End of an era: Blackberry will no longer make its own phones

Lynsey Barber
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Blackberry's have been overtaken by other brands (Source: Getty)

The once high-flying Blackberry has come crashing to the end of production of its own phones, saying it will outsource making any hardware to other companies.

The struggling phone maker will instead focus on its software and services after failing to keep up with the rise of Apple and touch screen smartphones.

The Canadian firm which once dominated the market had previously said 2016 was a crunch year and chief executive and chairman John Chen warned that the future of the business as a maker of devices was at risk if it wasn't profitable by the end of the year.

Read more: No one asked for it, but Blackberry's launched a new phone

The news came as it reported a slump in revenue and another loss for the quarter of $372m, or 71 cents per share.

That loss was a 44 per cent reduction on the first quarter, but compared to a $51m profit in the same period last year. Revenue came in at $334m, down from $490 a year earlier and $400m in the prior quarter.

Taking out one-off items, including $147m in impairments from its reorganisation, the company broke even.

On ending phone production, Chen said:

“Our new Mobility Solutions strategy is showing signs of momentum, including our first major device software licensing agreement with a telecom joint venture in Indonesia. Under this strategy, we are focusing on software development, including security and applications. The company plans to end all internal hardware development and will outsource that function to partners. This allows us to reduce capital requirements and enhance return on invested capital."

The brand earlier this year produced its very first Android-based phone, the Priv, but that failed to ignite flagging interest, and then followed up with a similar device that complexly ditched the trademark qwerty keyboard.

Chen heralded the turn to software however, saying revenue in this part of the business "more than doubled year-on-year and delivered the highest growth margin in the company's history".

Read more: Blackberry losses grow ahead of crunch year for smartphones

The company also forecast 30 per cent revenue growth here for the full year, upping its forecast for the year of earnings per share of between zero, or breakeven, and a five cents loss ahead of the 15 cent loss previously expected.

"This reflects increased confidence based on improving margins and reduced interest expense from the recent refinancing of our debt, as well as planned investments in growth areas," said Chen.

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