BlackBerry has talked internet of things, beefed up its software business via acquisition, has an asset in QNX that is powerful in the auto industry, but hasn't created a product or service that's fresh and organic in the new era.
Could BlackBerry Radar, which is designed to track trailer assets in the trucking industry, be that product?
We all know the hardware business that made BlackBerry famous is in decline if not going to zero in the years ahead. Given that decline, BlackBerry wouldn't be crazy to eventually exit the device business entirely.
That's why Radar--a big swing at the Internet of things market--could signal that the reinvention of BlackBerry is paying off. On BlackBerry's first quarter earnings conference call, CEO John Chen talked Radar and the software business. He also noted that Radar, unveiled in March, would be commercially available mid-July.
Radar allows trucking companies and logistics players to track location, temperature, humidity and cargo presence. BlackBerry is targeting North America at first, but could go global.
Customer and trucking and logistics will benefit from the higher utilization of assets, improved efficiencies, and enhanced return on investment. Of course, our platform is based on the BlackBerry-level security and there are also anti-theft features built in as well. To date, we have conducted two successful proof-of-concept trials and are launching it commercially in mid-July, which is obviously next month. Our initial target market is in North America, followed by Europe, and then we'll expand to the rest of the world.
Radar is currently in trials with three companies. TD Securities analyst Daniel Chan said on of those companies may be Wal-Mart. If Chan is correct, Radar would have an instant reference customer that operates at scale.
Depending on the source of the statistics, there are anywhere between 3 million-12 million trailers currently in the U.S. alone. Of this amount, it is estimated that only 14-20% have telematics services attached to them, leaving an under-penetrated market for Radar. If Radar starts addressing the global trailers and shipping containers market, the addressable market would be much larger.
According to Chan, Radar's total addressable market is $2.1 billion in hardware and $1.7 billion in annual recurring. Should Wal-Mart be a Radar customer, other industries would follow.
In these industries, companies want an end-to-end integrated system since it doesn't make sense to cobble together one. BlackBerry's hardware is a standalone monitor that is installed on the door of a trailer. From there, the device connects to the mobile network.
The bigger picture here is that BlackBerry's Radar could be compelling evidence that the company can use its mobile, embedded systems and security knowhow to grow in new industries.