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Could Smart Cars Really Save Blackberry?

Is it time for the struggling handset maker to shift gears completely?
Ford's Fusion Energi model at CES. Image: Derek Mead

It's no secret that BlackBerry has been on the ropes for a while now. The former leader in the smartphone market has seen its business depreciate in value precipitously in recent years as rivals like Apple and Samsung swooped into the market with more consumer-friendly products. It was almost sold for parts in late 2013, but the deal was ultimately scrapped in favor of a $1 billion cash infusion keep it afloat. Even then, the company formerly known as Research In Motion Limited was only valued at several billion dollars at most—a far cry from the $40 billion at which it was valued in 2007.

At the time of the deal's dissolution, BlackBerry CEO John Chen did his best to sound a hopeful note, telling reporters that the business is still "an iconic brand with enormous potential."

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The question the company is now facing, then, is where exactly it should apply that potential. Its old business-class line of handhelds are for all intents and purposes, in the words of Businessweek, a relic. Bowing to mobile market trends hasn't done the company any huge favors, either: its line of touchscreen-only Z10 smartphones failed to recast the company as a viable competitor to the big two smartphone makers.

Now according to a report from Bloomberg, BlackBerry may be receiving a new lifeline for another part of its business that's mostly been flying under the radar as of late: cars.

According to Bloomberg, Ford is considering switching from Microsoft's Sync technology to BlackBerry's analogous QNX software. BlackBerry first acquired QNX back in 2010, and it already uses the tech in BMW and Audi models. But a deal with Ford would be an important boost for BlackBerry, and not just because it would introduce its QNX system to customers outside of the luxury car market. It would also be a big blow to Microsoft, which has also been competing with BlackBerry to position itself as a viable third in the smartphone market with its new-ish line of Windows phones. Ford already has some 7 million cars on the road that are using Microsoft's Sync software, so any change would likely start a bidding war of sorts.

BlackBerry stands to gain a lot from the deal. As Gartner analyst Thilo Koslowski explained to Bloomberg, the deal would give “a huge infusion of trust and confidence" in its ailing business. Interestingly, he went on to suggest that QNX has become the company's de facto flagship brand, referring to it as the "crown jewel" that "could make the rest of the company shine as well."

Given how poorly the rest of BlackBerry's business is faring at this point, that might not be saying much. But just how beneficial could a change in focus like this be for the company?

Still, it's not clear just how beneficial this would be for BlackBerry in the long run. GigaOM's Kevin Tofel wondered if a deal with Ford could help resuscitate the company's ailing handset business. But many analysts have already begun to express doubt about the future growth of the smartphone market. Earlier this month, the research firm Gartner released a report predicting that smartphone sales growth will decline throughout 2014 thanks to a proliferation of "low- and mid-price smartphones in emerging markets."

As for "smart car" technology, it's the sort of thing that's all the rage at the Consumer Electronics Show every year. Cars are definitely going to become more connected, and relying on a third-party OS makes more sense for most automakers than trying to develop one themselves. But can QNX be the ticket? Plus, for the really cynically minded, the overall decline in car use in the United States since 2005 makes you wonder if BlackBerry would be jumping from one slowing market to another.

These are just trends, to be sure. A lot of people in the US (and elsewhere) will continue to buy cars and smartphones for the foreseeable future. But for a company in as dire straits as BlackBerry, reaching for a bigger slice of the pie might not be enough when the pie itself is already beginning to shrink.