Blackberry and Foxconn agree five-year deal

The smartphone producer, Blackberry has agreed a five-year deal with Foxconn, the big Taiwan-based maker of electronic products and components.

The firm once dominated the smartphone market, but has seen its fortunes fall in recent years and last month abandoned an attempt to find a buyer. It also announced yesterday that it had made a third-quarter loss of $4.4bn (€3.2bn), including a big write-down of assets.

The two companies will initially work on the development of a new smartphone.

Blackberry recently appointed an interim chief executive, John Chen, following the collapse of a planned sale to its biggest shareholder, Fairfax Financial Holdings.

"It's an absolutely essential deal for Blackberry," Ben Wood, mobile analyst at research firm CCS Insight, said.

"Foxconn gives them the scale they need to be competitive, particularly in the Far Eastern markets, such as Indonesia - Blackberry's biggest market."

Blackberry has been hit by the success and popularity of smartphones launched by rivals such as Apple and Saung. Its attempts to boost its market share have not yielded the desired results.

"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," said Chen.

"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."

Foxconn is the world's largest manufacturer of electronic products and components, and already has extensive links with Apple as the maker of the iPad and iPhone.

Meanwhile, Blackberry's quarterly results continue to underline the company's struggle to regain financial stability. Excluding the one-time items and writedowns, the loss was $354m.

Revenue fell to $1.19bn from $2.73bn as increased uncertainty about the company's fate led to further sales erosion.

A new line of devices that run on BlackBerry 10 software has failed to win back market share.