BlackBerry Ltd.’s transformation from smartphone maker to software services provider is starting to take shape.
The company that once dominated the smartphone market is in the process of making some of its most popular software available on a variety of new platforms, including its messaging system on rival smartphones and its user interface technology on Ford’s in-car entertainment and information consoles.
On Monday, Bloomberg reported that Ford Motor Co., which currently uses a Microsoft Windows-based system called Sync in many of its vehicles, plans to switch to an operating system designed by BlackBerry subsidiary QNX. A number of other car manufacturers already use QNX-based systems in their vehicles, and the automotive industry represents a significant revenue source for the company. QNX has been one of BlackBerry’s most successful assets since the smartphone maker purchased it in 2010.
For BlackBerry, such a deal would prove a major win as the company struggles to reinvent itself from a mobile hardware maker to a service-oriented firm.
“If the Ford item is true, and imagining it’s a multiyear deal, that’s good news obviously, a recurring source of revenue,” said Kaan Yigit, president of Toronto-based Solutions Research Group. “But it’s a software deal and I don’t know what it would amount to in relative [dollar] terms so it’s hard to judge.”
Mr. Yigit said Ford’s move is illustrative of a wider trend among car companies to give up on proprietary user interfaces in their entertainment and information consoles, opting instead for more universal software designed by firms that specialize in such products.
Complaints among Ford drivers about the reliability of Sync indicate that the Ford system is among the worst, said Jake Fisher, director of automotive testing for Consumer Reports magazine.
“We’ve had issues of the system locking up, the screen going blank, a lot off issues,” Mr. Fisher said. “The problem with it is it’s not really just a radio; some of the primary functions of the vehicle are there. The climate control is built into the system. If you lose function of that, you’ve lost quite a bit of function.”
He noted that Audi AG and BMW AG use QNX as their operating system and the magazine’s survey shows those two luxury auto brands have been relatively trouble-free.
Consulting firm J.D. Power and Associates, which surveys new car owners every year for its initial quality study, found last year that problems with such electronics systems as navigation, Bluetooth connections for cellphones and other technology issues dominated the complaints among new owners of all brands.
Ford ranked near the bottom of the survey last year, with owners of Ford vehicles reporting 131 problems, compared with the industry average of 113.
A Ford spokesperson declined to comment on the BlackBerry deal, saying: “Ford works with a variety of partners and suppliers to develop and continuously improve our in-car connectivity systems for customers. We do not discuss details of our work with others or speculate on future products for competitive reasons.”
A BlackBerry spokesperson did not respond to a request for comment.
News of the Ford deal comes as BlackBerry expands its software offerings on an entirely different front. The company will make its popular BlackBerry Messenger chat software available on Windows-based phones and on upcoming devices from one-time top rival Nokia. The move echoes a similar one that recently saw BlackBerry release BBM – once exclusive to the company’s own smartphones – for smartphones running on Apple and Google software.
Even as its smartphone sales drop, BlackBerry’s BBM software has done fairly well, racking up some 80 million users. Last week, the company saw its stock price increase slightly after a similar (albeit far more popular) messaging tool called WhatsApp was purchased by Facebook for a whopping $19-billion (U.S.).
But as with the Ford deal, the BBM service expansion may signal a change in BlackBerry’s corporate direction, but still offers no guarantees that the change will result in a return to large-scale profitability.
“It’s nice to say we will be a services company,” Mr. Yigit said. “But that will be a fraction of the overall business that’s eroding, the way I see it at the moment.”
|BB-T BlackBerry Limited||7.85||
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|F-N Ford Motor||16.07||
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|BBRY-Q BlackBerry Limited||7.15||
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