BlackBerry Announces New Partnership With Foxconn

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BlackBerry has announced a partnership with Foxconn in the manufacture and distribution of electronic devices to developing nations, Bloomberg reports. The deal seems like a perfect fit between the two companies. BlackBerry traditionally has fared well in terms of its software, but it has struggled in virtually every other aspect of the business. Foxconn excels at manufacturing hardware, and also specializes in supply chains and delivery for maintaining proper inventories across the globe. The two companies have chosen emerging markets as their primary target for the devices, attempting to expand into newer areas in regions where BlackBerry has done comparatively better.

However, there are concerns about whether sufficient demand exists in emerging countries to warrant the partnership. In addition, because profit margins are so lean, it can be difficult to make significant amounts of money by selling only to those markets. John Chen, BlackBerry’s new CEO, has said that he would be happy to break even on the initiative, at least at the beginning.

BlackBerry is coming off of one of the roughest quarters in the company’s history. Its projected buyout by Fairfax was stillborn. The company’s losses in the third-quarter were 67 cents a share, far worse than the 46 cents expected by most analysts. In addition, the company reported sales of just under $1.2 billion, significantly below the $1.6 billion estimate, which would have been approximately what the company executed in the second quarter of 2013. Chen, though, has been unfazed, unveiling a plan to revamp BlackBerry’s business.

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