BlackBerry CEO John Chen reveals that the company has teamed up with Foxconn to build budget phones. The first smartphone from Foxconn with BlackBerry branding should arrive some time in March or April 2014 and is expected to be a 3G phone based on BlackBerry 10.
The phone will be first launched in Indonesia, followed by some six or seven markets later. The deal is expected to help BlackBerry lower its exposure to financial risk and also give it time to work on its device pipeline so that the company can concentrate on higher-end devices.
BB10-based BlackBerry Z10
The Foxconn devices are to be manufactured in Mexico and Indonesia, and reportedly BlackBerry will retain all intellectual property associated with the devices. It should recoup revenue from the sale of the devices and also help free up BlackBerry's in-house designers to work on “very high-end” devices aimed at developed markets. However, it should be noted that it isn’t just competing with players like Nokia by building budget devices. Giants like Motorola are also targeting emerging markets with its low-cost value for money devices such as the Moto G, which will soon be available globally.
With this partnership, Foxconn will be working almost exclusively on the hardware. Chen was quite forthcoming with the financial aspects of the project as well. BlackBerry will help Foxconn “with the cost of manufacturing by paying a direct once production increases and costs are concrete”, and there won’t be any financial charges associated with carrying inventory. It will earn revenue from the sale of devices. Moreover, there is a provision in the agreement that allows Foxconn to also take a portion of that revenue, in case it exceeds a certain amount.