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Will Ford Aid BlackBerry's Turnaround?
Posted by: FinanceGuru (IP Logged)
Date: June 19, 2014 04:40PM
Ford (F) is close to dumping Microsoft's (MSFT) troublesome MyFord Touch infotainment system. MyFord's faulty operations and slow response have been at the root of many customer complaints over the years, and the automaker is looking to replace it completely. Although it is not official, it is widely believed that MyFord will eventually be replaced by BlackBerry's (BBRY) QNX system.
BlackBerry has been struggling to turn its fortunes around for a long time. The stock was battered during the recent market sell-off, but the dip has made BlackBerry an attractive investment. BlackBerry's potential deal with Ford can strengthen its position in the car infotainment market and can be a game changer for the company.
According to IHS, global sales of vehicle infotainment systems in 2012 stood at $34.6 billion, and a spot in Ford's cars can open up a gigantic opportunity for BlackBerry; the MyFord system was sold in 79% of the Ford's cars in 2013.
Why the tie-up looks likely
Although Ford was among the first companies to offer the ability to pair mobile phones with in-car infotainment systems, it couldn't satisfy consumers. When it comes to customer satisfaction, Ford is way down the pecking order. Ford was ranked 23rd out of a total of 32 candidates for in-car technology in the Auto Express 2013 Driver Power customer satisfaction survey. Ford's management desperately wants to climb up that list, thus it's important for the Blue Oval to dump Microsoft's MyFord infotainment system.
MyFord is very hard to use. That's why it's important for Ford to replace it with QNX, which is already an industry standard. When it comes to in-car infotainment, QNX is second to none. QNX is being used in more than 200 vehicle models and is the market leader in operating-system platforms for in-car infotainment systems. According to IHS Automotive, QNX commands more than 50% of the market share, more than double than that of Microsoft.
Easy to upgrade
According to Egil Juliussen, principal analyst of infotainment for IHS Automotive, QNX's technology is error-free when it comes to the interface with Apple's iPhone and Google's Android software. In fact, Apple's new CarPlay in-car infotainment system will ride on top of QNX. Apple is seeking CarPlay integration with many big-name automakers like Nissan, BMW, Toyota, and others. BlackBerry is poised to benefit from this booming market.
Not only is QNX more dependable, it also offers better connectivity. For instance, BMW's ConnectDrive system allows drivers to bring many of their smartphone apps like email, calendar, and social media to the cars. In addition, the system also gives car owners the ability to control various functions of the cars by using their smartphones as a remote control.
The MyFord system is used in 7 million cars worldwide. However, according to several reports, it is very easy to upgrade the existing cars' infotainment systems to QNX. Not only that, QNX will also be cheaper to license than Microsoft's software, thus it is a win-win situation for both Ford and BlackBerry.
The in-car infotainment market is estimated to be worth more than $41 billion, and a potential spot in Ford's cars has opened up a very big opportunity for BlackBerry, especially since it has a market cap of $3.7 billion. BlackBerry has been struggling to narrow its losses for almost a year now, and QNX may help it achieve its primary goal.
Stocks Discussed: F, MSFT, BBRY,
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