The Tech Download: BlackBerry lost the phone war. Now it's betting on cars and robots
In this article SKHY BB NVDA SKHY This report is from this week's The Tech Download newsletter.
Like what you see? You can subscribe here. Who remembers the phrase "BBM me?" In its heyday, BlackBerry was one of the biggest phone makers in the world.
BlackBerry Messenger (BBM) was the instant messaging service that became a fixture of early smartphone culture. But while, BlackBerry remains an iconic brand, its business today looks vastly different from what it was nearly two decades ago.
While far off its 2008 highs, BlackBerry's share price has doubled this year as investors reward the company's strategy to focus on critical software for cars and secure communications. John Giamatteo, CEO of BlackBerry, joined me for the latest episode of "The Tech Download" to discuss how the company is positioning for a future in AI.
"While the products that we offer to our customers around the world can't necessarily be held in the palm of your hands like the old devices, those values of security, trust and innovation still shine through in the software and services and the other solutions that we deliver to the market today," Giamatteo said as he summed up the current business.
New look business model Two businesses drive the bulk of BlackBerry's revenue. The first is secure communications. BlackBerry sells encrypted and secure communications products to customers like governments. The second is QNX, a business through which BlackBerry sells operating systems and other embedded software for cars to underpin features ranging from braking systems to some semi-autonomous driving functions.
QNX has become a strong player in safety-critical automotive software and is embedded in 275 million vehicles, according to BlackBerry. But Giamatteo sees the QNX business as key to a future in AI, specifically, physical AI, a term that encompasses products like autonomous cars and robotics. BlackBerry has crafted its software to have high safety standards, a non-negotiable for cars and other moving objects.
That could also work in areas like robotics. "We think that could be even a faster-growing segment of the industry for things like robotics," Giamatteo said. The CEO is not talking about humanoid robots, like the ones you've probably seen videos of in China recently.
Instead, he is referring to robots in an industrial, factory or medical setting. Robotics is one of the company's "fastest-growing businesses inside the QNX portfolio," the CEO told me. BlackBerry is also now making money from the sector.
The company has a backlog of orders for QNX worth $950 million and "a portion of that is robotics," Giamatteo said. He did not disclose specific numbers around the robotics orders. After the launch of the iPhone in 2007 transformed the smartphone industry, BlackBerry fought hard to keep its consumer mobile division alive with new devices — but ultimately lost the battle.
Its reinvention has been a remarkable one, and for now, investors seem to be embracing the new direction. News edit A San Francisco federal judge on Thursday ruled that the Pentagon's blacklisting of Anthropic earlier this year was illegal. Anthropic has inked a roughly $45 billion cloud deal with Nscale, a U.K.-based AI infrastructure company, sources told CNBC.
Nvidia's near-monopoly over the most advanced AI chips is under "threat" as OpenAI's and other tech giants announce custom-built semiconductors, according to analysts. OpenAI has rolled out ads on ChatGPT for select plans in India, one of its largest and most active markets, as the company looks to maximize its revenue ahead of its planned listing next year.
SK Hynix is bolstering its U.S. presence, with a new factory in Indiana that CEO Kwak Noh-Jung says will make the state a "key HBM production base in America" by 2030. One more thing Bucking the trend — Nvidia's stock boost on Thursday was a sharp change to its fortunes in the previous four earnings quarters. Despite meeting or beating estimates, shares dropped as investors remained unimpressed.
Not so this time out.