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anadian tech company BlackBerry turns its eyes to Indonesia in outsourcing manufacturing of its handsets to local smartphone distributor Tiphone Mobile Indonesia, right after announcing the multinational will no longer produce smartphones in-house.

BlackBerry and Tiphone formed a joint venture, called PT BB Merah Putih, which will involve the first licensing of its software and services to the latter so that Tiphone is able to produce and distribute new Android-based BlackBerry handsets. The value of the deal was not disclosed.

The venture is the first licensing partnership in a foreign market that the fallen smartphone giant has undertaken after announcing it will no longer directly manufacture smartphones in-house. Instead, the company will redirect its focus mainly on software manufacturing through its Mobility Solutions platform.

The joint venture was created as a way to show support to the Indonesian government to promote, produce and manufacture more 4G/LTE devices for the growing Indonesian market, as well as support the government’s plan for smartphones being sold in the country to have at least 30 percent locally-made content, according to an official statement announcing the deal.

“BlackBerry is a trusted brand in Indonesia, and taking advantage of the notably secure BlackBerry software will give us an opportunity to provide innovation and new high quality products to the Indonesian public,” Tiphone Mobile Indonesia CEO Tan Lie Pin said in the statement.

The BlackBerry-branded handsets that will be manufactured in Indonesia will not be made by BlackBerry any longer. The Tiphone Android-fitted BlackBerry smartphones will be produced at Tiphone’s manufacturing factory in Cikarang, West Java, and is thought to be in the price threshold of around Rp 3 million (US$231).

BlackBerry’s chief operating officer (COO) and general manager for devices Ralph Pini said the partnership came about because of the historical significance of the Indonesian market to BlackBerry, noting the past ubiquity of the signature BlackBerry Messenger (BBM) service becoming practically synonymous with mobile phone communication in that era.

Sixty million of BlackBerry Messenger’s total global user base of 90 million are from Indonesia. With a smartphone penetration of over 40 percent of the nation’s more than 250 million population, Indonesia is a substantial market in Asia.

With the partnership, Ralph noted that this would result in BlackBerry still being present in its largest marketplace. While BlackBerry itself would not manufacture its own phones anymore, the production will be leveraged to Tiphone’s third-party producers and research and development sector.

“[Hardware manufacturing] is a competitive market [...] it is low margin and hard to compete if you don’t have big enough scale. With this new strategy [on software], we will be able to operate with more capital needs and allocate investment more effectively,” Ralph noted on BlackBerry’s decision to phase out smartphone manufacturing in general.

He added BlackBerry currently no longer has official device manufacturing facilities since “a few years” ago as they have mostly left manufacturing to their partners. Around four to five years ago, BlackBerry initially had plans to build a manufacturing factory in Indonesia but plans fell through, leaving the government bitter about the decision.

Earlier in June, BlackBerry had also signed a partnership with media group PT Elang Mahktoa Teknologi (Emtek) to expand its BBM footprint to exclusively include content from Emtek.

A report from US-based research firm Gartner revealed that only around 650,000 units of Blackberry handsets were sold in the first quarter of 2016, far below the sales of gadgets run by Android operating systems, which notched up sales of over 290 million units.