BlackBerry moving away from high-end consumer phone market


Chairman/interim CEO John Chen states on BlackBerry's (BBRY -2.4%) FQ3 CC new OEM partner Foxconn, initially focused on low-end/emerging markets phones, will handle most of BlackBerry's phone design work going forward, and that BlackBerry will only design a limited number of high-end, enterprise-focused phones itself.

Chen, who has already suggested BlackBerry will be an enterprise-focused company going forward, says he does hope BlackBerry would be able to design its own high-end consumer phones in the future, but thinks the company needs to focus its resources on enterprise software for now.

One bright spot: BlackBerry says it has added 40M+ registered Android/iOS BBM users since making BBM apps available on the platforms in October. For reference, BlackBerry claimed to have ~60M BBM users on its own devices earlier this year. BlackBerry has promised to eventually monetize Android/iOS users via ads; new value-added services are also a future possibility.

The first BlackBerry/Foxconn phone will be a 3G BB10 device likely to arrive in March or April. BlackBerry still has a sizable emerging markets base, but is also facing very tough competition from low-end Android phones, including sub-$100 products from white-label OEMs.

FQ3 results, details/Foxconn deal, PR

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Comments (13)
  • LoganSix
    , contributor
    Comments (784) | Send Message
     
    The title is misleading, nowhere does it say it is moving away from high-end. It is actually increasing its range to lower end.
    20 Dec 2013, 09:53 AM Reply Like
  • Eric Jhonsa
    , contributor
    Comments (1276) | Send Message
     
    It's not misleading. Chen stated on the CC BlackBerry won't be designing new high-end consumer smartphones for now (could change in the future), and that the Foxconn partnership will be focused on low-end/emerging markets products for the time being.

     

    BlackBerry is clearly focusing on growing its enterprise sales for now, while counting on Foxconn to help it hold onto its emerging markets base. I think it's a smart move given the hold Android/iOS have on high-end consumer sales, and the market seems to agree.
    20 Dec 2013, 11:51 AM Reply Like
  • Randal James
    , contributor
    Comments (4406) | Send Message
     
    Can't fault them for looking at current strengths in underdeveloped countries. Those will not be easy to reach by the small Chinese and Indian start-ups. At the same time, the comment on working on software for enterprise is an admission that BYOD is a significant force they should join rather than fight. No one can predict how security will be threatened in the future or overcome by the other manufacturers, so this keeps the door open and they will still have the opportunity to sell their own devices to whomever wants them yet not restrict BES by insisting it is a BBRY-only system.

     

    Now comes the hard part - selling it to corporate and other users.
    20 Dec 2013, 09:56 AM Reply Like
  • alandal
    , contributor
    Comments (6) | Send Message
     
    so it would be a lot easier for "the small Chinese and Indian start-ups" to come to markets like NA and EU?
    20 Dec 2013, 10:42 AM Reply Like
  • Randal James
    , contributor
    Comments (4406) | Send Message
     
    Sorry alandel,

     

    BBRY had good pockets of strength in Africa, Latin America and the Middle Eastern countries where there is no home-grown manufacturing to speak of. It is more difficult for a start-up to grow beyond its borders especially into regions that are poorly understood. By THAT, I mean there are nuances to every market and the Chinese do not have someone to navigate Argentina for them. But the newer BBRY devices we are most familiar with - the expensive ones released this year under BB10 - are too expensive for most of those developing markets and the Foxconn phones will more readily fit those budgets.

     

    In a way, these newer Foxconn phones are likely defending BBRY's existing turf and customers from intrusions by Microsoft's Nokia phones and the ever present and cheap Samsungs.

     

    Because of the cost advantages of making for oneself in China and India, I would expect to see more of those phones from the strongest of the newer companies in the US and EU when their specs match more closely to existing brands.
    20 Dec 2013, 11:02 AM Reply Like
  • Timmy123
    , contributor
    Comments (112) | Send Message
     
    Do you really think BBRY is only going to offer a 3G phone to consumers?
    You really are mis-reading what is being said.
    20 Dec 2013, 09:58 AM Reply Like
  • Toastypro
    , contributor
    Comments (523) | Send Message
     
    It will take more than two to three years to ramp up 4G infrastructure in emerging market. Even in US, sprint hasn't gone through complete 4G upgrade yet. It is a good strategy to defend the Blackberry brand in existing emerging market with low end phones and at the same time high volume production will help to reduce the overall production cost when dealing with contract manufacturers like Foxconn.
    20 Dec 2013, 11:22 AM Reply Like
  • ATInsider
    , contributor
    Comments (424) | Send Message
     
    The title is misleading. They are increasing there stake with low-mid end devices for emerging markets. And they are continuing with high end devices. Such as the rumoured Z50 and Q30.

     

    All in all, stock shouldn't be going down, it should be going Up.
    20 Dec 2013, 11:41 AM Reply Like
  • HardAssets
    , contributor
    Comments (7) | Send Message
     
    Let me see if I have this straight....a company whose stock is trading at $6.25 per share announces a quarterly loss of $8.37 per share (134% of share price) and the stock price runs up to $7.34?

     

    Is everybody crazy? My only regret is I shorted this too soon but I'm still confident I'll see a profit on this one. These prices won't hold!
    20 Dec 2013, 02:15 PM Reply Like
  • gamblinfool777
    , contributor
    Comments (122) | Send Message
     
    lets focus on the low end...yep that's a good idea...lol
    21 Dec 2013, 08:18 AM Reply Like
  • Crazy Mazy
    , contributor
    Comments (432) | Send Message
     
    at gamblin why not, right now BB needs to start making sales and ramp up adoption of BB10 OS. They need to start becoming profitable. The high end sales will come once BB10 Os becomes more popular and App ecosystem grows.
    21 Dec 2013, 11:42 AM Reply Like
  • Crazy Mazy
    , contributor
    Comments (432) | Send Message
     
    @ hard , listen hard the reason the stock went up is because the market and the shorts saw that JC is for real and he is making bold moves to make sure Blackberry will succeed with their restructuring. They knew the results were going to be bad and it was already factored in. If JC had fumbled the ball at the CC and didn't say anything to instill confidence that BB was on the road to recovery then yes this would of been a disaster the shorts were looking for. But he didn't fumble and said all the things that the market wanted to hear, as well as that surprise of the deal with Foxcom (which nobody was expecting) to ensure that they can be profitable and sell phones in the emerging markets.
    21 Dec 2013, 11:42 AM Reply Like
  • mittensme
    , contributor
    Comment (1) | Send Message
     
    MittensMe Comment (1)
    u guys are thinking about this way too hard... to K.I.S.S. (keep it simple stupid) the company's' not going to make a Galaxy S4 but, more toward the Optimus... Same OS (and in this case same brand i.e.. BlackBerry Whatchamacallit) better pricing. So they are wolfing up the OS and probably will drop a couple good priced phones then when they got that worked out move on to better phones. remember when android came out with phones like optimus but only dropped one official DROID it'll b like that.
    12 Feb 2014, 01:22 AM Reply Like
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