As the company prepares to split itself in half, let’s cast the hypothetical sequel to the BlackBerry movie.
Personally, I’d like to see “Succession” actor Kieran Culkin’s take on Elon Musk. Other key players: A car guy with an intense edge, Ford CEO Jim Farley (perhaps played by Mark Ruffalo); disciplined and frank-speaking Stellantis CEO Carlos Tavares (my pick is Daniel Craig); and the cerebral beancounter-turned-most-powerful-executive-on-earth, Amazon CEO Andy Jassy (I’m torn between Edward Norton and Matthew Macfadyen).
To put a finer point on it, a smaller BlackBerry is about to go head to head with an ensemble cast of boldface names as it spins off its automotive software unit from its cybersecurity business, a new chapter it has dubbed “Project Imperium.” Now that its auto business is in the spotlight, it must show it can turn software-hungry automakers and tech giants into customers—or risk being overshadowed once again.
The opening scene: BlackBerry is hoping to ring the bell on Wall Street with a public offering for its Internet-of-Things division, which includes automotive-software operating systems QNX and Ivy. QNX powers critical systems like airbag deployment, brakes, displays and EV battery voltage, while Ivy is stacked on top, sending data back and forth to Amazon’s cloud for features like toll payments or personalized cabin temperature settings.
Analysts seem to believe that the cybersecurity business may attract takeover interest—but the auto business is the potential juggernaut.
RBC analyst Paul Treiber estimates the IoT division is worth US$1.7 billion and the cybersecurity division is worth about US$450 million. Baird senior research analyst Luke Junk wrote that investors seem to favour BlackBerry’s “leading” auto-software market position, estimating it has a 26 per cent market share.
“We expect the IoT business to be an attractive standalone investment after an IPO, especially with strong automaker relationships and a marquee agreement with Amazon for its Ivy product,” wrote Morningstar analyst William Kerwin.
“We think the larger and relatively worse-performing cybersecurity segment has weighed on BlackBerry’s overall valuation … a standalone cybersecurity business may be an attractive buyout candidate.”
The second act: The iconic smartphone maker wants a second shot at building the app store, but winning drivers’ hearts won’t be easy, as the auto market heads toward peak complexity: Car buyers are faced with more choices than ever, between EVs or gas vehicles; Android or Apple infotainment systems; various charger ports and apps. Drivers’ satisfaction with their vehicles has dropped for the first time in 28 years, mainly due to glitchy software.
“Growth in the automotive market is dependent on upselling to new services,” wrote Todd Coupland and Valery Heckel in a CIBC research note about BlackBerry’s split.
The loyal sidekicks: BlackBerry’s auto business has some heavyweights in its corner, namely Amazon Web Services, which works with companies like Rivian and Lyft. BlackBerry supports Google’s Android Automotive OS, is helping to build VW’s CARIAD system, and underpins a Foxconn-led consortium that’s creating an EV platform.
The potential rivals: After Tesla pioneered proprietary software, automakers like Ford are trying to beef up their own tech teams. Some are partnering with tech companies like BlackBerry.
Others have in-house teams that are veering closer to BlackBerry’s turf. Stellantis, like BlackBerry, is creating platforms for software developers and building services like payment platforms.
The potential plot twist: We have one important blank casting card and a potential “Succession” subplot. BlackBerry CEO John Chen, who in his decade at the wheel has overseen QNX’s expansion from 16 million vehicles to over 235 million, ends his term next month.
Watch it live: BlackBerry is hosting a call this Tuesday, Oct. 17 at 1 p.m. ET to discuss its future. Make some popcorn.
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