Why BlackBerry’s Autonomous Driving Deal With Baidu Is Significant
BlackBerry (NYSE:BB) signed a deal with Chinese internet giant Baidu to jointly develop self-driving vehicle technology, in what is seen as a shot in the arm for BlackBerry’s automotive ambitions. BlackBerry’s stock rose by about 13% in Wednesday’s trading following the announcement. While BlackBerry has been partnering with several companies that intend to use QNX for their autonomous driving systems, the Baidu deal is notable as it could give the company greater traction in China, the world’s largest automotive market.
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Baidu’s Approach To Autonomous Cars Is Focused On Scale
Baidu, which is primarily known for its search engine, it is also a leader in the development of deep learning and artificial intelligence. The company is leveraging these strengths to create an open-source autonomous driving platform called Apollo, which it hopes will ensure more rapid development and higher proliferation of autonomous cars. With the BlackBerry deal, Baidu intends to use the QNX operating system as the foundation for its Apollo platform. The platform has been described as the Android of the automotive industry, as it is both modular as well as open source, allowing developers to pick and choose the features they want to use in their systems. Apollo has signed agreements with several large auto companies, including Ford, Hyundai and some Chinese automotive manufacturers. The platform has also attracted partnerships from Tier 1 suppliers, developer platforms, and technology startups. The two companies will also work together to integrate Baidu’s CarLife automotive system with its conversational AI system DuerOS, and high definition maps to run BlackBerry’s infotainment platform.
BlackBerry’s Automotive Ambitions
Software is playing an increasing role in automobiles, with software and electronics estimated to account for upwards of 30% of a modern automobile’s cost. The role of software in automobiles is likely to rise with the advent of autonomous driving systems, and BlackBerry has been looking for early market share gains by forging deals with the largest automotive industry chip suppliers, as well as partnerships with the top three tier-1 auto suppliers – Bosch, DENSO, and Magna. That said, competition is likely to remain strong in this nascent market, with companies ranging from silicon valley giants such as Apple (NASDAQ:AAPL) and Google (NASDAQ:GOOG) to automotive suppliers doubling down on the market. BlackBerry does bring a lot of strengths to the space given its expertise in security and communications technologies. Moreover, the company’s QNX software has been known to operate mission-critical applications such as medical devices, air traffic control, and control systems. This could give the company some competitive advantages over the long run.
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