From the Ashes of Mobile, Blackberry's Unlikely Comeback

BlackBerry (BB 1.09%) is usually known as the fallen smartphone giant that Apple and Google obliterated over the past few years. Indeed, that fall was epic: BlackBerry's global market share in smartphones plunged from 50% in 2009 to less than 1% at the end of 2013.

Yet not all hope is lost for BlackBerry. Although BlackBerry has failed to stage a comeback in high-end smartphones, it is still investing in other growing markets, such as health care.

In April, BlackBerry acquired a minority stake in U.S. health tech firm NantHealth, which the company will work with to launch a health care services platform for hospitals in India. The platform is currently installed at roughly 250 hospitals across the world and connects to over 16,000 medical devices which collect more than 3 billion vital signs per year. The system collects patient data in a cloud-based server, and utilizes that knowledge base for decision support, analytics, payment systems, and other purposes.

It's all about QNX
NantHealth's platform will run on QNX, BlackBerry's embedded operating system. QNX not only powers BB10 devices, but it is installed in Internet routers, flight simulators, air traffic control systems, shipping navigation systems, medical imaging devices, and many other machines. QNX also powers over half of all car infotainment systems worldwide, and both Apple's CarPlay and Google's Android Auto mirroring systems run on top of QNX.

Apple's CarPlay. Source: Wikimedia Commons

QNX is popular for two reasons: flexibility and security. QNX is compatible with a wide array of open source technologies -- such as Android, Java, HTML5, and OpenGL ES -- making it an easy platform to develop applications for. Meanwhile, the fact that BlackBerries currently account for 90% of the U.S. military's mobile devices proves the security of QNX.

QNX's main rival in embedded operating systems is Microsoft's (MSFT -1.84%) Windows Embedded. Windows Embedded is the polar opposite of QNX -- it is both difficult to modify and insecure. A 2012 report from MIT Technology Review stated that malware across network-connected Windows Embedded devices in hospitals was "rampant" and noted that the "locked down" nature of Windows Embedded made it nearly impossible to deal with threats.

A secure foundation for iOS and Android in hospitals
To understand the future of QNX in hospitals, we should consider how it works in cars. CarPlay and Android Auto are not operating systems -- they merely "hook" onto QNX's underlying operating system in vehicles. When the driver takes a seat in the vehicle, his or her iPhone or Android device is mirrored onto the dashboard's touchscreen with an optimized view.

Since smartphone and tablet use has risen in hospitals thanks to the relaxation of BYOD (bring your own device) policies, we can think of the QNX medical devices as "cars" and doctors as "drivers." In the future, a doctor could enter an operating room with the patient's data on an iPad, set it down, and have its display mirrored directly onto an overhead display. QNX devices could also communicate with Google Glass, in the same way Philips' IntelliVue patient monitoring devices interacted with Glass during its proof-of-concept demonstration last October.

QNX's "military grade" security will also make it a reliable foundation for iOS and Android devices to be used in hospitals, which have been hit by a surge in data breaches over the past few years. Considering that those data breaches can result in steep fines (up to $50,000 per patient) under HIPAA rules, it makes sense for hospitals to install QNX-based systems like NantHealth's platform as a more secure alternative to Windows Embedded-based systems.

The Foolish takeaway
The spread of QNX in hospitals will help BlackBerry grow its market share in cross-platform management devices, a business that centers on BES (BlackBerry Enterprise Service) -- a "control panel" that allows businesses to monitor their employees' BlackBerry, iOS, and Android devices. The next version, BES12, will also support Windows Phone 8.

Through the partnership with NantHealth, BlackBerry is emerging out of the background and taking a more active role in health care IT. To complement its new health care platform, BlackBerry has recently launched BBM Protected -- a secure communication platform for health care providers, field service workers, emergency personnel, patients, and family members.

BlackBerry's foray into health care is still in its infancy, but it's a step in the right direction. Instead of wasting more money battling Apple and Google, CEO John Chen is expanding into the fragmented medical market by promoting the company's biggest strength: the underlying security of its operating systems.