Cheaper ‘made in China’ BlackBerries on the way

AppId is over the quota
AppId is over the quota
But deal with Foxconn could be bad news for Canadian workers
Chinese plants will be responsible for making BlackBerry’s smartphones in future, it has been revealed, as the troubled Canadian manufacturer struggles to turn itself around. Taiwan’s Foxconn, whose manufacturing sites are largely based in the People’s Republic, will also take over the hardware design of new devices, leaving BlackBerry to provide the software technology. First joint products are due to be released in the spring of 2014, codenamed Jakarta and initially aimed at the Indonesian markets. But the partnership, while generally welcomed by investors, could cause trouble for BlackBerry at home, placing as it does a question mark over the future of its manufacturing plants in and around Toronto.
It similarly raises issues about the strategic direction of Foxconn, listed as Hon Hai Precision Industry, and which employs around 300,000 workers in China’s Zhengzhou region and who, until now, have been busy making iPhones for Apple – BlackBerry’s nemesis.
BlackBerry’s CEO John Chen revealed the shake-up yesterday [20th December 2013] in a third quarter conference call where the company also revealed a $4.4 billion loss, adding to the huge losses it has already chalked up in recent years in the wake of competition from the likes of Apple and Samsung.
Despite this, said Chen, BlackBerry’s balance sheet “remains very strong” with an increase to $3.2 billion for the quarter, up from $2.6 billion last quarter and reflecting a $1 billion convertible debenture that was completed last month.
Chen described the new tie-up with Foxconn as helping to reduce purchasing obligations and inventory clearing costs.
He revealed BlackBerry still has 80 million users of its instant messaging platform, their numbers swelled by the release of the BBM app for Android and iOS devices and which is used daily by around two thirds of users who downloaded it.
Dave Evans is a long established commentator on both the IT and cellular industries. His current focus is on share price trends within the sector. You can email him here