When I learned about BlackBerry's (NASDAQ:BBRY) acquisition of QNX in 2011, I was admittedly curious about who these folks were and how the BlackBerry 10 OS was "built on a QNX OS." What was it that Research in Motion, and at the time, Mike Lazaridis, saw in this developer of UNIX-esque operating systems? In recent interviews, Thorsten Heins (BBRY CEO) lauded QNX for providing the "embedded systems" behind rail trains, nuclear power plants, and medical devices. It turns out they also build the "infotainment" systems (including the UI, Navigation, Bluetooth connectivity, etc.) for over 20 million cars worldwide. Their customers include Acura, BMW, Audi, and believe it or not, Samsung.
Here is what BBRY had to say in its most recent annual report, about QNX and what they have in store (Page 17, second paragraph):
Leveraging and capitalizing on the embedded market. Over the past 30 years, QNX software has become a big part of everyday life, with people encountering QNX-controlled systems while driving, shopping, watching television, using the Internet, or even turning on a light. With its reliable characteristics, QNX software has been a preferred choice for life-critical systems such as air traffic control systems, surgical equipment, and nuclear power plants. The QNX powerful multimedia features can be found in a variety of products from in-dash radios and infotainment systems to casino gaming terminals. With mobile computing continuing to rapidly integrate with embedded operating systems, the Company plans to leverage its powerful BlackBerry 10 OS to provide even higher-performance applications for markets such as telecommunications, automotive, medical instrumentation, automation and security
At the BlackBerry Live Conference, a QNX-enabled Bentley Continental GT was revealed. The car's interface was powered by BB10 and QNX, and allowed for video conferencing directly from the center console.
On a day-to-day basis, BBRY trades (and most likely will continue to) on BB10 or BES winning contracts, rumors about stock outs at various locations, analysts making (mostly bearish) comments, but we have not seen very much on the sell side about this asset's long-term potential or monetization. And to the credit of BBRY detractors, even after substantially mining company filings and financial models, you can't find out how much revenue this asset produces.
On several occasions, journalists have thrown Thorsten curveballs (paraphrased, and emphasis mine):
JOURNALIST: "So, BBRY 10 is a Hail Mary pass that is do or die for the company, right?"
THORSTEN: "Actually, it's an important milestone, BUT it's not make or break for the company. We have developed a mobile computing platform, and it's based off of QNX."
Only time will tell if QNX, as a standalone asset, has the ability to be a substantial revenue producer. It appears that Thorsten Heins, in addition to his ability to run a tight ship, has a tendency to keep his cards close to the chest. I think shareholders should be optimistic about QNX's long-term prospects.
Heins's vision for a "mobile computing" experience is exciting, although ambiguous. It's hard to imagine what he has up his sleeve, but it appears this company is more innovative, entrepreneurial and aggressive than ever before.
Disclosure: I am long BBRY. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.