Investors jump in after BlackBerry seals deal on auto software

BlackBerry Ltd. began 2018 with a bang after it announced a selfdriving software deal with a Chinese internet search giant, boosting its stock to its highest level in nearly five years.

The Waterloo, Ont., software company will work with Baidu Inc. on technology to power autonomous vehicles, the companies said in a joint release Wednesday.

BlackBerry’s QNX operating system will become the foundation for the autonomous driving platform Baidu launched last spring. In a nod to the scale of the project, Baidu called the technology Apollo after the first lunar landing. It said it has already partnered with more than 70 top automotive manufacturers, suppliers and developers around the world.

The deal sent BlackBerry’s stock price up by 12.85 per cent to $16.95 on the Toronto Stock Exchange, hitting levels it hasn’t seen since 2013. After three tough years and last year’s rebound, investors seem keen to jump in the passenger seat as CEO John Chen continues to morph the former smartphone maker into a software company.

Chen set his sights on the car industry as one of BlackBerry’s top future revenue opportunities. Last year, BlackBerry announced deals with Delphi, Denso, Qualcomm, and Visteon in the automotive space where its QNX technology is a front-runner among developers racing to get self-driving cars on the road.

The Baidu deal could lead to more opportunities in the growing Chinese auto market. It is a very material opportunity for technology companies that get well-positioned with automotive OEMs, CIBC Capital Markets analyst Todd Coupland said, adding that such self-driving features will be on all cars in the next few years.

“The opportunity is global, it’s for a very large market and I think it’s a very solid win for BlackBerry,” Coupland said.

Indeed, Baidu indicated the partnership could speed up the introduction of self-driving cars. “We aim to provide automakers with a clear and fast path to fully autonomous vehicle production, with safety and security as top priorities,” Li Zhenya, general manager of the intelligent driving group, said in a statement.