Blackberry has announced that it would stop designing and producing smartphones. However, the name will not disappear as the company will continue to live on as a software and services provider.

Blackberry CEO John Chen officially announced during a quarterly earnings report that the company would no longer make smartphones. However, the Blackberry brand will continue to exist as the company plans to license its name and software out to third party vendors. While the company's hardware business lost approximately $8 million last quarter, its software arm brought in $29 million in the same three-month period.

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Ralph Pini, COO and manager of Blackberry Devices, told Wired that "Some people might have some mixed feelings, but the compromise is actually a good compromise."

The Downfall of Blackberry

Blackberry used to be an innovative force in the technology industry. Google's first Android prototypes were Blackberry clones. Back in 2006, the company (a.k.a Research in Motion) had an advantage that neither Google nor Apple had - an excellent text-input method invented for a portable mobile device, an established relationship with carriers, and a loyal number of users and followers. Many corporations also relied on the security that the company provided, as well as the features such as good messaging and reliable e-mails that made people productive.

However, the same advantages also led to the downfall of the company. As Apple and the Android line were entering the smartphone market, Blackberry was focused on improving what it already had. So while its competitors were moving to bigger touchscreen displays and dual-core processors, the company kept dealing the conservative card.

But being conservative was only half of Blackberry's problem. The company is known to keep launching products without thinking that not all consumers were ready to put up with their limitations. For instance, the company once released the Blackberry PlayBook tablet without an email client on board. Recently, it also announced a new device called "Priv" without actually further explaining what the name stands for or the specific features the device could offer.

Blackberry's departure from the smartphone market leaves an important lesson to other tech giants - innovation or extinction.