BBRY Blackberry Limited

By John D. Stoll 

BlackBerry Ltd. is now a "Tier One" supplier for Ford Motor Co., a designation that cuts out the use of a middleman in supplying products or services to the auto maker.

The move, announced Monday, represents an "inflection point" taking place in the global car business, said John Wall, head of BlackBerry's QNX Software Systems. BlackBerry, a once-dominant smartphone maker, has increased its focus on software development after losing significant market share to Apple Inc., Samsung Electronics Co. and others in the global handset wars.

Being recognized as a Tier One supplier, rather than having to go through other suppliers to sell to companies like Ford, is important for BlackBerry's future in the automotive industry. The Canadian company is developing software for several challenges facing car companies, including helping to coordinate functions for autonomous vehicles.

Ford, which is being lapped on self-driving car testing or electric cars by some tech companies and startups, including Tesla Motors Inc. and Google's car project, aims to have a fleet of autonomous test-vehicles next decade. BlackBerry aims to offer products that can enable so-called connected cars but faces a barrage of competition both from the traditional auto-supply base and tech firms.

BlackBerry's QNX Software is already in tens of millions of cars, spanning Volkswagen AG to General Motors Co. Its relationship with Ford dates back several years and relates to software needed as an operating system in the auto maker's SYNC infotainment service.

In an interview, Mr. Wall said BlackBerry typically deals with auto makers early in vehicle development, but then works through an auto supplier that is supplying a component to the auto maker with BlackBerry's product embedded in it. The transition comes as auto makers are continually adding lines of software code to their vehicles and scrambling to boost the security and capability of systems ranging from mapping to vehicle-to-vehicle communication.

Apple, Samsung, Google parent Alphabet Inc. and other tech companies are looking to ink supply agreements with auto makers or are developing their own systems for autonomous vehicles and other services. At the same time, Apple's iOS mobile operating system and Google's Android are becoming more ubiquitous in light vehicles due to new systems being installed by auto makers that allow occupants to plug in their smartphones so that the device's operating system can take over.

Mr. Wall said working as a Tier One supplier likely will lead to more BlackBerry QNX deployment in cars. Mr. Wall didn't comment on how the arrangement will affect BlackBerry's pricing power with companies like Ford.

Write to John D. Stoll at john.stoll@wsj.com

(END) Dow Jones Newswires

October 31, 2016 16:29 ET (20:29 GMT)

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