BlackBerry signs deal with Foxconn amidst reports of $4.4 billion loss

BlackBerry LogoBlackBerry has announced that it has signed a five year contract with Taiwan electronics manufacturer Foxconn, following a reported $4.4 billion dollar loss in its third quarter.

The plummeting sales is an astonishing increase in what was already a failing profit margin, making the dire circumstances for the brand positively catastrophic.

For the past several months, BlackBerry has been looking for buyers to take over the failing company. Among those who were believed as potential buyers was former Apple CEO John Sculley, though no official bid was ever made.

However, the search has not been going well. BlackBerry began to realize that selling themselves off was not going to save anything. Which is when they started to seek out other options. With a $1 billion investment from various Purchasers (including investment firm Fairfax), they hired on an interim CEO, John Chen of Sybase, and continued on.

Of course, now they have lost $4.4 billion, rendering that investment useless.

Their solution has been to refocused their attentions on developing a new smartphone to hopefully drive back consumer interest. Leading to their team up with the controversial Foxconn.

Now, I don’t want to sound negative, but is this really a good idea? You might remember Foxconn as being the massive manufacturing plant given the iPhone and iPod contracts from Apple in 2007.

Or you might remember them from the alarming rate of suicides from their workers, continuous working condition complaints from non-profit groups and labor investigation agencies.

Or the fact that they were found to be employing 14-year-olds at one of their plants

Or the riot involving 2,000 employees at one of their overcrowded factories.

Or reports of the cramped and inhumane dormitories, long working hours, underpaid wages, unpaid mandatory overtime, high number of injuries, reports of racism against mainland Chinese workers…

My point is, there are a lot of accusations against Foxconn, and a lot of them have been verified in audits.

If Blackberry wants to reestablish themselves as a trusted brand, and start boosting sales again, signing a contract with a company that has been repeatedly in the news for their controversial treatment of workers doesn’t seem like the best way to do it. Just the name of Foxconn brings up unpleasant images of  desperate employees plummeting to their deaths as they jump a building.

Chen disagrees.

“This partnership demonstrates BlackBerry’s commitment to the device market for the long-term and our determination to remain the innovation leader in secure end-to-end mobile solutions. Partnering with Foxconn allows BlackBerry to focus on what we do best – iconic design, world-class security, software development and enterprise mobility management – while simultaneously addressing fast-growing markets leveraging Foxconn’s scale and efficiency that will allow us to compete more effectively.”

Whatever you say, man.

Source: BBC

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