Let’s take a little trip back in time. It’s 2014 and we’re in Silicon Valley. An executive named John Wall, president of QNXa division of Blackberry, has just arrived in the world’s technology mecca, fresh from Waterloo, in Ontario (Canada). He goes to a meeting with managers from Audi, one of his company’s best clients. The automotive firm has just announced the arrival of Android Auto to its cars. Meanwhile, Apple he doesn’t stop signing QNX engineers to create their own operating system for cars. Blackerry’s shortcomings continue to grow: after losing in mobile phones, it now also had a really bad time in the infotainment systems business. And then, something happened. A beer.
The beer of the resurrection. Audi’s head of engineering went to have a beer with him and confessed that Audi was going to use Google’s infotainment systems. However, he told him, his next generation of cars would still need safety features that didn’t exist yet. So Wall came up with an idea. Instead of trying to control the car’s screen, I would try to conquer the software that is the backbone of that entire experience. “The circumstances that caused us to lose infotainment caused the company to pivot in the right direction, whether we knew it or not at the time,” counted Wall. The truth is that they did not have many alternatives, especially after experiencing one of the most famous boom and bust phenomena in the technology industry.
From everything to (almost) nothing. In 2008 BlackBerry I was on top of the world. Its market capitalization at that time reached $83 billion, but from then on it plummeted mainly due to the iPhone. Today its capitalization round the 3,000 million dollars, but the surprise is that its great treasure is an almost mythical software that has turned out to be a success in the automotive world. Its name: QNX.
How BlackBerry ended up making car software. In 2010 Research In Motion (RIM)—BlackBerry’s former official name— acquired QNX. This real-time operating system that appeared in the mid-1980s and in the 2000s completely changed its focus to target the automotive industry. When RIM bought it, it tried to take advantage of it for its own operating system, blackberry 10but we already know how that ended.
QNX’s other big business. The curious thing is that while the company was sinking in the mobile market, QNX engineers who had not moved to the smartphone team continued working on car software. John Wall, president of QNX, has been with the company since graduating in the early ’90s, and in an interview in The Wall Street Journal he recalled how “no one paid attention to us.” That was precisely what changed the course of the company.
A crucial operating system. QNX is the operating system that operates collision alerts, blind spot notifications, adaptive cruise control, pedestrian detection or lane correction systems. Not only in cars, be careful: also on motorcycles. It is invisible to the user, who never sees the QNX logo, but certainly sees that everything works. Wall compared his engineers to plumbers and electricians: “What makes QNX virtually irreplaceable is its reputation for never failing.” In Fortune a user commented years earlier how “the only way to make this software fail is to shoot a bullet at the computer running it.”
A flourishing business. For years QNX was an overlooked division within an ailing company, but today it accounts for about half of BlackBerry’s total revenue. The software that failed on mobile phones and tablets has ended up being almost the only business that matters for the company, but it has not been limited to cars. QNX is integrated into surgical robots and dozens of medical devices in hospitals around the world. It is also used in industrial plants and automation systems that depend on the security and reliability that QNX provides. It is not without problemsof course, but its software is still key in many critical systems.
Prize for being late. BlackBerry was late to the smartphone revolution and lost. It was also late to try to conquer the infotainment segment in the automobile industry and lost. But upon losing that second battle, it adapted and managed to reconvert its operating system into something for which it was precisely designed: a real-time operating system that does not fail and whose latency and response time was (and is) extraordinary. If QNX had continued trying to compete with CarPlay or Android Auto it would probably have disappeared completely, but now it is an absolute benchmark in a niche where its reliability is much more valuable than the flashy new features that infotainment systems usually sell. Today its systems are installed in more than 275 million vehicles.
BlackBerry is doing well. BlackBerry shares are up 50% in the latest financial results, and the company has four consecutive quarters in profits. That has caused BlackBerry CEO John Giamatteo to declare that his company “is now a growth story.” These data must be taken with caution, because BlackBerry is very far from where it was almost two decades ago, but the path this company has taken seems the right one. We may not see it compete in the mobility arena anymore, but it has become a fundamental element of an automobile industry that is only doing one thing: growing.
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