The Health Care Market Looks Ripe to BlackBerry

With its investment in NantHealth, BlackBerry gets the first-movers advantage, as well as proven and capable partners in Patrick Soon-Shiong and NantHealth.

Apr 23, 2014 at 8:00PM

With repeated yearly losses this past fiscal year to the tune of $5.9 billion, the company once referred to as "Crackberry" has suffered a harsh withdrawal from the smartphone market, now barely holding onto 0.6% of the global share.

But, BlackBerry's (NASDAQ:BBRY) recent investment in billionaire Patrick Soon-Shiong's NantHealth signals that the company is on the move. With the move, BlackBerry will lessen its dependence on the smartphone market and instead leverage its core strengths to sell high-margin software in regulated industries such as health care, finance, government, and law.

BlackBerry's core strength
Even during its heyday in the smartphone market, BlackBerry's core strength was always enterprise services with a focus on a secure mobile infrastructure. BlackBerry may not be in vogue with consumers anymore, but its enterprise services are still favored by regulated industries with the strictest security needs. As CEO John Chen pointed out, this is why "seven out of seven G7 governments are also BlackBerry customers." This puts BlackBerry in a good position to continue targeting industries where security is at a premium. Complementing this security infrastructure is the powerful QNX.

BlackBerry's greatest asset: the QNX operating system
BlackBerry acquired QNX in 2010, which is an extremely fault-tolerant and resilient commercial operating system. As a result, it is favored in many "mission critical" industries that value durable technology. Another advantage of QNX is that it can control devices with embedded technology, like blood pressure monitors, ECG equipment, and patient monitoring devices, which makes it particularly well-suited for use in hospitals.

If the auto-industry is any indication of broader trends, QNX seems like it can be a powerful source of profit for BlackBerry. Earlier this year, Ford dumped Microsoft's automotive OS in favor of QNX, and Apple's CarPlay system, announced last month, also utilizes QNX. According to Paul Leroux at QNX:

Connectivity to smartphones and other mobile devices is a key strength of QNX Software Systems' platform for car infotainment systems, and many automakers and tier one automotive suppliers use our platform to implement smartphone/head-unit integration in their vehicles. We have a long-standing partnership with Apple to ensure high-quality connectivity with their devices, and this partnership extends to support for Apple CarPlay. 

Following Mercedes-Benz, Ferrari, and Volvo, other auto manufacturers will also equip their future vehicles with Apple CarPlay. Gartner analyst Thilo Koslowski predicts that by 2020, 80% of new vehicles will have such an infotainment unit, which means that QNX could be a significant source of revenue for BlackBerry just in cars alone.

The future of health care
Soon-Shiong, CEO of NantHealth, hopes to utilize QNX technology to help revolutionize the health care industry. NantHealth provides cloud-based intelligent clinical operating systems that synchronize medical records and give doctors unprecedented access to real-time data, ensuring better medical decision-making and productivity. "The future of the health care industry requires the ability to share information securely and quickly, whether device-to-device or doctor-to-doctor anywhere and at any time," said Soon-Shiong.

With Blackberry's investment in NantHealth, the two companies will work together to develop a smartphone that caters to the needs of the health care sector, optimized for viewing CT scans and 3D images. BlackBerry's secure devices and QNX-embedded technology will allow NantHealth to improve and scale its cloud-based medical platform, "putting the power of a supercomputer in the palm of the caregiver's hand," as Soon-Shiong says. This can have profound effects in improving diagnoses and the efficiency of health care, which would mean big profits for BlackBerry.

What about the other guys?
According to BlackBerry's head of strategic planning, Jim Mackey, this new smartphone will be "available for all." Don't expect a mass of consumers flocking from Apple's iPhone and Google's (NASDAQ:GOOG) Android-powered devices to a new BlackBerry smartphone, as it doesn't seem like that's BlackBerry's intention.

There has been a lot of talk recently about Google Glass, and its potential uses in health care. Dr. John Halamka reckons Glass can help with administering medication, clinical documentation, and decision support. More recently, a health IT company even developed a tele-medicine platform with Glass as its centerpiece.

Earlier this year, Apple met with the FDA to discuss the possibility of mobile medical devices. Shortly after, the company hired experts from digital health start-ups.

Conclusion
It seems that Google and Apple are also very interested in disrupting the health care industry with their respective technologies. With BlackBerry's investment in NantHealth, though, BlackBerry gets the first-mover advantage, as well as a proven and capable partner in Patrick Soon-Shiong and NantHealth. BlackBerry's days of stale innovation may now be over, and with this renewed focus on core-strengths I would recommend it a hold.

Are you ready to profit from this $14.4 trillion revolution?
Let's face it, every investor wants to get in on revolutionary ideas before they hit it big. Like buying PC-maker Dell in the late 1980s, before the consumer computing boom. Or purchasing stock in e-commerce pioneer Amazon.com in the late 1990s, when it was nothing more than an upstart online bookstore. The problem is, most investors don't understand the key to investing in hyper-growth markets. The real trick is to find a small-cap "pure-play" and then watch as it grows in EXPLOSIVE lockstep with its industry. Our expert team of equity analysts has identified one stock that's poised to produce rocket-ship returns with the next $14.4 TRILLION industry. Click here to get the full story in this eye-opening report.

Haris Qureshi has no position in any stocks mentioned. The Motley Fool recommends Apple and Google-Class C Shares. The Motley Fool owns shares of Apple, Google-Class C Shares, and 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.

1 Key Step to Get Rich

Our mission at The Motley Fool is to help the world invest better. Whether that’s helping people overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we can help.

Feb 1, 2016 at 4:54PM

To be perfectly clear, this is not a get-rich action that my Foolish colleagues and I came up with. But we wouldn't argue with the approach.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich" rated The Motley Fool as the #1 place online to get smarter about investing.

"The Motley Fool aims to build a strong investment community, which it does by providing a variety of resources: the website, books, a newspaper column, a radio [show], and [newsletters]," wrote (the clearly insightful and talented) money reporter Kathleen Elkins. "This site has something for every type of investor, from basic lessons for beginners to investing commentary on mutual funds, stock sectors, and value for the more advanced."

Our mission at The Motley Fool is to help the world invest better, so it's nice to receive that kind of recognition. It lets us know we're doing our job.

Whether that's helping the entirely uninitiated overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we want to provide our readers with a boost to the next step on their journey to financial independence.

Articles and beyond

As Business Insider wrote, there are a number of resources available from the Fool for investors of all levels and styles.

In addition to the dozens of free articles we publish every day on our website, I want to highlight two must-see spots in your tour of fool.com.

For the beginning investor

Investing can seem like a Big Deal to those who have yet to buy their first stock. Many investment professionals try to infuse the conversation with jargon in order to deter individual investors from tackling it on their own (and to justify their often sky-high fees).

But the individual investor can beat the market. The real secret to investing is that it doesn't take tons of money, endless hours, or super-secret formulas that only experts possess.

That's why we created a best-selling guide that walks investors-to-be through everything they need to know to get started. And because we're so dedicated to our mission, we've made that available for free.

If you're just starting out (or want to help out someone who is), go to www.fool.com/beginners, drop in your email address, and you'll be able to instantly access the quick-read guide ... for free.

For the listener

Whether it's on the stationary exercise bike or during my daily commute, I spend a lot of time going nowhere. But I've found a way to make that time benefit me.

The Motley Fool offers five podcasts that I refer to as "binge-worthy financial information."

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. It's also featured on several dozen radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable ... and I don't say that simply because the hosts all sit within a Nerf-gun shot of my desk. Rule Breaker Investing and Answers contain timeless advice, so you might want to go back to the beginning with those. The other three take their cues from the market, so you'll want to listen to the most recent first. All are available at www.fool.com/podcasts.

But wait, there's more

The book and the podcasts – both free ... both awesome – also come with an ongoing benefit. If you download the book, or if you enter your email address in the magical box at the podcasts page, you'll get ongoing market coverage sent straight to your inbox.

Investor Insights is valuable and enjoyable coverage of everything from macroeconomic events to investing strategies to our analyst's travels around the world to find the next big thing. Also free.

Get the book. Listen to a podcast. Sign up for Investor Insights. I'm not saying that any of those things will make you rich ... but Business Insider seems to think so.


Compare Brokers