'BlackBerry Tablet' Looms From One of Firm's Licensed Device Makers, Says CEO
Having landed three deals licensing the BlackBerry brand and intellectual property to smartphones shipped by other companies, including the agreement with TCL covering all major global markets (see 1612200062), BlackBerry is “now expanding to the next phase of our licensing program” that will “focus on a broader set of end points,” CEO John Chen said on a Friday earnings call. “What this might mean -- and I make no promise -- is that you may soon see a BlackBerry tablet.”
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Under the expanded licensing program, “these end points will run our software security features” and will be co-branded BlackBerry Secure, Chen said. Later on the call, Chen said he was prompted by staff to clarify and emphasize that the tablet introduction he referenced “absolutely” did not mean the company would return to the hardware business it abandoned in September to pursue a royalty-bearing model that licenses use of the BlackBerry brand and IP to other device makers (see 1609280006). “I’m not building any hardware,” except for the radar devices BlackBerry supplies to the owner of a fleet of tractor-trailers in Canada, Chen said.
One of BlackBerry’s hardware licensees “is very excited to build a tablet based on Android, and they wanted us to give them the portfolio rights to do that,” Chen said. “I’m interested in that because I’m going to get royalties for every piece of tablet they ship." But before the tablet can progress to the next stage of commercial reality, "we have to QA it, we have to do a lot of things with it, so it’s not a 100 percent-committed thing," Chen said of the quality assurance process. "But it’s going to come from our partners,” not from BlackBerry itself, he said. He didn't identify the licensee that’s weighing the possible tablet introduction.
BlackBerry has signed on 62 partner companies for beta-testing the QNX 7.0 connected-car operating system software it demonstrated at CES, said Chen. BlackBerry also used CES to demo a prototype of a “vehicle-management portal” designed to protect connected cars from cyberattacks, he said. With more than “100 million lines of software code in some of today’s vehicles, there’s a growing risk of security breaches and failures,” he said. In demonstrating the portal, “we received extremely positive feedback from CES attendees, and we expect to launch this offering” later in 2017 or in early 2018, he said.
Asked what market share BlackBerry realistically thinks it can attain for ONX in connected and autonomous cars in the next three years, Chen replied: “Infotainment, we own over half the market today, 60 million cars. So I hope that that would give us some leverage.” BlackBerry’s market dominance with QNX in car infotainment systems was its rationale for launching its new Ottawa innovation center late in 2016 for developing software for autonomous and connected cars based on QNX, he said (see 1612200062).
Using the Ottawa center, “we want to attract partners to build applications on our platform,” Chen said. “People often ask me whether I’m going to build an autonomous car,” he said. “No, I’m not building an autonomous car.” He doesn’t want to “compete with my customers” in the automotive space, “nor do I want to compete with very, very big names who want to spend hundreds of millions of dollars” in autonomous-driving development, he said. “I am building the components that enable other people to build the autonomous car.”