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BlackBerry strong after outsourcing move; no decision on latest phone

Sep. 28, 2016 7:00 PM ETBlackBerry Limited (BB) Stock, BB:CA StockBBBy: Jason Aycock, SA News Editor11 Comments
  • BlackBerry (BBRY +5.7%) surged to its highest point since the beginning of the year today, as it moved to outsource its internal hardware development after losses piled up.
  • The move out of hardware (to focus on software/services) would mean fewer than 100 job cuts, CEO John Chen said today; that takes into account that reductions have already been made. And he said he hadn't decided whether to put out the phone that the company has already produced.
  • "If I decide not to go ahead with that phone, you may have seen the last BlackBerry-designed phone," Chen said.
  • Meanwhile, The Wall Street Journal this evening has written an elegy to BlackBerry's devices, once essential but then left in the dust by faster-moving competitors. After a peak of 52.3M handsets sold in 2011, BlackBerry had just 3.2M device sales in the most recent fiscal year.
  • The company underestimated the shift on mobile devices, the WSJ says: "When [founder Mike] Lazaridis conducted an autopsy on Apple Inc.’s first iPhone in the summer of 2007 he was stunned to find so much computing power inside the sleek phone. The phone was nonsensical, he told his team. There was no way the networks could manage the videos, photos and other internet traffic Apple was promising iPhone users." But Apple's exclusive deal with AT&T gave the carrier a huge incentive to upgrade networks.

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