BlackBerry Q3 Preview: Focus On The Emerging Automotive Business

by Trefis Team
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BlackBerry (NYSE:BB) is expected to publish its Q3 fiscal 2019 results on December 20. While the company’s core enterprise mobility management business has stabilized, posting significant recurring revenues (81% as of Q2), we will be closely watching the progress of the Technology Solutions business, which has been witnessing strong growth driven by sales of QNX embedded software.

Our interactive dashboard analysis on What Will Drive BlackBerry’s Performance Over The Next Three Years outlines our expectations for BlackBerry in the near term.

Updates On The QNX Auto Business

BlackBerry’s Technology Solutions business saw revenue rise by 29% year-over-year during fiscal Q2, driven primarily by the QNX business. The company has been focusing on expanding the applications of QNX beyond the automotive infotainment market, focusing on Advanced Driver Assistance Systems (ADAS), which essentially help the driver in the driving process, and in other areas such as instrument cluster. BlackBerry has been working with both tier-1 suppliers and OEMs in this regard, and the shift could be very lucrative for the company. For instance, in the infotainment sector, the company is only estimated to charge between $1.50 to $5 per vehicle currently. In comparison, BlackBerry previously indicated that it could garner between $5 to as much as $25 per vehicle as it expands into more sophisticated auto technologies.

BlackBerry has been taking multiple steps to bolster the business. As of Q2, the company increased the number of qualified worldwide channel partners for QNX to 48, which represents a 20% increase from the start of the fiscal year. BlackBerry also indicated that it was going to step up its investments in the QNX space, recruiting more engineers across locations. We will be looking for updates on how this business is faring over the quarter.

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