Rumor: BlackBerry Closing Hardware Business Next Week

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Generally speaking, BlackBerry has really been struggling to profit from any one of its businesses in recent years but the company’s biggest issues definitely stem from its hardware division. The hardware branch of the Ontario-based firm is still spending close to 65% of its research and development budget despite mostly failing to produce results for years. In the second quarter of 2016, BlackBerry’s phone division only managed to sell half a million devices and the company as a whole is still hesitant about Android while the investors are begging for a change in strategy. Well, that change actually came last year when BlackBerry shifted a significant portion of its focus to software and related services but the company’s leadership still isn’t willing to stop investing resources into its phone business which amounts to less than 1% of the global market. At least, that’s what’s been happening so far.

Namely, if reports that surfaced earlier this week are to be believed, BlackBerry is readying a big announcement for its investors next week. The company is posting its earnings release for the second quarter of the year next Wednesday and numerous sources claim that BlackBerry’s CEO John Chen will use that opportunity to announce the closure of the firm’s hardware division. Chen was previously quoted as saying that he isn’t convinced any kind of device will be the future of BlackBerry and has reportedly said he’ll make the final decision about the hardware branch of the company in September. Given how September is nearing its end and there’s a convenient earnings report scheduled for the 28th, it isn’t impossible that the said date actually ends up marking the end of BlackBerry’s hardware-related endeavors. BlackBerry is also currently running a huge sale on all of its physical products which you can get at a 40% discount until September 27th. Not surprisingly, many claim that this is just further proof the company’s hardware business is coming to an end.

Less than six months ago, one of TD Securities’ analysts predicted that BlackBerry’s exit from the hardware market is imminent, stating that most signs suggest the company is preparing to announce a complete shift to software. However, it’s worth noting that even if these rumors come true and BlackBerry shuts down its hardware division, it’s likely that the firm will still be involved in the mobile phone business as evidenced by the recently released BlackBerry DTEK50 which was made by Alcatel-owned TCL and is effectively a rebranded version of the Alcatel Idol 4. That scenario would likely be a conciliatory solution for the company whose investors want to pull out of the smartphone market but whose management is still hesitant to do so. The last BlackBerry-made smartphone was the BlackBerry Priv which hit the market in November of 2015.