BlackBerry Ltd. is in advanced talks with Tata Motors Ltd.'s Jaguar Land Rover unit to provide the car maker with a software portfolio for building next-generation autonomous and electric vehicles, according to people familiar with the matter.
A potential deal between the two companies would give JLR access to the Canadian company's QNX software suite, which would be used to securely handle the computing power needed to run driverless vehicles, these people said.
A formal contract between the two companies hasn't yet been signed and there is no guarantee there will be a deal, they said.
The people said the possible deal would be similar in scope to BlackBerry's tie-up with Ford Motor Co., which uses the company's QNX software within its fleet, including a dedicated operating system and program to control other software and related-security technology.
While BlackBerry wouldn't immediately generate sales with a deal, revenue would be likely to come when JLR releases next-generation cars with QNX software embedded within their components, said one of the people.
If the deal goes through, BlackBerry could generate up to $25 per car in royalties depending on how many QNX modules are used in a vehicle, the person added.
"It's really about licensing of BlackBerry's portfolio to them and helping their engineers build a car using BlackBerry's software components," one of the people said.
BlackBerry is devoting more resources to the auto sector, where it sees itself as a significant software supplier to companies looking ahead to build next-generation vehicles. It has identified the auto sector as a key area for growth in its higher-margin software business after losing out in the global handset wars to Apple Inc., Samsung Electronics Co. and others.
BlackBerry's QNX software is used to securely manage and handle the millions of lines of code that autonomous cars rely upon to analyze a complex system of sensors to avoid hitting other vehicles, read traffic signals, and assess road conditions. The company doesn't write the code used by driverless cars but mainly acts as an operating system that connects various components, much like how applications run on Microsoft Corp.'s Windows.
The QNX software is already in more than 60 million vehicles globally, although the majority is currently used to help manage entertainment and information systems, rather than to support driverless technology.
Earlier this month, the company demonstrated Canada's first public road test of an autonomous vehicle on a stretch of road near its Ottawa offices in one of its QNX concept cars.
Other tech companies, such as Apple, Samsung and Google parent Alphabet Inc., are working with car makers to provide their own technology for the autonomous vehicle market. Some car makers, such as Toyota Motor Corp., are developing their own technology platform using open-source Linux software.
According to a recent analysis by CIBC World Markets, BlackBerry's QNX operating system would supply about 8% of the global car market share with Ford and a potential deal with JLR. The company's operating system software could supply up to 32% of the car market if it can secure more deals with car makers in need of that technology, according to that analysis.
The possible tie-up with BlackBerry would come as JLR, the U.K.'s biggest car maker by production, looks to hire an additional 1,000 electronic and software engineers to ramp up its own development in autonomous and electric vehicles.
In June, JLR has also paired with Lyft Inc., the Silicon Valley ride-hailing company, with a $25 million investment aimed at collaborating on "mobility services."
William Boston contributed to this article.
Write to David George-Cosh at firstname.lastname@example.org
(END) Dow Jones Newswires
November 03, 2017 13:57 ET (17:57 GMT)