In a rather surprising bit of BlackBerry (NASDAQ:BBRY) news, the company has decided to invest an undisclosed amount in a small start-up health care IT company called NantHealth. The move came as a surprise to many, who see BlackBerry as strapped for cash and straining to cut costs. However, in this segment from Tuesday's Tech Teardown, Motley Fool tech and telecom bureau chief Evan Niu breaks down the rationale behind the move. BlackBerry's QNX platform is already used to run a wide range of medical devices, and by making this investment the company is looking to integrate that platform with NantHealth's Clinical Operating System. The two companies are working together to develop a health care industry-specific smartphone, a niche play that Evan sees as making a lot of sense.
As BlackBerry's efforts in the consumer market continue to sour, Evan sees it as high time the company started making this kind of shift to other markets. The company continues to maintain that it will not be abandoning its consumer hardware business, but as it continues to operate at a loss and bleed cash through operations, the odds of that business staying afloat much longer are getting slimmer.
Evan notes that, for a company in BlackBerry's position, it can often come down to two choices. Wait, and continue to burn through what's left of the company's cash reserves, or invest some of what's left in a long-shot bet, and hope for the best. In the video, Evan tells investors what he thinks of BlackBerry's prospects after this move.
Erin Kennedy has no position in any stocks mentioned. Evan Niu, CFA has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. 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.