Accept it. BlackBerry Ltd. (TSX:BB)(Nasdaq:BBRY) is going nowhere. CEO John Chen has turned the company around and while it is not reporting insane numbers, the fact remains that BlackBerry is sticking around.
Now that we have that out of the way, let’s talk about an industry where BlackBerry is not only going to survive, but actually thrive and potentially lead if all goes according to plan. This industry will one day make you forget about BlackBerry’s fall from grace and instead, make you appreciate its rise to dominance.
Internet of Things
The Internet of Things (IoT) is going to be a $19 trillion market if the CEO of Cisco is to be believed. And if you ask me, if one of the largest networking companies in the world sees a trend toward everything being connected, then I’m inclined to believe him.
IoT basically means that everyday devices—refrigerators, washing machines, cars, thermostats, etc.—will one day, if they are not already, be connected to the Internet. Once those devices are connected, users will be able to interact with them via their mobile device, rather than just manually.
The way BlackBerry factors into all of this is it has the operation system that many in the IoT world are thinking of building on. QNX is a Unix-based operating system that is one of the most secure pieces of software in the business. Because of how secure and flexible it is, Ford is planning on using it for its cars, replacing software from Microsoft.
What’s even more exciting is just how large the market is. A $19 trillion market is predicated based on 50 billion devices being connected to the Internet by 2020. The makers of those products are going to have a few choices. They could try to use one of the current mobile operating systems, modify it, and try to deploy that, but the security holes would be extreme. They could create their own operating system, but that is an expensive endeavor. Finally, they could pay a small per-device licensing fee to BlackBerry.
That’s where BlackBerry is going to make a considerable amount of money. By licensing its secure software to all of these different companies, the company as it is currently known will change. Where once it was known as a mobile phone company that failed to iterate, it will soon be known as the software provider that powers the Internet of Things.
Because of this, I really believe that you should consider adding BlackBerry to your portfolio. It will take time, but I believe it will become a $25 stock as the IoT takes off.
This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.