BlackBerry's path from smartphone roadkill to smart car pioneer — with a brief detour into meme stock
Company best known for obsolete smartphones now has its technology installed in almost 200 million cars
The obituary for BlackBerry as a smartphone pioneer has been written countless times before. But after pivoting its business away from devices and toward the software that powers them, reports of the company's death are proving to be premature.
BlackBerry's QNX software, which tracks real-time data for features like Google maps, GPS navigation, traffic monitoring and infotainment systems, is already embedded in millions of cars on the road today.
And the company recently partnered with Amazon to create BlackBerry Ivy, a new cloud-based platform that takes things a step further into the realm of self-driving technology, collecting real-time data and making on-the-fly recommendations for everything from dangerous road conditions to the location of the nearest electric charging or gas stations.
"You can look at things like traffic congestion or offering new services to your customers, like being able to recommend where there's an open parking space, based on where you're at," is how Sarah Tatsis, who heads up the program at BlackBerry, describes it.
Pinning hopes to an automotive future
The company has high hopes for the technology, but acknowledged it's not perfect in a news release last week. In a blow to its stellar reputation for security, BlackBerry revealed that it had found a potential vulnerability in versions of QNX that came out prior to 2012.
While versions since then aren't impacted and the company said it's "not aware of any exploitation of this vulnerability," it underscores just how important BlackBerry thinks the automotive industry is to its future.
While few drivers are likely aware of it, QNX is already installed in 195 million vehicles on the road today. That's almost 100 times the number of vehicles Tesla has out there, providing similar data points to learn from and giving Canada's fallen tech giant a leg up in the self-driving space.
"It's a big advantage for BlackBerry to already be in close to 200 million smart vehicles right now," independent technology journalist Pascal Forget said in an interview with CBC News.
"They have much more data points, much more data that they can use to improve their systems compared to Tesla."
Forget says he doubts that being just one component under the hood of every smart car on the road is enough to bring the company back to its glory days, but he says it could at least mean a new lease on life.
Bumpy road back
CEO John Chen has helmed BlackBerry for eight years now, and his mission since day one has been to do exactly what they're doing now: pivot away from the lost battle of handsets and toward the software that powers the gadgets of tomorrow.
That path has been a painful one, with several rounds of major layoffs that hit hard in the technology hub of Kitchener and Waterloo, Ont.
"It was definitely a challenging time and there was a lot of worry locally," says Mike Kirkup, the company's former head of developer relations.
While BlackBerry was losing people, Kirkup says there was a concerted effort to retain a lot of the company's talent in the region. Because even as it was dying in smartphones, the company was giving birth to the next generation of high-flying tech stars.
Many ex-BlackBerry people went on to build their own startups, while others helped take existing tech companies to the next level.
The digital investigation company Magnet Forensics, for instance, mostly consists of former BlackBerry employees in its executive team, including CEO Adam Belsher and chairman Jim Balsillie, who cofounded BlackBerry with Mike Lazaridis in the early 1990s when it was known as Research in Motion.
Magnet Forensics, which helps law enforcement agencies fight cybercrime, went public in May with an IPO on the Toronto Stock Exchange that raised $115 million. Barely three months later, those shares have already tripled in value.
"I think that's the understated or underrepresented story of the impact of what all those BlackBerry people are doing now: they're scaling the next generation of companies with a level of experience and global knowledge that very few people would've had before," Kirkup said.
Meme stock treatment
While the name doesn't have the cachet it once did, BlackBerry's penchant for having world-leading tech was a factor in shares of the company going on a run earlier this year.
The stock price hit a nine-year high in January after news of the smart-car deal with Amazon landed, but a lot of the hype came from BlackBerry's sudden status as a "meme stock" — a company retail investors pile money into, often confounding analysts who have a more intimate knowledge of the company's financial prospects.
Robert Tétrault, portfolio manager at Canaccord Genuity in Winnipeg, says BlackBerry owes its run to the "GameStop phenomenon," where online investor forums would co-ordinate to drive trades and pump up the value of certain stocks.
"It was all about sticking it to the institutions, sticking it to Wall Street. And pumping up a stock that they believed could grow."
While that rally mostly fizzled, BlackBerry's brief time as a meme stock speaks to how investors think the company has some valuable tech under the hood.
Regardless of that hype, turning high-tech driving software into actual profits will be where the rubber meets the road for the company.
"Redditors are focused on the next big thing and earnings are less important. But at the end of the day, a stock will be a reflection of its potential future earnings regardless of what happens online," Tétrault said.
Corrections
- A previous version of this story referred to Magnet Forensics as a data surveillance company. In fact, Magnet Forensics develops software to help investigate cyberattacks and digital crimes.Aug 22, 2021 5:20 PM ET
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