RIM buys software company that delivers Internet services to cars

MONTREAL — Internet-connected cars will be a new frontier for BlackBerry maker Research In Motion with its purchase of an Ottawa-based software company that specializes in the technology.

MONTREAL — Internet-connected cars will be a new frontier for BlackBerry maker Research In Motion with its purchase of an Ottawa-based software company that specializes in the technology.

RIM (TSX:RIM) announced Friday that it’s buying QNX Software Systems, which has developed real-time operating systems embedded in vehicle entertainment systems that allow Internet surfing, video streaming and navigation services.

“RIM clearly sees the car as the next frontier which it needs to bring the BlackBerry to,” IDC Canada analyst Kevin Restivo said from Toronto.

That could mean streaming video, games and other software applications from the BlackBerry to a screen or dashboard in the vehicle, said Restivo, IDC Canada’s lead analyst for its mobile phone tracker program.

Consumers also could have their emails read to them from a BlackBerry without the help of another device and get real-time traffic and weather updates, he said.

“Pretty much any application you could imagine on a BlackBerry, I think, with this acquisition could potentially be displayed or used in the car,” he said, adding that Bluetooth short range wireless technology would help enable this.

Restivo noted the car is one of the few places where BlackBerry use isn’t really acceptable due to safety and hands-free driving laws.

The Waterloo, Ont. company wasn’t specific about how it will use QNX’s technology, but technology analyst Nick Agostino said the most obvious application would be responding to email, noting that many people are still trying to keep an eye on it while driving.

“It kind of tries to take the whole ‘Crackberry’ notion to the next level,” Agostino of Mackie Research Capital in Toronto said of having email seamlessly read and responded to on a BlackBerry while driving.

The BlackBerry maker acquired QNX for an undisclosed price from U.S.-based Harman International, a maker of audio and infotainment products used in the automotive and other markets.

RIM wasn’t specific about how it will use QNX’s technology.

“RIM is excited about the planned acquisition of QNX Software Systems and we look forward to ongoing collaboration between Harman, QNX and RIM to further integrate and enhance the user experience between smartphones and in-vehicle audio and infotainment systems,” co-CEO Mike Lazaridis said in a news release.

Internet-connected cars are already a reality with models from Ford and Chrysler and Restivo said the acquisition may end up giving RIM an edge over software giant Microsoft when it comes to in-vehicle technology.

Ford’s Sync voice-controlled system for hands-free calling and entertainment system is based on Microsoft technology.

RBC Capital Markets analyst Mike Abramsky estimated the value of the acquisition at $150 million to $200 million and noted that Harman acquired QNX for $138 million in 2004.

“We see nominal short-term impact from the acquisition; RIM may be able to more tightly integrate BlackBerry with vehicle telematics,” Abramsky wrote in a research note.

Both Restivo and Agostino said RIM may have other uses in mind for QNX’s technology such as the medical field where it could integrate its technology with devices to transmit information from “machine to machine.”

“I think it’s not just to leverage automotive, although it’s the first obvious one. I think it’s RIM’s way of going after other markets,” Agostino said.

Abramsky also added that, longer term, RIM may be interested in combining QNX’s operating system called Neutrino with its BlackBerry software to create “an efficient low-footprint platform for low-end and new form factor devices” such as inexpensive smartphones as well as computer tablets.

Last June, RIM acquired U.S.-based Dash Technology, known for its GPS and real-time traffic technology.

Shares in Research In Motion closed up 45 cents at $70.25 in trading Friday on the Toronto Stock Exchange.

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