After The Wall Street Journal published an advertorial by an Amazon (NASDAQ:AMZN) executive explaining the company’s strategy for connected cars, I’m extremely confident that BlackBerry (NYSE:BB) stock will benefit tremendously from its partnership with Amazon.
Amazon and BlackBerry are partnering to develop IVY, which is essentially an app store for connected vehicles.
BlackBerry CEO John Chen has said that a beta version of IVY is slated to be available in October.
The post by the Amazon executive, Bill Foy, Amazon Web Services’ Director, Worldwide Automotive Business Development, made me much more bullish on IVY and BB stock for two main reasons.
First, the column shows that Amazon is excited about the initiative and is prioritizing it. Second, it suggests that the opportunity presented by IVY is even bigger than I had anticipated.
Amazon Is Upbeat on IVY and Is Giving It High Priority
The fact that Amazon took the time to write the advertisement and paid The Wall Street Journal to publish it indicates that it’s excited about its partnership with BlackBerry and is giving IVY high priority.
In the piece, Foy claimed that as vehicle companies made better use of cloud technology, smart cars could soon have as many features and feature possibilities as phones have today.
The fact that Foy called connected cars “sophisticated computers on wheels” and gushed that smart cars are becoming as “feature-rich” as smartphones suggests that Amazon is sure that it can sell a huge number of apps through the connected car-app store that it’s developing with BlackBerry.
After all, apps are a big part of smartphones’ features, and because no company likes to lose credibility, I do not believe that Amazon would raise expectations for IVY in such a manner unless it was confident that the app store would be very successful.
Also noteworthy is the fact that this column appeared shortly after Andy Jassy became Amazon’s new CEO. The timing may indicate that IVY is a top priority for Jassy and that he is very bullish on it.
Of course, if Amazon highly prioritizes IVY, the company is more likely to pour significant resources into the project, making it much more likely to succeed.
A Massive Opportunity
Previously, I had expected BlackBerry and Amazon to be able to offer a few dozen apps, but Foy’s statement comparing smart cars and smartphones suggests that the number is likely to be in the hundreds now and in the thousands in the not-too-distant future.
What’s more, Foy said that data gathered by apps could be used to “make automated adjustments in real time” in vehicles.
Although I believed as long ago as 2017 that BlackBerry could make a great deal of money through apps marketed via its QNX operating system, up until now I did not anticipate that apps could be used to automatically adjust so many systems within vehicles.
I think that such apps would be very appealing to many vehicle owners.
The Bottom Line on BB Stock
Within a year or two, the auto app store could easily boost Blackberry’s annual top and bottom lines by $300 million to $500 million, making BB stock very attractive for long-term investors.
On the date of publication, Larry Ramer did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.