The Internet of Things (IoT) is a growing sector that I am really interested in. Over the next 5-10 years, things that used to just sit there and do nothing will soon start to become communicating pieces of technology that create a network in your home. Your phone will be able to talk to your oven, which will be able to talk to your thermostat in the event that the house gets too warm while you’re cooking.

Further, you’ll be able to stay at home, take your blood pressure, and send the data to your doctor rather than going in for routine procedures. This data will help doctors remain informed about their patients.

There are many companies are hustling to get into this sector, but two that I am particularly intrigued by are BlackBerry Ltd.  (TSX:BB)(NASDAQ:BBRY) and Sierra Wireless Inc.  (TSX:SW)(NASDAQ:SWIR).


This company is a straight security play. At least, that’s how the company is going to position itself as it starts to ramp up its partnerships with companies. “We have a reputation for security,” I can hear one of their VPs of Strategy saying. And companies that are rolling out these connected devices will look at all the hacks that have been going on and agree.

BlackBerry also has its QNX operating system, which is likely going to be the operating system going forward for all IoT initiatives. Back in December, Ford dumped Microsoft’s Windows platform and started using QNX in its cars. The unspoken reason could be that QNX is more secure and the last thing you want is someone being able to hack your car while you’re driving.

We can already see that BlackBerry is not looking to own the entire market, but instead wants to be the secure software powering it. It may not take the entire market, but if the IoT is a $19 trillion market as one tech CEO said, BlackBerry could see a revival with this market.


Some argue that Sierra is the king of IoT. Sierra has staked its entire reputation on the IoT and it can be seen in the acquisitions it has made. Its portfolio of products includes wireless modules, modems, gateways, and cloud services that are all targeted toward machine-to-machine communication. All of these products facilitate the communication between your phone and thermostat.

One of the things that makes Sierra such a great company is that they know their specialty and they buy companies to support it. For example, it recently bought Wireless Maingate so that it could gain access to its managed M2M connectivity service.

Which should you buy?

Both companies are actually risky investments. BlackBerry is dealing with a turnaround that it is taking a long time to achieve. And Sierra Wireless is in a tailspin, with its stock price plummeting over the last six months. So, both stocks are actually risky investments. But if you believe in the IoT, they are both plays that could reward you nicely.

However, one other option is that they get acquired by a much larger company. There’s no doubt in my mind that more companies are going to want to get in on the IoT by buying smaller players that already have developed the technology. We’ve already seen rumours that BlackBerry is on the market again, so we’ll have to wait and see what happens.

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Fool contributor Jacob Donnelly has no position in any stocks mentioned. David Gardner owns shares of Ford and Sierra Wireless. The Motley Fool owns shares of Ford.