The total addressable market (TAM) for Internet of Things (IoT) applications is expected to grow between 8% and 10% over the next three years, Blackberry Executive Chairman and Chief Executive Officer John Chen said Thursday, June 23 during the company’s quarterly earnings call.
BlackBerry’s own IoT revenue should have a compound annual growth rate (CAGR) of 20% over five years, Chen said, adding that this target does not include revenue from IVY, the vehicle data platform. intelligence co-developed with Amazon Web Services. (AWS).
“This faster-than-market growth rate is primarily due to market share gains in our core safety-critical automotive areas,” Chen said on the call. “In addition to automotive, we also expect growth in adjacent verticals, particularly medical and industrial, expanding our addressable market.”
Focus on high-end electric vehicles
In the quarter ending May 31, BlackBerry’s IoT business unit reported 19% year-over-year revenue growth. The company also said its QNX software for connected cars is now embedded in 215 million vehicles worldwide, up 20 million from the previous year.
During the call, Chen said the supply chain situation appears to be stabilizing and economic issues that will affect the entire auto market have less impact on high-end models and electric vehicles. – two vehicle categories that are more likely than lower – end models to include BlackBerry’s QNX software.
“Each of the [the original equipment manufacturers] has its own strategy, but I see it more suited to high-end cars being built – that they are able to manage their supply chain problem and build and market cars that are more valuable to them said Chen.
Twenty-four of the top 25 electric vehicle producers, by production volume, are using QNX in their vehicles, Chen said, adding that electric vehicle sales are expected to continue to increase due to current gas prices and concerns about the environment.
“As the sales volume increases, although it is only a small percentage of the total vehicles sold, we are seeing an increase in volume,” Chen said. “So it’s a good trend for us.”
Enable a growing number of use cases
Citing estimates from independent automotive analyst Strategy Analytics, Chen said the three-year growth rate of the advanced driver assistance systems (ADAS) market is estimated at 29 percent and that of the digital cockpit market. should be 40%.
“In these areas, we expect to grow even faster than this as we continue to gain market share,” Chen said.
Providing an update on IVY’s development, Chen said BlackBerry has begun a number of proof-of-concept (POC) trials with automakers and Tier 1 suppliers and continues to receive additional inquiries. He said the June release of the product supports additional sensors and hardware.
“Progress is also being made on the application ecosystem side, and we are currently engaging with several potential partners,” Chen said. “These partners enable a wide variety of exciting use cases, including AI-based battery management, predictive maintenance, and usage-based insurance, to name a few. “
The pay-as-you-go model has grown in the auto insurance industry, Chen noted. Other use cases for the IVY platform include helping OEMs deliver over-the-air software updates and deploying fintech to enable “auto-as-wallet.” .