2016 will be a year BlackBerry will be glad to look back on. It will likely do so with some pride because this was the year that BlackBerry completed its transition and finally became the software and services company it has been transitioning into. Currently reporting growth in this new segment of 30 percent and Gross Margins in the 70 percent range, this is the kind of transition Sun Microsystems had hoped, but failed, to achieve and the one that HP, now HPE, attempted and failed with— showcasing that this is anything but easy.
Let’s talk about the autonomous car opportunity and why it is just a small piece of a much larger emerging market of increasingly smart tools.
Currently, this technology is in test all over the world with each of the major car makers, Uber, and technology companies like NVIDIA and Intel working in this space. The reason the car companies are in this is clear because this feature represents a change in line with the development of the internal combustion engine in terms of its capability to massively change the car market. For instance, Uber’s very aggressive plan is to use its service and automated cars to remove the incentives surrounding car ownership. In Uber’s planned future we don’t own cars, we have a car service that picks us up and drops us off wherever we want to go. Cars are then kept in holding areas charging for when they may be needed, and the experience is more like that in an elevator in terms of automation, safety and overall experience than in a car. To give you an idea of what that car might look like, Harmon and Rinspeed created the Oasis, and it is a strong representation of what a future autonomous car from Uber might look like, but without a steering wheel.
But it’s not just cars that are getting this technology; in rural areas they are working on people-carrying drones, which are under test in Nevada. These could eventually make expanding roads unnecessary and make traffic, as we now know it, a thing of the past. This just showcases how fast this technology is moving; we don’t even have autonomous cars on the road outside of tests and already we are into testing for autonomous planes, which would likely use the same flying infrastructure currently being created for delivery drones, some of which are very large. Those drones will require similar autonomy and intelligence. Even DHL is in the hunt for this new delivery method and is testing automated trucks that can deploy hybrid drones automatically in what appears to be a far more advanced solution than Amazon currently has.
But Once You Get Cars And Planes…
Once you have solved the problem of navigating on roads and in the air, navigating in the home and in companies becomes far easier. This would allow this same technology to be adapted to robotics and, while the drone market is massive, the robotics market has the potential to match the cell phone market in size, providing robotic assistants to people in developed countries all over the world. Some of these things have yet to cross over from being really creepy, but once machines can think, see, and make determinations autonomously, they’ll likely be much better. Applications are as diverse as our imaginations and, unlike people, they can be specifically designed to perform certain tasks.
In short, once you have an intelligence platform, the total available market for it is almost unbelievably large.
We have a lot of companies in the chase for this illusive market opportunity, each with unique capabilities and skills. What BlackBerry brings to the table is security, and this may actually become the killer aspect of its offering. If these robotic devices become compromised they could do a lot of damage. We’ve recently seen how humans turned trucks into weapons, and if enough autonomous cars, trucks, and planes were compromised at once they could do an unprecedented amount of damage. Thus, ensuring this can’t happen will likely become a defining competitive advantage for BlackBerry’s offering.
BlackBerry’s transition is impressive; moving from hardware to software and services is anything but easy, and most companies that have tried this have failed. BlackBerry is the exception and, now that they have largely completed the transition, it is pivoting to technology that could be used in autonomous cars, planes, and eventually robotics, providing a solid future for the company. Its competitive edge is security and, given the risk of these things becoming weaponized, that competitive edge could well define them as a leader in this segment.
Apparently, the new BlackBerry is less about smartphones and more about smart everything else. Go figure…
President and Principal Analyst, Enderle Group
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