What Does Foxconn Deal Mean for BlackBerry? - Canada Real Time - WSJ
Will Foxconn be BlackBerry's saving grace?
Aside from another quarter of disappointing earnings, the big news of the day is BlackBerry’s a five-year strategic agreement with China’s Foxconn, formally known as Hon Hai Precision Industry Co.2317.TW -0.38% and the well-known maker of other high-end smartphones, namely Apple Inc.’s iPhone.
According to BlackBerry, Foxconn will jointly develop and make certain new devices aimed at markets that BlackBerry still has a foothold in, such as Indonesia and Mexico.
“Partnering with Foxconn allows BlackBerry to focus on what we do best – iconic design, world-class security, software development and enterprise mobility management – while simultaneously addressing fast-growing markets leveraging Foxconn’s scale and efficiency that will allow us to compete more effectively,” interim BlackBerry CEO John Chen said in Friday’s earnings statement.
It seems like a confident first step by BlackBerry in a move away from building its own devices and focusing on its remaining strengths — security and software-management services.
Perhaps more telling is a boilerplate-looking paragraph in BlackBerry’s release that provides a possible glimpse into what the company’s services-oriented future will look like.
Here’s how that part of the company’s statement reads:
“BlackBerry will focus heavily, via internal development, on market segments where its continuous innovations in secure hardware, software and services remain critical and integral to enterprise and government customers,” the company said.
“BlackBerry also intends to drive adoption of its multi-platform BBM, deliver real-time, reliable and secure messaging through its Network Operations Center (NOC), and grow its enterprise mobility and mobile device management business through on-premise and cloud-based solutions for cross-platform devices as well as its own.”
BlackBerry’s interim CEO John Chen said during the earnings call that the talks with Foxconn started with prior management. He described the partnership as a “great deal.”
More tellingly, Mr. Chen said Foxconn will help improve BlackBerry’s inventory exposure, supply chain issues and will likely take over its hardware design. He said the first joint product with Foxconn is expected to be out by April.
(Updated with comments about the Foxconn deal in the last two paragraphs.)