BlackBerry Ltd (NASDAQ:BBRY) may be done with making smartphones, but the company is all in with the emerging technology of self-driving cars.
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On Monday, BlackBerry CEO John Chen was joined by Canadian Prime Minister Justin Trudeau in unveiling the BlackBerry QNX Autonomous Vehicle Innovation Centre in Ottawa, Canada.
BlackBerry stock rose 4% after the announcement before settling, but shares in the Canadian company are still at one-month highs.
What Is QNX?
You may not have heard of QNX before, but it’s been a major player in the automotive technology field for the past two decades. It develops embedded operating systems, and its software has been powering the infotainment systems in millions of cars — more than 60 million according to the company.
QNX was snapped up by BlackBerry in 2010, with the aim of using its expertise to develop an operating system for the PlayBook tablet. While BBRY’s tablet aspirations were quickly crushed, and its smartphone business died a slow death, QNX turned out to have been a prescient acquisition.
QNX and the Autonomous Connection
QNX was in the news in the fall when reports emerged that Apple Inc. (NASDAQ:AAPL) was poaching employees for a new automotive operating system team it had established near Ottawa — QNX’s home turf.
However, QNX itself has also been working toward software to power self-driving vehicles. In November, BlackBerry became one of three organizations granted a license to test self-driving cars on Ontario roads (and no, Apple was not one of the other two). Also in November, it announced a partnership with Ford Motor Company (NYSE:F) to use QNX software in that company’s plan to have fully autonomous cars on the road by 2021.
Yesterday’s announcement was the confirmation that BlackBerry is betting on self-driving cars as the future, and officially positioning QNX to take a leadership role.
The BlackBerry QNX Autonomous Vehicle Innovation Centre
BlackBerry held the formal press conference on Monday, taking the wraps off the new BlackBerry QNX Autonomous Vehicle Innovation Centre in Ottawa. It was a big enough deal that Canadian Prime Minster Justin Trudeau was part of the ceremony. According to BlackBerry, the new facility will:
“ … accelerate the realization of connected and self-driving vehicles by developing production-ready software independently and in collaboration with partners in the private and public sector. As part of this initiative, BlackBerry QNX plans to recruit and hire local software engineers to work on ongoing and emerging engineering projects for connected and autonomous cars.”
The company plans to invest $75 million U.S. in the new QNX facility and Chen told reporters that BlackBerry pans to hire as many as 600 engineers and software developers over the new few years. To put that number in perspective, QNX currently has roughly 400 employees.
While it was not explicitly mentioned, the presence and participation of the Prime Minister at the event implies at least the potential for Canadian federal government assistance.
Full Steam Ahead for BBRY Stock
BBRY stock is still down 20% compared to its starting point in 2016. That reflects a tough year, where the company was finally forced to say uncle on its smartphone business after mounting losses.
The move to leverage QNX’s position as an automotive technology mainstay to take a leadership role in the quest for a self-driving car is a bold one. But QNX has the chops, it has the auto industry relationships and it has government support in its quest to develop a self-driving car (through promotion and licensing, if not financial).
The question now is can BBRY stock deliver this time, and can it do so before a bigger rival — like Apple — beats it to the market?
As of this writing, Brad Moon did not hold a position in any of the aforementioned securities.
