BlackBerry to end in-house development of phones, will outsource design, manufacturing, and selling of devices, focus on software after taking $372M loss in Q2
Roger Cheng / CNET :
Context & Ripple Effects
This is the endgame of a retreat that has been running for over a year: BlackBerry cut undisclosed numbers of device-business employees in May 2015, then killed the BB10-powered Classic in July 2016. Today's announcement converts that shrinkage into a structural decision — no more in-house phones at all, with design, manufacturing, and sales handed to partners while the company chases software and security revenue.
The $372M Q2 loss is the forcing function: the hardware business is burning cash faster than the turnaround can absorb. The related coverage also previews where the licensing path leads — by 2020, partner-built BlackBerry phones end entirely when TCL's manufacturing license expires, a reminder that outsourced hardware keeps the brand alive only as long as the licensee wants it.
First-order effects
- BlackBerry's remaining device staff and operations face wind-down or transfer to partners, while the $372M hardware-driven loss moves off BlackBerry's own books as third parties assume design, manufacturing, and selling costs.
- Partners taking over the devices gain control of the roadmap, meaning future BlackBerry-branded phones reflect licensee economics rather than Waterloo's product judgment.
Second-order effects
- BlackBerry's pitch to investors shifts to software and security margins, putting it in direct competition with enterprise mobility and security vendors rather than Apple, Samsung, and the Android pack.
- The brand becomes a licensing asset whose value depends on partner appetite — a dependency that materializes when TCL stops making BlackBerry phones in 2020.
Third-order effects
- Subscale handset makers without volume economics exit manufacturing for software and licensing — a consolidation pattern in which the phone industry narrows to players with genuine scale and everyone else monetizes intellectual property instead.
- Licensed hardware brands prove fragile: when the sole licensee walks away, as TCL did, the consumer presence disappears outright, leaving the licensor's enterprise software franchise as the durable business.
The trend: Smartphone manufacturing is consolidating around companies with volume scale, pushing subscale brands like BlackBerry out of hardware and into software and brand licensing.