BlackBerry focuses on software and services
BlackBerry (BB) exited the smartphone manufacturing business in late 2016 when it failed to keep up with competition from Apple and Samsung (SSNLF). BlackBerry lost the smartphone race to these technology giants while BlackBerry Messenger was replaced by Facebook’s (FB) WhatsApp.
BlackBerry sales have fallen ~90% since fiscal 2013 when it reported revenue of $11 billion. BlackBerry then decided to pivot and license its smartphone manufacturing business to third-party manufacturers.
BlackBerry then began focusing on its high margin Software and Services business. Although its revenue hasn’t stabilized, BlackBerry is confident about improving its profit margins.
BlackBerry Technology Solutions includes embedded software and asset tracking. It has had revenue growth of 31%, driven by its QNX software embedded and connected in autonomous cars.
QNX software is now embedded in ~120 million vehicles, up from 60 million in June 2015. QNX continues to gain traction, winning deals with Denso and Byton. Byton is China’s (FXI) electric car start-up and is focusing on global expansion. China is also the fastest-growing electric car market globally.