Why Did Amazon just team Up With BlackBerry? | The Motley idiot

Amazon (NASDAQ:AMZN) and BlackBerry (NYSE:BB) often don't work collectively. Amazon is the world's biggest e-commerce and cloud platform enterprise, whereas BlackBerry develops commercial enterprise software and features.

this is why it became unbelievable when BlackBerry these days partnered with Amazon web services (AWS) to launch a new linked automobile platform that merges BlackBerry's QNX working equipment with AWS's web of things (IoT) features. let's have a look at how this partnership could benefit each businesses.

graphic supply: Getty photographs.

understanding BlackBerry's car enterprise

BlackBerry acquired QNX in 2010, and it now debts for over half the embedded working device marketplace for connected cars. Its biggest competitor, Microsoft's (NASDAQ:MSFT) windows Embedded, best controls a few fourth of the market.

QNX's put in base tripled from 50 million cars in 2015 to over a hundred and fifty million automobiles in 2019. QNX connects a automobile's mechanical constituents to the dashboard, whereas telephone mirroring features -- like Apple's CarPlay and Alphabet's Android Auto -- operate on excellent of QNX.

Microsoft lost this profitable market to BlackBerry as a result of its software become buggier, less comfy, less conscious of voice commands, and harder to handle on touch displays. in the meantime, QNX persevered to benefit customers, with 31 design wins (11 within the automotive market and 20 across the broader embedded market) last quarter.

BlackBerry does not expose its QNX salary separately. in its place, or not it's protected in its IoT enterprise, which generated $one hundred forty five million in income last quarter and accounted for forty nine% of its true line. In mid-2018, Trefis estimated that QNX generated "just below" $50 million per quarter, but that it become generating "double-digit" boom. The company also estimated that QNX generates a license charge of about $4 per new car.

in accordance with these numbers, we can assume that QNX generates as a minimum $200 million a 12 months -- or virtually a fifth of BlackBerry's estimated revenue this 12 months. hence, it's standard for QNX to retain starting to be to offset the slower boom of BlackBerry's other commercial enterprise application and features, which struggled with macro headwinds and tougher competitors in contemporary quarters.

image source: Getty photos.

How can Amazon aid BlackBerry?

AWS launched its IoT platform in 2015. on the time, Amazon pointed out that it would make it less complicated for builders to create apps that hyperlink to myriad IoT devices, together with wise speakers, domestic home equipment, wearables, and linked vehicles. AWS is already the area's desirable cloud platform, so it makes perfect feel to combine its IoT provider into probably the most general embedded operating equipment for related automobiles.

by way of linking QNX to the cloud, automakers can instantly monitor a automobile's EV battery ranges and car subsystems, give over-the-air utility updates, and customise car cockpits,  advanced driver-counsel methods (ADAS), and laptop discovering fashions for self sufficient riding through cloud-primarily based apps.

The partnership may still additionally strengthen QNX's protection. BlackBerry already in the past upgraded QNX's security with Jarvis, a device that lets automakers spot bugs that may well be exploited by way of hackers, however AWS will add an additional layer of protection.

BlackBerry technology options co-chief John Wall mentioned that merging those strengths right into a single cloud-based offering would be sure that automakers "have the tools they should deliver the using event buyers need, without sacrificing on the protection and reliability they need."

AWS's growth into related automobiles might boost the unit's earnings and working profits over the next few years. AWS is Amazon's most ecocnomic division, and the unit's boom subsidizes the growth of Amazon's decrease-margin market organizations. AWS additionally faces intense competition from Microsoft's Azure in the cloud platform market -- partnering with BlackBerry might widen its moat against its hardest challenger.

The bottom line

Amazon's partnership with BlackBerry won't raise either tech company's near-time period profits. besides the fact that children, it reinforces BlackBerry's market-dominating position in embedded working systems for linked cars and expands AWS's reach into the car market. these strikes should still advantage both groups over the future as greater connected and driverless cars hit public roads.