Seeking Alpha
What is your profession? ×
Long/short equity, event-driven, research analyst, activist investor
Profile| Send Message|
( followers)

Well, it appears that our friends at BlackBerry (NASDAQ:BBRY) have been kicking butt behind the scenes, as expected. Last week, the company's BBM service received a good amount of the spotlight due to WhatsApp being in the news. This weekend, the good news looks like it's going to continue.

And, here's a niche that I bet you weren't even considering - vehicles. For a while, I've been writing about the ecosystem concept - how Apple is executing it, how Microsoft (NASDAQ:MSFT) is lagging behind but also trying, and most recently how Google (NASDAQ:GOOG)is also trying to get itself in your life using the same concept.

Now, you can throw BlackBerry's QNX into the mix.

Bloomberg reported:

Ford Motor Co. (NYSE:F), struggling with in-car technology flaws, will base the next-generation Sync system on BlackBerry Ltd.'s QNX and no longer use Microsoft Corp.'s Windows, according to people briefed on the matter.

Using QNX will be less expensive than licensing Microsoft technology and will improve the flexibility and speed of the next Sync system, said the people, who declined to be identified because the decision hasn't been made public. Ford has more than 7 million vehicles on the road with Sync using Microsoft voice-activated software to make mobile-phone calls and play music.

Chief Executive Officer Alan Mulally, who was said to be a candidate to become Microsoft's CEO until early this year, has seen Ford slump in surveys by J.D. Power & Associates and Consumer Reports, with customers citing malfunctioning technology systems and touch screens. The second-largest U.S. automaker has said the quality of its vehicles has been "mixed" each of the past three years and fell short of its plan to improve those results in 2013.

QNX is a Unix similar OS that was initially developed primarily for use in "embedded" systems. It's initial release was in 1982, and it had been developed by QNX Software until it was bought by BlackBerry in 2010. Shortly after being bought, BlackBerry released BlackBerry 10 and the PlayBook, both running QNX.

QNX can already be found in some Volkswagen (OTCQX:VLKAF), Audi (AUVDF), and BMW vehicles.

It's an OS that's been developed for 30+ years specifically with the purpose of being an "embedded" OS.

(click to enlarge)

It's definitely got a little more swagger than Sync. And, because QNX is compatible with basically everything, it's a great starting point for the software in vehicles.

Strictly from a consumer standpoint, as someone that is constantly renting Ford Fusions when I travel, I'm semi-familiar with Sync. And, while I use it and it gets the job done, do I think there's a chance to make it sleeker, quicker, and altogether a bit more aesthetically cleaner? Yes. That could just be the developer in me, but there's certainly room for opportunities. Like everything Microsoft has tried to do for the first time, Sync was anything but a grand slam.

From a shareholder standpoint, with BlackBerry being my largest position at the current moment, I like this news. It shows me that Chen and the boys are busy getting stuff done behind the scenes in between official disclosures.

BlackBerry isn't likely to make a ton of money off of this - as Sync was used by about 7 million people - but, it's both a tremendous vote of confidence in the BlackBerry name, and an entry into a niche market that hadn't really been considered for part of BlackBerry's turnaround (not by me, at least). The major value here isn't the money - it's the partnership, the name recognition, and a chance to peek their head in on the "ecosystem" of several million people - a proverbial peek outside of the rabbit hole for BlackBerry.

One of the "barriers to success" that I discussed about BlackBerry in my article "BlackBerry: Rebirth of the Original Gangster" was its tarnished name. BlackBerry's name ending 2013 was synonymous with failure. The name conjures up images of the dated technology that is no longer mainstream, nor available. For all intents and purposes, the BlackBerry name may need to change - again. It's been examined and looked at in several other articles so far in 2014: a name change makes sense. Or, instead of changing the name of the company, when BlackBerry decides to launch a new product the focus should be around branding of the product name as opposed to the BlackBerry name.

But, if BlackBerry can continue to lock up deals like this one with Ford, it's just going to be a matter of time before the negative sentiment surrounding the brand name begins to fade away. Then, momentum will really swing in the right direction for the company.

While there definitely remains risk, especially with people like Apple claiming to want to move into the vehicle space eventually, this is another small win for BBRY.

It's been a nice week for BlackBerry, Loeb taking a stake in the company and BBM getting into the spotlight due to WhatsApp, and now QNX making headlines. I look forward to hearing from John Chen in the near future, but for now - keep up the good work, John. BlackBerry is on its way to getting back in stride.

Disclosure: I am long BBRY, F. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.