John Chen’s Software Move Is Great for BBRY Stock
Beleaguered underdog BlackBerry Ltd (NASDAQ:BBRY) has once again surprised the market. A new technology is taking off from its HQ that could turn out to be a game-changer for BBRY stock.
BlackBerry’s “QNX” OS (operating system) may have turned out to be a dud in the smartphone industry, but it has managed to create a new niche for itself. The QNX OS is turning out to be a game-changer for the company in markets where it was least expected to find traction. Neither Alphabet’s “Android” nor Apple’s “iOS” compete with QNX in this niche.
To make this possible, BlackBerry had to swallow a bitter pill. The company had to give up on its own OS for its hardware and switch over to the Android OS. Meanwhile, the company had to look for another lucrative market where its QNX OS could grow.
The way I see it, history will be on John Chen’s side. The BlackBerry CEO made the hard decision just in time.
BlackBerry’s QNX is now being adopted in a number of markets where Android and iOS remain alienated. From cars to medical equipment, consumer appliances, and traffic signals, QNX is gradually taking over the “Internet of Things” (IoT) industry.
In case you haven’t been following, IoT is a growing phenomenon of machine-to-machine interconnectivity.
This week, BlackBerry’s subsidiary, QNX, launched a new one-stop solution for the IoT industry. QNX now offers an operating system that integrates the latest and fastest Bluetooth connectivity specifications.
The solution includes a QNX software development kit (SDK) that makes it easy for developers to create connected embedded systems for machines. These machines can vary from industrial automated machines to factory equipment and even medical devices. (Source: “QNX Unveils New Bluetooth Solution for Embedded System Developers,” Yahoo! Finance, February 23, 2016.)
Bear in mind that this connectivity solution comes with the added advantage of QNX’s security. Unlike the more ubiquitous but less secure Android OS, BlackBerry’s OS is a one-of-a-kind secure platform.
In fact, BlackBerry has already won a contract following the launch of its new OS and SDK. The leader in traffic systems and solutions, SWARCO Worldwide has chosen QNX to power its most famous lineup of traffic light signals and controllers.
SWARCO’s demand was for an operating system that could offer high software security with a 24/7 run-time. BlackBerry’s QNX easily passed both tests. (Source: “SWARCO TRAFFIC SYSTEMS Gives the Green Light to QNX,” Yahoo! Finance, February 23, 2016.)
And there’s more…
You’ll be surprised to know that QNX also powers car infotainment systems for all major automakers worldwide, including BMW, Mercedes-Benz, Ford, General Motors, Audi, Toyota, Hyundai, and Honda. This means that BlackBerry’s OS runs everything from car computers to WiFi, audio, and video entertainment and device connectivity in your car.
Taking it to the next level, BlackBerry’s QNX subsidiary has now recently partnered with Luxoft Holding and Ford to power semi-autonomous driving features in cars (otherwise considered self-driving technology).
It seems like QNX is quietly expanding its control. The BlackBerry ecosystem may not include a smartphone, but it may include every other device we use daily.
The Bottom Line on BBRY Stock
BlackBerry’s QNX has taken the market by surprise. The software side of BlackBerry’s business has managed to deliver robust triple-digit year-over-year revenue growth of 183% in the last quarter. The segment has grown from only 15% of its revenue mix to about 29% in just six months.
And this growth story is just beginning…
All these latest software bets in the IoT industry make me more than hopeful of a turnaround in BlackBerry this year. Holders of BBRY stock may want to seriously consider staying put and have faith in BlackBerry CEO John Chen.