As a phone brand, Blackberry (NASDAQ: BBRY) refuses to die.
The company kept making its once-popular handsets for years after consumers stopped caring. It only recently stopped — finally — in order to focus on its software business. But before the company’s small remaining fan base even had a chance to grow nostalgic, the company has signed a deal to license its technology to TCL.
What is BlackBerry doing?
The company has entered a long-term licensing agreement with TCL Communication Technology Holdings Limited. That deal will allow TCL to “design, manufacture, sell and provide customer support for BlackBerry-branded mobile devices,” according to a press release. Under the agreement BlackBerry will “continue to control and develop its security and software solutions, serve its customers and maintain trusted BlackBerry security software, while TCL Communication will manage all sales and distribution and serve as a global distributor of new BlackBerry-branded mobile devices along with dedicated sales teams.”
It’s a smart move for BlackBerry, which gets to keep its best-known product alive without having the risk of making and selling it. If TCL succeeds in building a market, or even maintaining the existing one, BlackBerry wins. If it does not, then the company is really in no worse a position than it’s in now.
“This agreement with TCL Communication represents a key step in our strategy to focus on putting the ‘smart in the phone’ by providing state-of-the-art security and device software on a platform that mobile users prefer and are comfortable with,” said BlackBerry COO Ralph Pini. “TCL Communication is the natural choice to license BlackBerry’s software and brand on a global scale.”
This deal could work
BlackBerry still has its fans among people who need a highly secure phone. It has remained popular with government workers and it retains a user base in some parts of the world.
This agreement gives TCL a chance to build on those strengths while allowing BlackBerry to eliminate the distraction of having to focus on a legacy product — but without eliminating it entirely. Phones are no longer what drives BlackBerry, but this deal could turn a negative back into a positive.
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Daniel Kline has no position in any stocks mentioned.
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