Ford Motor Company, Google, Android, Cloud computing, Automotive industry Projects Invest Eps 11: We Bought Blackberry Stocks
My name is cal and today we’re going to be looking at the rise and fall and rise again of blackberry. But before we begin please subscribe to our channel. Please help us like the video and let us know in the comments your thoughts on blackberry when we think of blackberry, we think of their full size. You know qwerty keyboard phones back in the day they were the must have phones in the early 2010s. Uh interest peaked in 2012, with 80 million global blackberry users, with the most famous being then sitting president of the united states, barack obama. Then something happened. Some guy came along and gave this presentation that triggered the fall of blackberry. The problem with them is really sort of in the bottom 40. There it’s it’s this stuff right here. They all have these keyboards that are there, whether you need them or not to be there. So we now know what happened. Touch screen was the future. Steve jobs saw the writing on the wall already now. Apple and android dominate the mobile phone industry. So what happened to blackberry? It shares tank. They fired a bunch of people, they brought in john chan, former ceo of sybase uh. He wanted to transform the business away from the unprofitable hardware to high margin products such as software and services, while still focusing on its core identity, which is security, let’s jump forward to present day, as there were many highlights to talk about between then and now so What’S, going on with blackberry now john chan has turned blackberry into the iot market leader, so it’s internet of things.
So looking at this slide right here, uh the business transformation. You can tell that previously they did three percent in services and software, whereas in present day it’s, essentially the entire business 98 with 70 gross margins, so that’s a huge transformation because of the transformation they’re now working with some of the biggest names in their respective industries. So you got microsoft, samsung, google uh, so they got three business lines: uh blackberry spark for enterprise solution, blackberry, secure communications. It sounds exactly, as is what it is and they got blackberry, q and x os. This 08 os plays a huge role in blackberry’s. Smart card play it’s already embedded in 175 million plus cars automakers such as audi, bmw, ford, gm honda, hyundai jaguar land rover kia maserati on motherfingers, mercedes, benz, porsche, toyota. Volkswagen use all use this blackberry, q and x software in their digital instrument. Clusters, connectivity modules, hands, free infotainment systems, advanced driver systems, so think autonomous, think connected vehicles. Another source of revenue that not a lot of people know about is that they hold 38 000 plus patents in applications. Why is there a sudden interest in blackberry and the spike in the share price? Now so one of the major one of the reasons or recently huawei acquired 90 patents from blackberry. They recently settled another patent dispute with facebook, accusing the social media network of allegedly infringing on blackberry, blackberry, messaging technology. Blackberry has a treasure trove of patents and applications.
So this is probably not the last time we heard about these pan disputes and settlements. Another reason is a couple months ago, blackberry announced it would be powering the level 3 driving domain control of x pen, one of the most funded electrical vehicle startups in china and tesla’s local challenger in china, as well also x, pen uses blackberry’s operating system called qnx. One of the biggest reasons, in my opinion is the new blackberry ivy in in partnership with amazon web service services. So aws platform gives blackberry, ivy cloud connectivity, scalability, global reach and big data mindset in layman’s term iv is the connection between the vehicle data and vehicle application. There’S unlimited potential for third party application in areas such as car insurance, maintenance, ev charging connected vehicles. This fits in very nicely with q and x in the whole smart car play. So in the future. I foresee a duopoly in vehicle software, similar to what we see now in the mobile industry. You have apple and you have android. Tesla will continue to have its own software like apple, whereas the rest of the automakers will be using the combination of q and x, plus ivy uh kind of like android. I don’t see the the automakers, especially the legacy automatically creating their own. Historically, they have been horrible like horrible in software, and i think at the heart, the bread and butter is still the hardware making. So this is the reason we are very bullish on blackberry, full disclosure.
We have a long position in blackberry. You can follow our portfolio on walmine, see the description below we don’t have a big position, though, because we want to see more before investing more. I think if the company was a startup, investors would be in love with it, it’s just that they got a bad rep from their former life as a bone maker. All of this is potential it’s down to blackberry, to execute they haven’t really done so. In the past, hopefully, this time is different. I do want to give credit where credit is due. I want to commend john chen and his team for making changes, because it’s very tough and it’s a very painful process and now we’re, seeing that investors are rewarding him.