BlackBerry’s unique deal with iPhone manufacturer Foxconn

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On Friday, BlackBerry, the struggling smartphone maker has announced that it is signing a handset manufacturing deal with Taiwan’ Foxconn. The two smartphone companies together, would develop and produce a major client’s handset, which would mainly target Indonesia, one of the numerous countries where BlackBerry devices remained strong and still dominating in the smartphone market.

After the BlackBerry’s announcement about the five-year deal with Taiwan’s Foxconn Technology, its stock price has increased. BlackBerry told that it is expecting to expand the relationship with leading smartphones. As per this deal, Foxconn will earn a profit on each product in response for taking up inventory management. Foxconn will also aid BlackBerry in designing, developing, and distributing the handsets.

John Chen, who took the controls of BlackBerry as chief executive last month, told that he hoped, the Foxconn agreement will aid BlackBerry to turn handset business cash-flow positive, and as a total to post revenue for the financial year that starts in early 2015.

Jefferies analyst, Peter Misek, said that it almost seems as BlackBerry is settling its handset trade without actually disposing of it. He also compared this agreement with laptops deal of Dell and Hewlett-Packard.  A latest series of products running on BlackBerry 10 software has unsuccessful to gain grip in the market which is pushing the company to reject $1.6 billion of stock and supply promises for the quarter. In earlier quarter, it rejected $934 million for unsold handsets.

Ontario-based company, The Waterloo, initiated the thought of on-the-go email. For years business and political leaders were using its phones and pagers. But in last few years, it has lost its control in the smartphone market to Apple’s iPhone and a range of smartphones supported by Google’s Android OS. Chen said that to change the products operations to a more beneficial business model is the biggest challenge for the company.

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