BlackBerry Manufacturing Partner Looking to Bail
BlackBerry’s ongoing collapse is becoming a serious drag on the company’s manufacturing partner Jabil Circuit. So much so that Jabil is considering ending its business relationship with the struggling smartphone pioneer.
Discussing Jabil’s fourth-quarter results during a call with analysts on Wednesday, CEO Mark Mondello said that BlackBerry’s downward spiral has given him reason to reconsider his company’s partnership with it. BlackBerry is Jabil’s second-largest customer overall, making up 12 percent of its business (Apple comprises 19 percent), and its gruesome finances and uncertain future are already negatively impacting Jabil’s business.
“We are faced with a strong possibility of disengaging with BlackBerry,” Mondello said. “Our team has worked diligently over the past few days to comprehend the recently announced changes. … We’re in discussions right now on how we’re going to wind down the relationship.”
Mondello wouldn’t say how quickly that disengagement would occur, but his remarks suggest that this is something Jabil is looking to resolve fairly soon.
“Timelines are fluid,” Mondello said. “But, directionally, we have a path, a path that we believe is prudent and in the best interest of our shareholders, a path that also supports the needs of BlackBerry. We plan to take a restructuring charge, move swiftly and decisively and mitigate the impact to FY ’14 as best we can.”
It’s not going to be pretty, though. Jabil’s relationship with BlackBerry is a large-scale one that has taken significant infrastructure and labor to support. Winding it down is going to take some doing, and inevitably some layoffs, as well.
Asked to comment on Mondello’s remarks, BlackBerry, unsurprisingly, didn’t have much to say. “We value our business partner relationships around the world, and we remain committed to working collaboratively with them to deliver industry-leading quality products and services,” a company spokesman told AllThingsD.