BlackBerry Ltd. on Dec. 19 announced plans to invest about 100 million Canadian dollars in its push to develop software for the operation of driverless cars, hiring up to 600 engineers, as the company forges into new business lines after its retreat from smartphones.
A hub will be established in Ottawa to focus on software development under BlackBerry’s QNX platform, the Waterloo, Ontario-based company said.
BlackBerry chief executive John Chen unveiled the company’s plans at an event at the company’s offices in suburban Ottawa, in which Prime Minister Justin Trudeau also appeared. Trudeau said BlackBerry’s announcement on autonomous driving indicates the company “is ready to push the limits of innovation once again.”
Chen said the plan is to spend about C$100 million over the next few years at the Ottawa center. Most of the money would be focused on recruiting up to 600 engineers. The company employs roughly 5,000 employees, down from about 17,000 at BlackBerry’s peak at the end of fiscal 2011.
Building software for auto makers “is going to be a fast-growing business for us,” Chen told reporters. “This is only the beginning of what you are seeing here. Every car manufacturer is a potential customer of ours; so this could have a lot of operating space.”
Autonomous cars rely on a complex system of software and sensors to avoid hitting other vehicles, to read traffic signals, and to assess road conditions.
BlackBerry’s pivot toward autonomous driving comes after the company announced it would stop directly manufacturing smartphones and would instead license its technology to third-party manufacturers. It has already signed agreements with manufacturers in Indonesia and China, and is in talks with an Indian-based company.
BlackBerry QNX was first developed as a software platform aimed as part of the fundamental components of a power plant’s operating system, but has later become an integral part of a car’s “infotainment” system. The software is currently used in more than 60 million cars, including ones made by Ford Motor Co. and General Motors Co.
BlackBerry put QNX into its own software division back in 2014 as the company looked to address the global markets for secure, reliable communications and embedded applications.
Chen said he would be looking to recruit partners, and opened the door to possible investment from the Canadian government. He declined to say how much of financial backing he was seeking from Ottawa, adding though it “was not going to be a lot.” Trudeau didn’t mention financial backing in his remarks at BlackBerry’s Ottawa offices.
“We intend to build this as a center of excellence in Canada,” Chen said. “People ask if we are competing with Google. We are not competing with Google. We would love them to use our technology.”
Daniel Chan, an analyst with TD Securities, believes revenue from BlackBerry’s QNX business has been growing at “double-digit rates” recently. Its deal with Ford is a sign that the software company could “aggressively pursue relationships with automobile manufacturers directly.”
In October, BlackBerry and Ford signed a deal where the software firm was designated as a “Tier One” supplier for the automaker. BlackBerry was also tapped by the Ontario government last month as one of three companies in a pilot program to test driverless cars on provincial roads.
BlackBerry reports third-quarter fiscal 2017 results Tuesday morning. Analysts expect the company will report revenue of $331.9 million for the quarter and an adjusted loss of one cent a share, according to Thomson Reuters.