Should BlackBerry Sell QNX


BlackBerry originally bought QNX to use it as the basis for its new operating system. However, the time may now have come, that selling it might present a better opportunity for the company.

Earnings Factor

While QNX has served its main purpose as the base for its new OS, the fact remains that it is automotive software, which is a field that BlackBerry does not focus on. By removing this distraction, it could focus better on its core business which includes devices, and the software and services for them. The key is to determine if BlackBerry would benefit or hurt financially if it sold QNX. While the company does not separate QNX’s earnings in its reports, it is easy to work out the approximate share that comes from automotive software.

Out of the $491 million in revenue BlackBerry reported for Q2 of fiscal 2016, 15% resulted from software and services. That means that the maximum revenue coming from QNX is around $74 million, with the real number most likely lower, as BlackBerry has other software and service products. While a decent amount, it is unlikely to generate enough over time to bring the company’s stock to the next level, especially considering that the option for significant growth in such a small field is rather limited.

Renewed Focus on Devices

The best option for BlackBerry going forward is to renew its focus on devices as its structure and knowledge is still primarily based around hardware and not software. The company needs to come out with a new device that would generate tens of millions in sales. To achieve this, the best move could be selling off its subsidiaries, such as QNX, and invest the proceeds into research and development.

The company has the potential to do it, as they have proven it in the past. The question is, are they ready to make the key strategic changes necessary to move in the right direction.


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