BlackBerry Hopes to Draw Autonomous-Car Revenue ‘Sooner than 2019,’ Says CEO
It's a "pretty good bet" BlackBerry will begin deriving revenue in 2019 or 2020 from software developed in its new Ottawa innovation center for autonomous vehicles based on its QNX connected-car platform, CEO John Chen said on a Tuesday earnings call. “But I’m hoping we’ll get something more in 2018,” he said. The 2019-2020 period is when Mobileye and other components suppliers in the autonomous-vehicle space have said their products will begin reaching the commercial market (see 1611150018).
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One of the innovation center’s first projects will be supporting the Canadian government’s “pilot program” to test autonomous vehicles on Ontario roads, BlackBerry said in a Monday announcement. “The whole autonomous driving effort is really to highlight our technology,” Chen said on the call of QNX, which he said BlackBerry plans to showcase at CES in demonstrations of three connected concept cars.
BlackBerry has “a bunch of services and software products that we’re working on that we would like to provide to all the automotive customers around the world,” Chen said. BlackBerry already developed “some prototypes that are pretty exciting,” he said. Chen hopes BlackBerry can begin drawing revenue from autonomous-vehicle software developed at the Ottawa center “sooner than 2019, but it will not be in 2017,” he said.
The royalty-bearing deal landing TCL as the second major smartphone maker to license the BlackBerry brand and intellectual property in consumer handsets “covers all the major global markets,” including TCL’s home territory of China, Chen said. The announcement in September of a first smartphone licensing deal with an Indonesian joint venture followed BlackBerry’s decision to stop developing its own consumer hardware (see 1609280006).
The breadth and scope of BlackBerry’s deal with TCL, one of the top 10 smartphone vendors in the world, means “we should benefit from TCL’s global scale,” Chen said. The new “licensing model” allows BlackBerry to “generate ongoing high-margin royalty revenue” based on the number of licensed BlackBerry-branded smartphone units sold, he said. Besides the deals already signed with TCL and the Indonesian joint ventures, “we have a pipeline of additional opportunities that we’re focusing on,” including talks with possible partners in India, he said.
In Q&A, Chen declined to discuss the royalty terms of the TCL and Indonesian license agreements, citing the confidentiality of “the contracts that we signed.” Chen doubts BlackBerry’s partners “would appreciate” any disclosures of the contract terms, he said. “Obviously, we like the numbers."