Dive Brief:

• Blackberry's decision to cease hardware production and instead license its software opened the doors for Indonesian manufacturers to turn the Canadian phone into a product "Made in Indonesia," the Wall Street Journal reports.
• The company inked a deal last month with Indonesia's PT Telekomunikasi, which will produce, promote and distribute Blackberry's products. 
• The decision comes on the heels of the Indonesian government's tightened requirements for locally produced content: As of July, 30% of the country's goods must be produced in the country. 

Dive Insight:

The alignment of the company's outsourcing decision with Indonesia's tightened regulations may be purely serendipitous, but it shows the potential impact of regulation on supply chain decisions as labor trends in the developed world shift away from component manufacturing. 

Blackberry's decision to outsource its manufacturing capabilities allow the company to focus its production potential on software and the Internet of Things, rather than smartphones. Yet, that does not mean the phones would stop being available altogether: the Blackberry holds the largest market share in Indonesia.

By relinquishing responsibility for the phone's manufacturing to a producer in a country with tight outsourcing regulations, the company will be able to ensure it remains competitive in its new field of focus.