It’s official – BlackBerry Ltd. (NASDAQ:BBRY) has inked an agreement with American multinational automaker Ford (NYSE:F) that allows the carmaker to expand its use of the Canadian company’s QNX and security software.
In 2013, BlackBerry entered a partnership with Panasonic in supplying infotainment software to carmakers in North America, Europe, and Japan. Then in 2014, the smartphone developer started working with Ford after the carmaker parted ways with Microsoft (NASDAQ:MSFT), the company that previously provided Ford with the software for its SYNC infotainment system. In fact, BlackBerry’s QNX operating system powers the SYNC-3 infotainment system that is currently installed in Ford vehicles. The agreement that was made public Monday afternoon officially puts BlackBerry into a “Tier One” supplier status which eliminates the need for any dealer, or in this case Panasonic, to mediate between Ford and QNX.
QNX is a software that is solely owned by BlackBerry. There are over 60 million vehicles worldwide that utilize the QNX software extending to 40 other automakers like Audi, Acura, BMW, Chrysler, General Motors, Honda, Hyundai, Mercedes-Benz, Toyota, Porsche, and Volkswagen. The deal with Ford is the first official agreement BlackBerry has made with a major carmaker, though it is still selling its technology to other auto suppliers.
What to expect under this new agreement?
BlackBerry will form a team of engineers based in Waterloo and Ottawa dedicated to QNX, which will work with Ford in expanding the company’s Neutrino industrial operating system. The team will also further enhance the QNX software in the areas of security and audio processing for the newer Ford models.
Under this new agreement, the products will include the QNX’s Hypervisor software, which authorizes multiple operating systems to run simultaneously on a single hardware platform. The QNX audio processing software and the Certicom security technology are included in the new agreement as well.
In a broader sense, Ford’s focal points in its new automobile software are in the connectivity capabilities and in-car data security.
Does this new deal include self-driving cars?
While the other terms of the agreement between BlackBerry and Ford remain confidential, it is safe to postulate that the deal will open more doors in BlackBerry’s ambitions of developing more advanced automobile software, case in point, self-driving software. Early this year, BlackBerry released a new QNX software platform with advanced driver-assisted systems and full self-driving apps. Then, in August, Ford announced its plans to mass produce fully autonomous self-driving SAE level-4 vehicles without steering wheel in 2021 for commercial ride-sharing purposes. Apart from the deal with BlackBerry, Ford is also collaborating with four tech start-ups skilled at autonomous vehicle development like 3D mapping and machine-learning technologies.
The deal between Ford and BlackBerry is crucial for the Ontario-based company’s initiatives of expanding its traditional mobile phone business to develop software products for automakers and other manufacturers. Despite a 2% price increase of BlackBerry shares following the announcement, the company’s stock continues to struggle. BBRY shares have declined 9.94% in the last 4 weeks and 9.13% in the past three months. Over the past 5 trading sessions the stock has lost 2.75%.
BlackBerry is down 5.73% year-over-year, compared with a 0.78% gain in the S&P 500. Since January 1 the stock has lost nearly 24 percent of its value.