the experience and economics of scale of Foxconn, but that discussions between the companies were already taking place “some time” before he take over as CEO in place of Thorsten Heins, a little over a month. “What is good for the BlackBerry is that we left (design work and manufacturing) for someone who has experience with the ability to draw,” he explains.
production at the expense of Foxconn, the BlackBerry brand and will focus on the development of software, security and management of enterprise mobility, similar to Apple’s business model with its Chinese way.
smartphones will be manufactured at the Foxconn facilities in Indonesia and Mexico, and will be certified by the Canadian.
Focus corporate
In practice, the BlackBerry is outsourcing the development and construction of smartphones to reduce costs and decrease risks. But it does not mean that the company abandoned once the manufacturing and development -.’s High-end devices with corporate focus will continue in charge of headquarters in Waterloo, Canada
Probably this is related to one of the largest customers of the company, the U.S. government, which uses the BlackBerry software and hardware for security. Of course, there is Chinese technology in this critical environment could cause problems with these contracts.
BlackBerry CEO says there is no problem in continuing to develop and manufacture enterprise devices, even if the revenue margin is small.
“I’d be happy if (a division devices) only if paid or stay with a small profit margin, (since) to be able to monetize the software,” he says. He confesses, however, that outsourcing to Foxconn allows higher margins, which will be divided between the two companies, although the BB stay with most.
“They will be responsible for inventory and supply distribution chains, then we will no longer have those expenses fixed costs and inventory,” he says.
future, according to John Chen, the development of devices aimed at the end consumer can again be done in Canada. However, at the moment, with partner Foxconn is the best way out. “But in the near future, until we recover financially, it’s what we do,” he says.
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