Wed, April 24, 2024 at 9:35 AM EDT
Business
BlackBerry's path from smartphone roadkill to smart car pioneer — with a brief detour into meme stock – CBC.ca
The obituary for BlackBerry as a smartphone pioneer has been written countless times before. But after pivoting its business away from devices and toward the software that powers them, reports of the company’s death are proving to be premature.
BlackBerry’s QNX software, which tracks real-time data for features like Google maps, GPS navigation, traffic monitoring and infotainment systems, is already embedded in millions of cars on the road today.
And the company recently partnered with Amazon to create BlackBerry Ivy, a new cloud-based platform that takes things a step further into the realm of self-driving technology, collecting real-time data and making on-the-fly recommendations for everything from dangerous road conditions to the location of the nearest electric charging or gas stations.
“You can look at things like traffic congestion or offering new services to your customers, like being able to recommend where there’s an open parking space, based on where you’re at,” is how Sarah Tatsis, who heads up the program at BlackBerry, describes it.
Pinning hopes to an automotive future
The company has high hopes for the technology, but acknowledged it’s not perfect in a news release last week. In a blow to its stellar reputation for security, BlackBerry revealed that it had found a potential vulnerability in versions of QNX that came out prior to 2012.
While versions since then aren’t impacted and the company said it’s “not aware of any exploitation of this vulnerability,” it underscores just how important BlackBerry thinks the automotive industry is to its future.
While few drivers are likely aware of it, QNX is already installed in 195 million vehicles on the road today. That’s almost 100 times the number of vehicles Tesla has out there, providing similar data points to learn from and giving Canada’s fallen tech giant a leg up in the self-driving space.
WATCH | How BlackBerry got beat in the smartphone industry it created:
“It’s a big advantage for BlackBerry to already be in close to 200 million smart vehicles right now,” independent technology journalist Pascal Forget said in an interview with CBC News.
“They have much more data points, much more data that they can use to improve their systems compared to Tesla.”
Forget says he doubts that being just one component under the hood of every smart car on the road is enough to bring the company back to its glory days, but he says it could at least mean a new lease on life.
Bumpy road back
CEO John Chen has helmed BlackBerry for eight years now, and his mission since day one has been to do exactly what they’re doing now: pivot away from the lost battle of handsets and toward the software that powers the gadgets of tomorrow.
That path has been a painful one, with several rounds of major layoffs that hit hard in the technology hub of Kitchener and Waterloo, Ont.
“It was definitely a challenging time and there was a lot of worry locally,” says Mike Kirkup, the company’s former head of developer relations.
WATCH | How BlackBerry created the next generation of Canadian tech stars:
While BlackBerry was losing people, Kirkup says there was a concerted effort to retain a lot of the company’s talent in the region. Because even as it was dying in smartphones, the company was giving birth to the next generation of high-flying tech stars.
Many ex-BlackBerry people went on to build their own startups, while others helped take existing tech companies to the next level.
The data surveillance company Magnet Forensics, for instance, mostly consists of former BlackBerry employees in its executive team, including CEO Adam Belsher and chairman Jim Balsillie, who cofounded BlackBerry with Mike Lazaridis in the early 1990s when it was known as Research in Motion.
Magnet Forensics, which helps law enforcement agencies fight cybercrime, went public in May with an IPO on the Toronto Stock Exchange that raised $115 million. Barely three months later, those shares have already tripled in value.
“I think that’s the understated or underrepresented story of the impact of what all those BlackBerry people are doing now: they’re scaling the next generation of companies with a level of experience and global knowledge that very few people would’ve had before,” Kirkup said.
Meme stock treatment
While the name doesn’t have the cachet it once did, BlackBerry’s penchant for having world-leading tech was a factor in shares of the company going on a run earlier this year.
The stock price hit a nine-year high in January after news of the smart-car deal with Amazon landed, but a lot of the hype came from BlackBerry’s sudden status as a “meme stock” — a company retail investors pile money into, often confounding analysts who have a more intimate knowledge of the company’s financial prospects.
Robert Tétrault, portfolio manager at Canaccord Genuity in Winnipeg, says BlackBerry owes its run to the “GameStop phenomenon,” where online investor forums would co-ordinate to drive trades and pump up the value of certain stocks.
“It was all about sticking it to the institutions, sticking it to Wall Street. And pumping up a stock that they believed could grow.”
While that rally mostly fizzled, BlackBerry’s brief time as a meme stock speaks to how investors think the company has some valuable tech under the hood.
Regardless of that hype, turning high-tech driving software into actual profits will be where the rubber meets the road for the company.
“Redditors are focused on the next big thing and earnings are less important. But at the end of the day, a stock will be a reflection of its potential future earnings regardless of what happens online,” Tétrault said.
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Business
Oil Firms Doubtful Trans Mountain Pipeline Will Start Full Service by May 1st
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Oil companies planning to ship crude on the expanded Trans Mountain pipeline in Canada are concerned that the project may not begin full service on May 1 but they would be nevertheless obligated to pay tolls from that date.
In a letter to the Canada Energy Regulator (CER), Suncor Energy and other shippers including BP and Marathon Petroleum have expressed doubts that Trans Mountain will start full service on May 1, as previously communicated, Reuters reports.
Trans Mountain Corporation, the government-owned entity that completed the pipeline construction, told Reuters in an email that line fill on the expanded pipeline would be completed in early May.
After a series of delays, cost overruns, and legal challenges, the expanded Trans Mountain oil pipeline will open for business on May 1, the company said early this month.
“The Commencement Date for commercial operation of the expanded system will be May 1, 2024. Trans Mountain anticipates providing service for all contracted volumes in the month of May,” Trans Mountain Corporation said in early April.
The expanded pipeline will triple the capacity of the original pipeline to 890,000 barrels per day (bpd) from 300,000 bpd to carry crude from Alberta’s oil sands to British Columbia on the Pacific Coast.
The Federal Government of Canada bought the Trans Mountain Pipeline Expansion (TMX) from Kinder Morgan back in 2018, together with related pipeline and terminal assets. That cost the federal government $3.3 billion (C$4.5 billion) at the time. Since then, the costs for the expansion of the pipeline have quadrupled to nearly $23 billion (C$30.9 billion).
The expansion project has faced continuous delays over the years. In one of the latest roadblocks in December, the Canadian regulator denied a variance request from the project developer to move a small section of the pipeline due to challenging drilling conditions.
The company asked the regulator to reconsider its decision, and received on January 12 a conditional approval, avoiding what could have been another two-year delay to start-up.
Business
Tesla profits cut in half as demand falls
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Tesla profits slump by more than a half
Tesla has announced its profits fell sharply in the first three months of the year to $1.13bn (£910m), compared with $2.51bn in 2023.
It caps a difficult period for the electric vehicle (EV) maker, which – faced with falling sales – has announced thousands of job cuts.
Boss Elon Musk remains bullish about its prospects, telling investors the launch of new models would be brought forward.
Its share price has risen but analysts say it continues to face significant challenges, including from lower-cost rivals.
The company has suffered from falling demand and competition from cheaper Chinese imports which has led its stock price to collapse by 43% over 2024.
Figures for the first quarter of 2024 revealed revenues of $21.3bn, down on analysts’ predictions of just over $22bn.
But the decision by Tesla to bring forward the launch of new models from the second half of 2025 boosted its shares by nearly 12.5% in after-hours trading.
It did not reveal pricing details for the new vehicles.
However Mr Musk made clear he also grander ambitions, touting Tesla’s AI credentials and plans for self-driving vehicles – even going as far as to say considering it to be just a car company was the “wrong framework.”
“If somebody doesn’t believe Tesla is going to solve autonomy I think they should not be an investor,” he said.
Such sentiments have been questioned by analysts though, with Deutsche Bank saying driverless cars face “technological, regulatory and operational challenges.”
Some investors have called for the company to instead focus on releasing a lower price, mass-market EV.
However, Tesla has already been on a charm offensive, trying to win over new customers by dropping its prices in a series of markets in the face of falling sales.
It also said its situation was not unique.
“Global EV sales continue to be under pressure as many carmakers prioritize hybrids over EVs,” it said.
Despite plans to bring forward new models originally planned for next year the firm is cutting its workforce.
Tesla said it would lose 3,332 jobs in California and 2,688 positions in Texas, starting mid-June.
The cuts in Texas represent 12% of Tesla’s total workforce of almost 23,000 in the area where its gigafactory and headquarters are located.
However, Mr Musk sought to downplay the move.
“Tesla has now created over 30,000 manufacturing jobs in California!” he said in a post on his social media platform X, formerly Twitter, on Tuesday.
Another 285 jobs will be lost in New York.
Tesla’s total workforce stood at more than 140,000 late last year, up from around 100,000 at the end of 2021, according to the company’s filings with US regulators.
Musk’s salary
The car firm is also facing other issues, with a struggle over Mr Musk’s compensation still raging on.
On Wednesday, Tesla asked shareholders to vote for a proposal to accept Mr Musk’s compensation package – once valued at $56bn – which had been rejected by a Delaware judge.
The judge found Tesla’s directors had breached their fiduciary duty to the firm by awarding Mr Musk the pay-out.
Due to the fall in Tesla’s stock value, the compensation package is now estimated to be around $10bn less – but still greater than the GDP of many countries.
In addition, Tesla wants its shareholders to agree to the firm being moved from Delaware to Texas – which Mr Musk called for after the judge rejected his payday.
Business
Stock market today: Nasdaq futures pop, Tesla surges after earnings with more heavyweights on deck
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Tech stocks rose on Wednesday, outstripping the broader market as investors welcomed Tesla’s (TSLA) cheaper car pledge and waited for the next rush of corporate earnings.
The Nasdaq Composite (^IXIC) rose roughly 0.6%, coming off a sharp closing gain. The S&P 500 (^GSPC) was up 0.2%, continuing a rebound from its longest losing streak of 2024, while the Dow Jones Industrial Average (^DJI) fell 0.1%.
Tesla shares jumped nearly 12% after the EV maker’s vow to speed up the launch of more affordable models eclipsed its quarterly earnings and revenue miss. That cheered up investors worried about growth amid a strategy shift to robotaxis and the planned cancellation of a cheaper model.
The results from the first “Magnificent Seven” to report have intensified the already high hopes for Big Tech earnings, that the megacaps can revive the rally in stocks they powered. The spotlight is now on Meta’s (META) report due after the market close, as the Facebook owner’s shares rose after the Senate voted for a potential ban on rival TikTok. Microsoft (MSFT) and Alphabet (GOOG) next up on Thursday.
Meanwhile, Boeing (BA) reported better than expected first quarter results before the opening bell with a loss per share of $1.13, narrower than the $1.72 estimated by Wall Street. Shares rose about 2% in morning trade.
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