BlackBerry Stock: This Is the Next Big Thing for BlackBerry Ltd
Software systems aren’t as cool as shiny smartphones, but failing at the latter has left BlackBerry Ltd (NASDAQ:BBRY) stock in the doldrums. So, should you go ahead and delete BlackBerry stock from you watch list?
No, because of three letters—“QNX.”
This Could Be Huge for BlackBerry Stock
QNX is a real-time operating system (OS) developed by Canadian company QNX Software Systems, which was acquired by BlackBerry in 2010.
Those three letters might not mean that much to you right now, but note this: millions of cars on the road today have infotainment systems made by QNX. (“BlackBerry Pushes to Extend Software to Self-Driving Cars,” Bloomberg, last accessed March 7, 2016.)
So, QNX is a popular choice when it comes to powering in-car entertainment systems. But what really makes it special for BlackBerry is the major development in the automotive industry today—driverless cars.
To put it simply, BlackBerry QNX has created a software platform that automakers can use as a base for building their own self-driving systems. Other than traditional automakers, BlackBerry also wants to work with tech giants who are developing autonomous cars.
Back in December 2015, BlackBerry CEO John Chen said, “our software platform actually works with the Apple car strategy as well as Google.”
Chen’s comment might look arbitrary. But there is a chance that collaboration between BlackBerry and a tech giant can actually happen.
The Ottawa Business Journal reported that Apple Inc. (NASDAQ:AAPL) has rented 22,100 square feet of office space in the Kanata Research Park near Ottawa. (Source: “Apple to Open Facility in Kanata, Sources Say,” The Ottawa Business Journal, January 20, 2016.) Coincidentally (or not), Kanata is home to BlackBerry’s QNX Software Systems.
It’s not clear whether BlackBerry would actually be working with a company it once competed against in the smartphone business. However, given BlackBerry’s expertise in automotive software systems, there might be a reason why Apple is opening an office in Kanata.
The Bottom Line on BBRY Stock
While still making smartphones, BlackBerry should really be looked at as a software company, because that’s where there’s growth. In its last fiscal quarter, the company’s non-GAAP software and services revenue surged 183% year-over-year. Moreover, around 70% of the software revenue was recurring. (Source: “BlackBerry Reports 43% Year-over-Year Organic Growth in Software License Revenue for the Fiscal 2016 Third Quarter,” BlackBerry Ltd, last accessed March 7, 2016.)
The ongoing development in self-driving cars is a great opportunity for BlackBerry’s software systems. If QNX becomes the go-to choice for driverless car developers, BlackBerry could regain its presence in the tech world. And that would be a huge catalyst for BBRY stock.
