BlackBerry (NASDAQ:BBRY) introduced a comprehensive cloud based Internet of Things (IoT) platform earlier this week.  The term Internet of Things refers to the idea that everyday products such as home appliances and industrial equipment are connected to the Internet and are able to communicate with one another. While IoT has been a hot buzzword in the tech industry over the last few years, it has been gaining meaningful traction of late with most large technology companies announcing new product developments and deals. According to market research firm Gartner, the number of networked devices globally will rise from about 5 billion in 2015 to 25 billion by 2020. BlackBerry’s platform will build upon the Project Ion initiative that it launched last May, and will leverage technologies that have enabled the company to become a leader in the mobile data security and embedded systems industries. The solution will be initially targeted towards areas that manage highly mobile, high-value resources such as the shipping and automotive sectors. However, the company intends to eventually extend the platform into other areas including the smart energy sector and the healthcare field.
We have a $10 price estimate for BlackBerry, which is slightly below the current market price.
QNX Software, Secure Network Infrastructure Play A Key Role
BlackBerry appears to have the right combination of strengths to be successful in the IoT space. Firstly, the company has a robust operating system that can power networked devices, in the form of the QNX embedded systems software. QNX is known to power embedded systems in cars, industrial applications, medical devices and other mission critical applications (see A Look At BlackBerry’s QNX Business). Additionally, BlackBerry has its roots in the efficient and secure delivery of data, via the messaging and security functions of its secure global network infrastructure. According to BlackBerry, its IoT platform includes several features for device management, including application enablement, over-the-air software updating and log collection. The platform, which is modular and cloud-based, will allow customers to build IoT applications in a secure and scalable way.
We believe that BlackBerry’s strategy of beginning with the automotive and industrial sector is a step in the right direction, given that the company has strong credibility with enterprise customers. Additionally, businesses are likely to buy into the IoT trend sooner than customers, given the benefits of greater control, efficiency, data logging and analytics that the solution could provide. BlackBerry’s solid reputation for security could also provide a competitive advantage as security has been a concern in the IoT market, since the connectivity could give hackers opportunities to break into devices that have so far been isolated from the internet.
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- BlackBerry Unveils Cloud-based Internet of Things Platform, BlackBerry, January 2015 [↩]