Reports claim that the Canadian handset makers, BlackBerry are all braced up to sign a handset production deal. According to BlackBerry, the deal will allow them bring down the risk factor involved in the writedowns of the unsold Smartphones. The shares of the company surged in spite of the gloomy quarterly results.
The stocks jumped up about 17 per cent after the announcement from BlackBerry became public. The company will be signing a deal for five years with FIH Mobile Ltd. According to the plans, they will be first manufacturing Smartphones that fall in the low range budget.
The targeted market will be Indonesia to begin with. They will be working on other emerging markets as well. The deal also mentions that BlackBerry won’t be paying anything upfront for the parts and components those will be used for manufacturing the devices. The handsets will be produced at Foxconn factories in Mexico and Indonesia.
Foxconn, it is understood that will be taking a share of the profit on every device in return for inventory management. Foxconn will also be assisting in the developing and designing phase of the handsets apart from contributing in distributing the handsets.
BlackBerry Chief Executive John Chen has expressed confidence of the Foxconn-BlackBerry deal to show some positive results when it comes to sales. BlackBerry also hopes to post profits for the next financial year.
BlackBerry recently had plans to sell off the company. However, they later gave up the plan to do so. The move had come after BlackBerry had suffered losses to the tune of $4.4 billion.