BlackBerry's Hidden Opportunity in Health Care?

Could BlackBerry's QNX help Apple take down Microsoft in smart hospitals?

Apr 13, 2014 at 11:30AM

In the past, I've discussed Apple (NASDAQ:AAPL)and Microsoft's (NASDAQ:MSFT) roles in connecting smart hospitals.

However, one company that investors often overlook in health care is BlackBerry (NASDAQ:BBRY), the fallen tech titan whose global market share in smartphones plunged from 50% in 2009 to less than 1% today. BlackBerry's secret weapon in the medical industry -- and possibly the key to its survival -- is a little operating system known as QNX.

QNX: BlackBerry's invisible operating system
BlackBerry acquired QNX, a Unix-like operating system, in 2010. It is used to control devices with embedded technology, such as Internet routers, air traffic control systems, shipping navigation systems, mobile devices, cars, and medical devices. QNX is compatible with a wide variety of open-source technologies, including Android, Java, HTML5, and OpenGL ES -- making it a versatile OS for developers.

Since QNX can be modified in so many ways and embedded in so many devices, it's often considered an "invisible OS" that isn't as well-known as Windows, Android, or iOS. In hospitals, QNX is installed on medical devices such as blood pressure monitors, pulse oximeters, ECG equipment, eye surgery lasers, and patient monitoring devices. In 2011, BlackBerry specifically rolled out a reference design for hospitals, enabling wireless connections between medical devices, peripherals, tablets, and desktops.

QNX's main rival in the medical field is Microsoft's Windows CE/Embedded.

BlackBerry could help Apple crush Microsoft in hospitals
To understand why BlackBerry could crush Microsoft in hospitals, we should consider two recent events in the auto industry.

In February, Ford dumped Windows CE/Embedded from its cars' infotainment and control systems in favor of QNX, reportedly due to higher licensing costs and limited functionality. In March, Apple introduced CarPlay, an iOS-mirroring infotainment system, which was built on top of QNX. Analysts estimate that 50% to 70% of modern cars are now installed with QNX.

A similar situation is now developing in hospitals. Apple iPhones and iPads are more popular than Google Android devices for the development of medical apps and peripherals, since their hardware and software are identical across the same generation. Meanwhile, increasingly relaxed BYOD (bring-your-own-device) policies in hospitals are fueling a positive feedback cycle in which more medical apps are being developed to meet a higher demand among physicians.

Yet Apple's main weakness against Microsoft is the lack of a cohesive ecosystem. Windows accounts for over 90% of the world's desktop and laptop operating systems, which allows Microsoft to roll out its tablet-based Windows 8.1/RT EHR apps over an older framework of desktop-based ones. These systems are then synchronized to Windows Embedded medical devices.

Apple can strike back at Microsoft by synchronizing its devices to QNX embedded ones, just as it did with CarPlay. Since the QNX framework already supports Bluetooth, Wi-Fi, and other connections, Apple can use the QNX framework, along with the cloud-connected capabilities of iOS devices, to leapfrog over Microsoft and cut the Windows ecosystem out of the equation.

The keyword is security
But cutting Microsoft out of the equation is only half of the big picture. BlackBerry's core competency has always been security, which made its smartphones popular with enterprise customers in the past.

A 2012 report from Technology Review stated that malware across network-connected hospital devices and systems was "rampant". The report blamed the locked down nature of Windows Embedded medical devices, which hospitals cannot modify or upgrade to deal with the threats. Google Android, which is an open-source system, has been cited as a potential solution, but a report from McAfee last year noted that 97% of malware attacks are directed at Android devices -- making it a much riskier platform than Windows Embedded.

Meanwhile, Apple has taken BlackBerry's place among enterprise customers. A QNX and iOS ecosystem, which ties together BlackBerry's robust security knowledge with Apple's consumer and enterprise appeal, could be an ideal alternative to Windows or Android in hospitals.

The Foolish takeaway
Although it's probably too late for BlackBerry to mount a comeback in smartphones, the company will roll out a full-featured QNX Cloud Platform in fiscal 2015, which could be a crucial turning point for the company in embedded technologies.

Until then, investors should keep a close eye on the budding relationship between BlackBerry and Apple, since it could result in major changes in health-care IT in the near future.

Invest in the next wave of health-care innovation
The Economist compares this disruptive invention to the steam engine and the printing press. Business Insider says it's "the next trillion-dollar industry." And the technology  behind is poised to set off one of the most remarkable health-care revolutions in decades. The Motley Fool's exclusive research presentation dives into this technology's true potential and its ability to make life-changing medical solutions never thought possible.  To learn how you can invest in this unbelievable new technology, click here now to see our free report.

Leo Sun owns shares of Apple. The Motley Fool recommends and owns shares of Apple, Ford, Google (A shares), and Google (C shares). It also owns shares of Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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