Embattled mobile phone firm BlackBerry revealed it will stop designing smartphones in-house as it posted more losses and plunging sales.
The Canadian firm said it will outsource hardware development to partners and focus instead on software.
It comes after the group - once a ma rket leader - has lost out to smartphone rivals Apple and Samsung in recent years.
BlackBerry boss John Chen said: "We are focusing on software development, including security and applications.
"The company plans to end all internal hardware development and will outsource that function to partners."
BlackBerry also announced second quarter results revealing it tumbled into the red with net losses of 372 million US dollars (£286 million) against profits of 51 million US dollars (£39 million) a year earlier.
Its revenues slumped by 31.8% to 334 million US dollars (£257 million).
The group said excluding one-off items, it broke even in the three months to August 31, while it added that it more than doubled software revenue.
BlackBerry's second quarter results take its total half-year net loss to 1.04 billion US dollars (£799 million) against profits of 119 million US dollars (£91.4 million) a year ago.
But it said the full-year outlook was stronger than expected thanks in part to higher profit margins, with the group now set for a range between break-even on an underlying basis to a loss of five cents a share.
Mr Chen said the firm's "pivot to software is taking hold", with the group on track to see software and services revenues surge by 30% over the full-year.
It sought to turnaround its fortunes last year by producing its first smartphone-running Google's Android operating system rather than its own BB10 software.
But it was too expensive to appeal to the mass market.