B
lockbuster, Borders, Brookstone, BlackBerry —
one of these things is not like the others. What
once was a household tech name is now a memory
of the past. But while BlackBerry is no longer considered a
competitor to moguls Apple and Samsung, it has moved on
to a new audience: the automotive industry.
Ten years ago, cell phone users nationwide were typing
away on their mobile devices with a physical QWERTY
keyboard. In fact, BlackBerry held roughly 20 percent of
the smartphone operating system market share. It built its
own operating system from scratch, and made the unique
decision not to have it be open source — unlike that of
Android, which briefly became a security nightmare. For
this very reason, BlackBerry was picked up by businesses
and governments worldwide. But despite its recent switch
to an Android-based operating system, it prides itself on a
value proposition of security — to the point of former Pres-
ident Barack Obama being permitted to use his BlackBerry
throughout both his terms, and El Chapo’s reliance on the
mobile device to conduct his high-stakes activities.
But while blackberry jam reigns as a top-five preserves
flavor in the U.S., BlackBerry is taking strides to preserve
itself. Pick any lens, and it will show BlackBerry on an
inverse hockey stick. Market share? Revenue? Shipments?
All of the above reveal a steep decline. But while many
write BlackBerry off as the next company to file for Chap-
ter 11 bankruptcy, CEO John Chen begs to differ.
After arriving far too late
to the touchscreen party, the
company marked its turn-
ing point in 2016 with an
exit from making its own cell
phones, now relying on Indo-
nesian partners for manu-
facturing the smaller mobile
phone business segment. In
2017, BlackBerry saw a $940
million dollar windfall after
winning a lawsuit against
chip
manufacturer
Qual-
comm for overcharging on
royalties. With this momen-
tum,
BlackBerry
followed
behind IBM, Microsoft and
others in pursuit of a critical
pivot: from hardware to soft-
ware. The difference? Chen
took BlackBerry’s superior
positioning in security from
its cellphone heyday, and saw
an alluring opportunity in
auto.
Thus was born BlackBerry
Technology Solutions. With
a dire need to innovate in
high-margin and emerging
business areas, BlackBerry
created BTS, which is upheld by 3 main pillars: QNX licens-
ing, Radar asset tracking, and Jarvis code scanning. This
all is to maintain its edge on cybersecurity, radar tracking,
and the automotive industry in the race to driverless cars.
But what does that really mean?
In 2010, BlackBerry acquired QNX Software Systems to
improve its operating systems. QNX was implemented in
the BlackBerry PlayBook tablet in 2011 and in the Black-
Berry 10 in 2013, and picked up by numerous car compa-
nies soon thereafter. In fact, in 2018, it was found that 125
million vehicles now use QNX technology for car infotain-
ment, competing directly against Microsoft’s Windows
Embedded Automotive.
But what exactly is car infotainment? Your radio, USB
and phone connectivity, rear parking assistance, hands-
free Bluetooth capability, navigation system and fuel sen-
sors are all powered by car infotainment software. QNX
is also being used to improve software for autonomous
cars. It can handle complex code needed to help driver-
less cars absorb data, and help a car’s software prioritize
functions based on its environment and decision-making.
While QNX doesn’t get in front of many people through
the BlackBerry cell phone, drivers of BMW, Ford, General
Motors and other car companies use QNX without even
knowing it. In fact, just over a year ago, Chen announced
that BlackBerry software powers 60 percent of connected
cars on the road today.
The second pillar of BTS is BlackBerry Radar, which
provides real-time data for the trucking industry, with
the ability to track assets and manage fleets through dash-
boards for management. Radar is one example of the firm’s
greater “internet of things” mission to combine real-time
data with everyday objects. Investors’ biggest concern?
BlackBerry management has been concealing Radar’s rev-
enue performance for two quarters now.
BlackBerry Jarvis, the third prominent asset of BTS,
was released just over a year ago to fortify self-driving car
software in order to prevent hackers from finding soft-
ware vulnerabilities. Today, a majority of a car’s typical
functions are controlled by software, from adaptive cruise
control to anti-lock brakes, to the sensors that flash when
you are near other cars. A hacker being able to manipulate
these functions could mean the difference between safety
and a major car accident. With dozens of industry players
racing to achieve the first self-driving car, cybersecurity is
on the mind for most automakers. As Chen envisioned, this
is Jarvis’ sweet spot.
These components are the pillars of BTS, but it is impor-
tant to remember that there is more to BlackBerry than
just BTS. In fact, the division is only the third largest reve-
nue driver of the firm. While BlackBerry’s company vision
resides within BTS, there is significant room for improve-
ment from a financial standpoint. However, it is headed in
the right direction. In the last fiscal quarter, Chen stated
that BTS revenue grew 23 percent over the last year, and
QNX is taking the lead on this growth.
While BTS is functioning proof of BlackBerry’s new
vested interest in automotive cybersecurity, its recent
acquisition of cybersecurity firm Cylance for $1.4 billion is
perhaps the most compelling stage of its blueprint. While
it is a pricey one, the acquisition is said to rapidly grow
the QNX arm of BTS, and perhaps initiate a cybersecurity
consulting division, which Cylance originally offered as a
standalone entity.
Interestingly enough, the market did not react sig-
nificantly to the acquisition announcement three months
ago. In fact, many Wall Street analysts’ price target for
BlackBerry remained unchanged. Investors are evidently
approaching BlackBerry’s transformation with caution,
which is understandable considering the company’s rela-
tively horizontal share price movement, and slow-mov-
ing pivot from its cellphone-associated brand to the auto
industry.
Just last Thursday, BlackBerry announced that it had
officially completed the acquisition of Cylance. As with
any acquisition of a large firm, it will take a sizable amount
of time before investors get to see tangible results. Until
then, BlackBerry’s Enterprise Software, licensing and its
44,000 patents will take lead on keeping the company
afloat.
While BlackBerry is by no means a company at the fore-
front of tech news today, it is far from having its epitaph
written maybe because people don’t write their own epi-
taphs.
Wednesday, February 27, 2019 // The Statement
2B
BY ROMY SHARMA, STATEMENT COLUMNIST
BlackBerry isn’t dead
Managing Statement Editor
Andrea Pérez Balderrama
Deputy Editors
Matthew Harmon
Shannon Ors
Designers
Liz Bigham
Kate Glad
Copy Editors
Miriam Francisco
Madeline Turner
Photo Editor
Annie Klusendorf
Editor in Chief
Maya Goldman
Managing Editor
Finntan Storer
statement
THE MICHIGAN DAILY | FEBRUARY 20, 2019
ILLUSTRATION BY NOLAN FELICIDARIO