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Blackberry Idea Proposal (BBRY)

Blackberry Idea Proposal (BBRY)
 

Will Blackberry’s QNX auto software and Radar truck tracking system return the company to its glory days?

 

Report Available: August23, 2017

 

Blueshift’s initial research found BBRY struggling as handset revenues decline and it focuses on its software business. There is a lot of optimism around the chances for its QNX software to play a leading role in the future of connected cars but there are major obstacles to revenue growth, including competition from auto OEMs themselves. BBRY’s Radar system that helps trucking companies manage their fleets could also be a winner.

 

Observations

  1. BBRY continues to have its ups and downs as the once-leading maker of mobile phones transitions to software and services. The company’s fiscal Q1 revenues missed analyst expectations after an unexpected drop in software sales, but executives forecast a stronger second half that they said will help the company meet its guidance of double-digit growth in software revenue.
  2. The most promising opportunities for BBRY may be in vehicles. Its QNX software, already a leader as the backbone of auto infotainment systems, is vying for a key role in other aspects of the connected car, such as advanced driver assistance systems and eventually as an important piece of self-driving cars. The company estimatesthat the $30 billion market for automotive technology servicescould grow by 30% a year over the next 15 years.
  3. Despite QNX’s partnerships with car makers like F and an installed base estimated at 60 million vehicles, its path to revenue growth in the connected car market is fraught with risks. As the value of auto software is rising, every major car maker is trying to develop its own operating system with differentiating features. At the same time, deep-pocketed behemoths like GOOG and AAPL are vying for a lead role in the car of the future.
  4. BBRY’s Radar, a system for trucking companies to track their fleets, appears to have some promise. The company said FedEx will be using Radar for its custom critical services, a small subset of the delivery firm’s global operations. Last year, BBRY won a contract with Trailer Wizards, Canada’s largest commercial trailer rental company. Radar requires deployment of a sensor and a monthly service fee.

 

Will QNX carve out a leading role in connected and self-driving cars? How can QNX gain share over internal auto OEM efforts and competitors like AAPL and GOOG? What trends are expected in QNX’s dollar content per car? What role will partnerships with NVDA play in determining the winners and losers? How big an opportunity is BBRY’s Radar? To answer these and other questions, Blueshift will gather data and issue a market research report from independent sources in the following areas: Auto makers, Auto software developers, Connected car hardware suppliers, Trucking companies, and Industry specialists.

 

Companies: Blackberry Ltd. (BBRY), Alphabet Inc. (GOOG), Apple Inc. (AAPL), Microsoft Corp. (MSFT), NVIDIA Corp. (NVDA)

 

Research Begins: August 7, 2017