BlackBerry is trying to get a hold in the potentially lucrative market of the Internet of Things with its QNX software. Even though the company enjoys a dominant position when it comes to the IoT, Sierra Wireless is gaining momentum and is emerging as a strong player, according to a report from Motley Fool by Cameron Conway.
BlackBerry a dominating force in IoT
Over the past few years, the Internet of Things has gained majorly in the technology sector with companies offering “smart” products that are able to connect to the Internet. A new connected world is emerging in which smartphone, tablets, cars, machinery, shipping containers and other things are interconnected.
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BlackBerry will allow companies to use its system to track things such as shipping containers and medical devices. The company is hoping for a large share of the market by connecting its technology with vehicles as fleet managers, and companies will be able to deploy the technology to monitor usage in real time. The rollover of such technology has already begun with BlackBerry pre-installing it in 50 million vehicles.
Such a step from BlackBerry could be seen as an obvious choice “as it is borrowing from its device management software and security infrastructure to create its IoT infrastructure,” says the report. Substantial revenue from the Internet of Things segment could help the Canadian firm in mitigating losses from the hardware division. BlackBerry has already surpassed competitors when it comes to Internet of Things.
Rising threat for BlackBerry
However, Sierra Wireless is challenging BlackBerry in the segment as it recently acquired the Swedish firm Maingate for $90 million. The acquisition will help it gain 500 customers in Europe with a combined 500,000 devices on its network. Sierra-controlled Maingate was set up in 1998 and specializes in machine-to-machine and cloud-to-device communications. After the acquisition, the company is expected to contribute $6 million in EBITDA per year to Sierra Wireless’ books.
Unlike BlackBerry shares, Sierra Wireless shares have performed pretty well with consecutive growth on the TSX. BlackBerry, on the other hand, sustained a recent drop of 20% after a 30% gain from the false rumor of a Samsung takeover.
Although Sierra Wireless is a potential player in the segment, it will take a lot more than just an acquisition to challenge a company as big as BlackBerry in the Internet of Things.