BlackBerry in Talks With Tata Motors' Jaguar Land Rover for Software Deal -- Update
November 03 2017 - 2:12PM
Dow Jones News
By David George-Cosh
TORONTO -- BlackBerry Ltd. is in advanced talks with Tata Motors
Ltd.'s Jaguar Land Rover unit to provide the car maker with a
software portfolio for building next-generation autonomous and
electric vehicles, according to people familiar with the
matter.
A potential deal between the two companies would give JLR access
to the Canadian company's QNX software suite, which would be used
to securely handle the computing power needed to run driverless
vehicles, these people said.
A formal contract between the two companies hasn't yet been
signed and there is no guarantee there will be a deal, they
said.
The people said the possible deal would be similar in scope to
BlackBerry's tie-up with Ford Motor Co., which uses the company's
QNX software within its fleet, including a dedicated operating
system and program to control other software and related-security
technology.
While BlackBerry wouldn't immediately generate sales with a
deal, revenue would be likely to come when JLR releases
next-generation cars with QNX software embedded within their
components, said one of the people.
If the deal goes through, BlackBerry could generate up to $25
per car in royalties depending on how many QNX modules are used in
a vehicle, the person added.
"It's really about licensing of BlackBerry's portfolio to them
and helping their engineers build a car using BlackBerry's software
components," one of the people said.
BlackBerry is devoting more resources to the auto sector, where
it sees itself as a significant software supplier to companies
looking ahead to build next-generation vehicles. It has identified
the auto sector as a key area for growth in its higher-margin
software business after losing out in the global handset wars to
Apple Inc., Samsung Electronics Co. and others.
BlackBerry's QNX software is used to securely manage and handle
the millions of lines of code that autonomous cars rely upon to
analyze a complex system of sensors to avoid hitting other
vehicles, read traffic signals, and assess road conditions. The
company doesn't write the code used by driverless cars but mainly
acts as an operating system that connects various components, much
like how applications run on Microsoft Corp.'s Windows.
The QNX software is already in more than 60 million vehicles
globally, although the majority is currently used to help manage
entertainment and information systems, rather than to support
driverless technology.
Earlier this month, the company demonstrated Canada's first
public road test of an autonomous vehicle on a stretch of road near
its Ottawa offices in one of its QNX concept cars.
Other tech companies, such as Apple, Samsung and Google parent
Alphabet Inc., are working with car makers to provide their own
technology for the autonomous vehicle market. Some car makers, such
as Toyota Motor Corp., are developing their own technology platform
using open-source Linux software.
According to a recent analysis by CIBC World Markets,
BlackBerry's QNX operating system would supply about 8% of the
global car market share with Ford and a potential deal with JLR.
The company's operating system software could supply up to 32% of
the car market if it can secure more deals with car makers in need
of that technology, according to that analysis.
The possible tie-up with BlackBerry would come as JLR, the
U.K.'s biggest car maker by production, looks to hire an additional
1,000 electronic and software engineers to ramp up its own
development in autonomous and electric vehicles.
In June, JLR has also paired with Lyft Inc., the Silicon Valley
ride-hailing company, with a $25 million investment aimed at
collaborating on "mobility services."
William Boston contributed to this article.
Write to David George-Cosh at david.george-cosh@wsj.com
(END) Dow Jones Newswires
November 03, 2017 13:57 ET (17:57 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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