BlackBerry could soon be planning to exit the hardware business claims Daniel Chan an analyst with TD securities. It is pretty well-known that BlackBerry's smartphone business isn't doing too well. The Canadian company has more or less abandoned its own BB10 operating system, and its new Android smartphone thePriv hasn't set the market on fire.
Many reports had earlier suggested that BlackBerry was readying a new Android smartphone called the Venice which was slated to be launched at the Mobile World Congress, but that never happened. Big ticket developers like Facebook have also abandoned the platform.
According to Chan, the move could actually be a healthy one for BlackBerry which has been cash-strapped. BlackBerry is not alone in the boat. In June 2015, Microsoft announced that it was scaling back operations of its Lumiasmartphone like based on Windows Phone, which states that breaking into the smartphone market is very difficult as it is dominated by Android and iOS.
Chan believes that BlackBerry could announce its departure from the hardware business at its Q4 earnings on April 1st. BlackBerry would become a $1.4 billion enterprise software company with a healthy operating margin of 33 per cent as per Chan's calculations.
It is estimated that around about 30 to 50 per cent of BlackBerry's R&D spending is on its handset unit which is a major drain as it doesn't make any money. However, if it exits the hardware business, then it could also mean the company may shelve its Internet of things product line. BlackBerry has been planning to release the Radar, an integrated trailer management service, which includes a self powered device.
If BlackBerry indeed does move away from the hardware business Chan believes the company will present a "much better overall picture than today."
@INDIATODAY
@INDIATODAY
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