BlackBerry Ltd. (TSX:BB)(NASDAQ:BBRY) hasn’t been a leader in the smartphone industry for years now, but investors are hoping the company’s plans to rebrand itself could pave the way for a profitable future.
The company no longer relies on its smartphone business to survive. BlackBerry is looking to keep up with the rest of the tech industry by joining the race to launch autonomous driving technology. With investments on artificial intelligence and advanced entertainment systems, the concept of a self-driving vehicle is to the future what smartphones once meant to society.
At the CES show earlier this month, the company announced plans to launch an advanced and secure software platform that would work with autonomous driving and connected cars. Its technology would essentially connect you to your vehicle the same way you are connected to a computer.
And despite no longer being a manufacturer of smartphones, BlackBerry devices will still exist.
The new company phone will be called the BlackBerry Mercury, but it isn’t actually being built by BlackBerry. It is the last phone that BlackBerry will design and engineer in house; a company called TCL is manufacturing the product. The company’s iconic QWERTY keyboard will likely still be available, along with HD display, a 4.5-inch screen, 32GB of storage and 3GB of RAM, according to rumours.
BlackBerry’s software push is what’s keeping it going, and the company is working on its own operating system (OS). While the Mercury will likely don Android, the phone will come equipped with its own security software.
However, the BB10 OS will still be in existence. Alex Thurber, senior vice president for global device sales at BlackBerry, said that BB10 is popular among certain markets, and the company may continue supporting and investing in the OS.
In regards to BlackBerry’s ambitions in the automotive industry, it’s worth considering that the company is still plugging along with the ownership of the QNX Operating System. By the end of 2014, more than 60 million vehicles were running on the platform, and more than 40 companies are using the software in their vehicles.
The technology is among the most advanced in the connected-car market, including infotainment, mapping and GPS technology, telematics and more. QNX has a market share amounting to roughly 47%. BlackBerry clarified that it is not in the business of building cars or hardware for vehicles but making an effective and smart software platform for cars that will work in unison with autonomous driving technology.
Third-quarter earnings were below expectations in the revenue category, but that fact only tells a small part of the story regarding BlackBerry’s software push. For the fiscal year 2016, the company recently raised its forecast to break even for the 12 months. The previous guidance projected a loss of five cents per share for the year.
A January 13 report stated BB stock should have an average price target of $10, with several firms such as TD Securities Inc rating the company a “Buy.” Between its progress and advancement in the automotive industry and its presence in software for smart devices, BlackBerry could see a profit in 2017 following the transition that 2016 brought with it.
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Fool contributor Karl Utermohlen has no position in any stocks mentioned.