It's here, the future of software-defined vehicles, built by BlackBerry to ensure you're future-ready today and for years to come. With the latest BlackBerry IVY design win, customers are leveraging its data platform at the edge and in the cloud. Through early access availability of our hypervisor in the cloud, we're adding to our available QNX real-time operating system. As for acoustics, we've launched QNX Sound, empowering designers and engineers to develop immersive software-defined audio experiences. And finally, the launch of our next generation QNX Software Development Platform 8.0, our highest performance real-time operating system ever, that scales on the latest high-powered multi-core chipsets. SDP 8.0 is designed to enable software developers in automotive, robotics, medical, industrial, and beyond. Together, we'll harness the power and opportunities of processor advancements for now and generations to come.
Because BlackBerry QNX isn't just leading the future, we're enabling you to be future-ready. Join us as our ride into the future begins now. Without further ado, here's Tim Foote, Vice President, Investor Relations, to share more.
Hello, everyone, and welcome to the BlackBerry IoT booth here in Las Vegas at CES. I'm delighted, as always, to have you join us. With me today, I've got Mattias Eriksson, President-
Thank you
... of the business unit. Hi, Mattias, how are you doing?
Doing fine. Thank you, Tim.
I've got Mr. QNX, or the head of BlackBerry QNX, John Wall. Hi, John.
Hello.
We've got Vito Giallorenzo, the head of BlackBerry IVY. We want this to be an interactive session, so everyone here in the room with us here at the booth, please feel free to ask your questions. We've got a mic runner, who'll get a mic to you if you do, so please just raise your hand. Everyone online, if you can please put your questions into the Q&A box at the bottom of the screen, that would be marvelous. We may not get to all of them, but we'll try and get through as many as we can in the time that we have. Okay, let's begin. Mattias, lots of press releases, lots of news here at CES from BlackBerry. For the benefit of everyone in the room and online, which one should we be thinking about most?
Which are the most important?
So you're sort of asking us to pick among our children? Yeah, yeah.
Exactly. That's it, yeah.
No, this is a continuity story. I hope you have a chance to go down on the floor and talk to the team directly. The big ones are, first of all, we have GA'd SDP 8, and John will tell you more about the importance of that. I think you all understand how critical that release is. 10 years since we did the last major release, four years in the making. Major, major, step change overall. The second one, which I, I think I've gotten the most attention for, is the announcement we made around execution on the cloud. So last year, we talked about putting QNX in the cloud. This year, for those of you who paid attention, we have a joint announcement with Stellantis and AWS around really making a major step forward for this notion of having edge cloud parity.
And you saw the quote from Stellantis, 100x improvement in cycle speed. I mean, this, we believe, is a major, major step change and much more to come. And then, obviously, we have a couple of other that are also important, QNX Sound. As you know, we have very significant sound capabilities. We have now consolidated that into one offering. We actually have our first major OEM win. I cannot tell you who it is, but we are very, very excited about it. We believe it's a fantastic solution. We believe it's the only one on the market, and we are in execution mode for that. And then last but not least, you know, you can see the execution for IVY. There are a number of partners downstairs. They have moved the needle on it.
We are in execution in a number of POCs, and we have another announcement that have gone out around our second design win. So there's a lot here. Many children.
Very good. Very good. We'll try and delve into a little bit more detail. So, given the importance, I'll bring John in, the importance of SDP 8.0, just what exactly has been announced, and why should everyone be so excited about it?
So the importance of SDP 8.0 is performance, in a nutshell. The cars are moving to higher performance compute. We're starting to see chips that will have four cores, eight cores, 16 cores. We need to be able to scale in performance with those chipsets. The car companies pay a lot of money for those chips, so they expect to see the performance from those chips. This is critical that we've been able to maintain backwards compatibility with the previous version of the operating system, so no heavy lift to move to SDP 8.0. We've been able to maintain the functional safety certification. The design has been approved. We're in the process of getting it certified, and we've improved the security capabilities of the product. So this is a future-proof product for us. It's the foundation of everything we do.
Our hypervisor is based on this, our hypervisor for safety is based on this, and our OS for safety is based on this. They will all benefit from these improvements of performance, but the key being, we did surgical work. The core of the operating system is the same, and so the lift is very easy to move to this version.
So, just following on from that, when people talk about QNX, to me, safety is kind of seen as the moat. It's the thing that defines QNX. So we're talking performance here. Outside of safety, we hear a lot about Linux. So how does this position QNX versus Linux, for instance?
So Linux was the North Star that we were going after from a performance perspective. I think it puts us in a very good position where the moat is deeper now, because there's not, and this is something that people tend to forget, we're also a real-time operating system. So when you're talking about systems within the vehicle, real time matters, and what, what we mean by real time is determinism, jitter, very low jitter. So now that we have the performance, I feel like the customer is not making a trade-off. It's a win-win to go with QNX.
Marvelous. Any questions in the room at this point? Okay, so I'll keep going. So in terms of from a financial perspective then, John, so would this be accretive in terms of revenue, margins? How should we be thinking about this release?
So we have developed a number of new business models with SDP 8.0 that are based on core count, for instance. There's also an uplift to move to SDP 8.0. We feel that the performance benefits, the ability to extract maximum performance from the silicon while maintaining safety and security, has a value. Now, as you know, Tim, I'm not allowed to talk about numbers.
Yeah, that's probably best. Okay,
But, I mean, you're absolutely right, and we're not here to talk about numbers, but the way to think about it, we start an upgrade cycle. So you're putting a new platform out there. It provides significantly more value. There's no trade-off anymore on the performance side. You have all the safety and security benefits. You're starting an upgrade cycle. What John is hinting at is, it's a software development platform, so because it's GA, doesn't mean the car is shipped tomorrow. So the work starts now, but this is the start of an upgrade cycle, and of course, it's gonna be accretive.
Yeah.
Excellent. Okay, not seeing any hands, so I'm gonna continue for now. So let's switch to cloud. So we announced a little while back that the real-time operating system, the RTOS, is available in the cloud, John. And we announced now that the hypervisor has joined it. So what does that mean in reality, and how significant is that as a development for QNX?
This is major going into the future. This is how software development is going to be done. You're gonna see more and more emulation in the cloud for peripherals. You're gonna see more and more development being done. If you look at a complex development for a car, you're talking about distributed teams all over the world. I've been part of these programs where software versions are not matching, people have the wrong tools. This is a way of centralizing your development. You know, maybe today you can do 50% of your development, you know, then you still have to do the development on the actual hardware. But this is gonna continue to iterate, and this is gonna be a major time-to-market value for the end customer, and this is the future of software development.
It is critical that our products are running in the cloud, because now the customer, the foundational software that's running in the car is running in the cloud. It's not modified. It's exactly the same product.
Is this another step forward in what we talk about reducing developer friction, just making QNX much more friendly to the developer community?
That's definitely one aspect, but if you look at the Stellantis PR that came out yesterday, the workbench, the way that we integrate our tools, the way that we are able to provide our artifacts, safety artifacts, security artifacts, CVEs, SKUs, tools, this is also a big part of what we're doing. It's on the tooling side, and it's on the actual target side in the cloud.
Yep, we got a question over there. Can we get a mic over to Shreyas?
Thanks. Two questions. One, when you talk about the kind of tools that are already pre-built into this, do we have a sense of how many, you know, is it 10, 20, 30, 40, and then can developers bring in their own? You know, 'cause I think in a lot of cases, OEMs have these distributed teams, as you mentioned, but they tend to also have, you know, maybe 150 tools that they're using. So can they do that?
Yeah, so the idea for us is we're not building an end-to-end CI/CD pipeline. What we're doing is we're providing interfaces to our products so that the customer can use whatever CI/CD pipeline they've developed and have easy access to pulling in our SKUs, like the operating system, the hypervisor, some of the artifacts they need for safety certification, but they're still in their environment, fully in their environment. Whatever tools they like, whatever way they want to develop, we're not influencing that. So to be clear, we're not selling a CI/CD pipeline, we're facilitating our products fitting into a CI/CD pipeline.
you know, once the developers, you know, develop in the cloud, and then it gets pushed into the vehicle, do you have, you know, the operating systems that you have on the vehicle, is it compatible with like a containerized approach so that it can be easily segmented or? Just curious about that.
Yeah. So again, just to be clear, what's running in the cloud, what's running in the car binary, it's the same binaries. So exactly the same. Yes, we're developing containers. We're currently working on OCI-compliant containers that we hope to have released by the end of the year. The thing that we're going to do is we're gonna focus on leveraging industry tools that be OCI-compliant, but ours will be safety certified, which is unique to QNX. And to be clear, these are containers for QNX? Yeah.
Okay, any other questions? Okay, so I'm gonna bring in Vito. So we had another design win for BlackBerry IVY. Obviously, good news. It's with MIH. I think there was an announcement with MIH not so long ago as well. So just wondered if you could expand on what the design win means and how, if anything, it relates to the previous one.
Yeah. So this announcement confirms selection of IVY for both their production vehicles, as well as MIH design and contract manufacturing platform to third OEM, to third-party OEMs. Before, I think they selected QNX, and they were evaluating IVY, so this is a new milestone that we achieved with them. It's very exciting for exactly two reasons. It's obviously a new OEM. They are producing their own EV vehicles. Actually, they have a list of vehicles that they're gonna produce starting in 2025, and you see, one of them there, but it's more. It's B2B, mainly commercial and, but also passenger, 3-, 6-, 9-seaters and some delivery trucks, too. But additionally, and possibly even more importantly, this is part of what Foxconn will offer to EV OEM as their manufacturing platform.
So we think it's a great customer OEM win, it's a great channel win because of Foxconn presence in Asia and globally. So very excited. We demoed three use cases, very fleet management-focused, them here and there. So it's a big step change. It's a big potential for IVY, so very excited about it.
Excellent. So just generally, in terms of progress that's being made with IVY, where do you think we are with this business right now, and where can we go?
So to tell you, the way we manage, the way we report IVY, when we talk to John, to the board, it's three components, right? It's platform progress at high level, go-to-market, which for us is channel and customer penetration, and ecosystem, because we think ecosystem is going to be important. So platform development, you know, we launched GA, which seems a lot of time ago, but it's six months ago, so relatively recently, but we achieved a lot. We have built a new release, which is the one that is going in production in China with Pateo very soon. So that continues to progress. We work with Amazon a lot. They renewed their commitment. They continue to work with us. So on the development side, going very well. Go-to-market, so new customer, lots of expanded POCs.
I think we mentioned it before, but it's—we have very large global automakers, we have commercial trucking, leading companies, we have Tier 1 . So as we would like to convert them and be able to talk about them sooner, but, you know, we see a great traction there, both in... As I said, it's channel and customers. And you see, I think we announced Mitsubishi Electric. They put it in their car. They're bringing a lot of customer along. You know, Bosch is here. So that go-to-market penetration is going very well in just six months since GA launch. And then the ecosystem has grown a lot. So we have...
I mean, we have 20 solutions packed between our floor, our booth and the other booth, and that's, that's a lot, and we did it in two months. We have, well, I think we have 40 customers, 40, 40 OEM partner that we have onboarded. We have a long list. So the ecosystem is growing well, and that brings a lot of value, the go-to-market. I mean, just the money we save by being able to do this, it's a lot. The impact we have by bringing to customer solutions they want to buy, it's a lot. So I think that's so those three things I think are going, are going pretty well, and that's how I would summarize three vectors of growth.
Excellent. So yesterday, I was showing some investors around the Jeep that we've got down there. It demonstrates how you can move away from physical sensors to software-defined sensors. This was talking about tire wear, for instance. Wondered if you could expand a little bit on some of the things we're showing down at the booth.
Yeah, so the wide range of solutions, right? So there is all around the operations of the vehicle. So tire wear, which I think you alluded to the Michelin use case. We have a lot of other ways to use software sensors, also brake wear, mass and load estimation, which is very important for fleet to know, you know, to estimate the state of charge, you know, to estimate the range, to obviously use the vehicles more efficiently. So they're all these sensors are expensive. I think Fredrik was telling me that a load sensor costs like $1,000. So compare that to the cost it takes you to just build a sensor with IVY, it's a big saving. And so I think there's that.
There's a lot of driver monitoring and passenger monitoring for personalization and also for safety. So I think you saw it in the booth. We identify the driver, then you can personalize the, the content with a company called Cinemo. We have a company called emotion3D and IDrive. So it's for that, but it's also for safety. Detect distraction, fatigue, drowsiness, for all this safety, I mean, safety in a different definition of safety, but a safety use cases. That's what also Mitsubishi Electric is showing. There's that. A lot of one very important a lot of customers have asked is first loss notification, so crash notification and forensic, so automate with Nexar.
Again, you use machine learning to detect the crash, but also to collect all and really streamline that painful insurance process that always happens. We have payments, we have cybersecurity with Upstream Security here and with VicOne, with MIH. Again, think of IVY being the endpoint security agent that can, in real time, run machine learning, detect a potential breach, and alert. Sure, I'm forgetting some, but we have a lot of system integrators, too. So Ricardo, Intellias at their booth. A lot of these system integrators are developing IVY capabilities, so they can offer it to their customers. I mean, I've heard from one of these partners yesterday that they've developed several use cases in their car. It took them one year to build a use case.
They said they started with IVY in late September, and they finished in early December. So they said, "I saved"—he, the guy who did it said he thought he needed to hire five to 10 people at least to do it, and it would take him maybe nine months. It took him two months, and he didn't have to hire anyone, because all the wrapping, all the integration was already done. So we hear good things from the ecosystem, and they are sometimes the best testimonials for us.
So I guess listening to what you say there, it's kinda like you're offering straight off the shelf, but also just demonstrating just how easy it is to develop your own custom experiences and services on IVY. So, 'cause one of the questions I get, Vito, is: Well, why would an OEM go down this path when they want to have their own unique software-defined experiences? But I guess IVY doesn't preclude them from doing that. In actual fact, it just makes it easier for them to do that.
Different customers want different things. I mean, we are working with a very large OEM. They want to buy IVY plus a lot of these solutions, which is great for us because we will resell them. Other, they want to build their own. Like, if you look at Mitsubishi Electric, they build their own solutions with IVY. IVY is a tool like QNX, and allows you to do both. I get the sense that a lot. The OEM SDV strategy is still not fully defined, and not many of these guys have figured out what they want to build, what they want to buy. And so the ability to offer a menu of solution and tailor it to what they need, it's what not all OEMs have the capabilities to use these tools.
And in that, in those cases, if you can go and show them and potentially sell them an end-to-end solution, it makes the go-to-market easier. Others, they don't need.
Shreyas? We'll come to you afterwards, Jeffrey, as, Shreyas just-
Thanks. Just picking up on that first point about software-defined sensors that you can enable, maybe could, I may not be as familiar, but can you maybe explain what, how that works? And do you have a sense of, like, how many potentially, how many sensors potentially could be either removed or made less complex? Any thoughts on that?
Yeah. So the concept is, there's a lot of hardware sensors. So you can build and buy a hardware sensor, install it in the car, and that sensor monitors things, like the example we made, the load of the car. Some other things actually cannot really be monitored with a sensor, like tire wear would be very convenient. And so you can replace that with an algorithm. So COMPREDICT does that, so you talk to them, too. I can introduce them. That's their business. And so you build machine learning models that use signals that are actually sensed in the car, speed, brake, acceleration, location, whatever it is, to predict the tire wear, or the behavior of a potential sensor that is now virtual.
So you have replaced what you had to build, a hardware with a virtual sensor. It's a huge cost savings for automakers. It's obviously a hard thing to do. It's the machine learning, data science aspect of it is pretty complicated, but if you can do it well, it's a big savings. Sorry, was there a second part to your question that I missed?
No, that was it.
Jeffrey?
Thanks for having me. Vito, a big challenge with fleets is mixed fleets, right? So a fleet operator will have multiple manufactured vehicles in their fleet. Do you see a world of IVY working across OEM, and have you gotten that request? And how hard would it be to actually do that?
That's, that's what I pitch them. Like, you need. So yes. So there are two ways to look at it. I think what we're doing with MIH. So a lot of these fleets have a fleet management system, they have a software. So, if you have IVY in your vehicle, so if the fleet can influence the automakers to deploy IVY, then, you know, IVY could be the connection to fleet management system. You have one fleet management system, the integration is very easy, you do it only once. So I think there are two ways of doing it. One is just working with fleets and with OEM to kind of make the case for IVY.
Yeah.
The other, it's also a little bit what MIH is doing, so you actually build from scratch. So you're—there are companies that are really targeting just fleet, that is MIH. I mean, if you talk to Jack at Foxconn, he thinks that's where the big opportunity is in the market. And so, you go after those newcomers that are only targeting fleet. They're starting today, they're more agile, and get IVY in there. But definitely, to solve that problem... Today, that problem is solved with aftermarket-... dongles, and they have all sort of, we do get a lot of requests sometimes, like, "Can you put IVY on an aftermarket device?" And it's not, it's not optimal.
So we really push the market for an embedded solution, and we think IVY is that solution.
Thank you.
Hello. Could you tell us what does success look like for IVY in 2024? I mean, I guess it's more contract wins, et cetera, but fast-forward a year from now, how would you look back and say, "That was a good year for IVY?" And secondly, as well, I think, you know, how are we pricing the product? And I think we probably asked that question a year ago, and it was still a work in progress, but how are you thinking about monetizing all this value add?
Yeah. So success is a good number of design wins. So it's coming here this year.
2, 10, 20?
I would say, I would say 20 would be too much, possibly. So at the speed of, I would say it's more kind of closer to a handful of design wins. And also having some big automaker announced, which is what we hope to be able to do. In terms of pricing, look, IVY, you know, what we are negotiating here, what we are signed here with our customers, it's a recurring revenue, so it's a subscription. The one that we have, for example, it's per car, per year. So as I said, that's one price, that's one typical price. It's very similar to a SaaS enterprise model. You pay me per car, per year subscription.
They commit to a certain number of years, and then after a certain number of years, they, you know, they either switch off the service or they need to renew the service. So very traditional and-
How much per car?
I don't think I'm supposed to say.
Yeah, we can't give that at this point. But-
But so the way... Sorry.
Yeah, I mean, obviously, it's a different model because this is per year, whereas QNX, the royalty is a one-time. So when you kind of add that and maybe do a discounted cash flow, in theory, it should be an uplift. But it's the importance of that regularity, the relationship with the vehicle post-production.
Again, the way I also like, when I do my own model, you know, I assume that that increases over time because I see automakers asking us to buy solutions from us, and so that increases the ARPU. And then the other model, which some automakers like, is the other one that it's usage-based. So you could also pay us for sensors deployed. That, I think it's we still think a very interesting one. I think a lot of them like it. It leaves lower the barrier to entry. It seems when the rubber hits the road, automakers just like the predictability of knowing at least that's what I pay you per year. So we are offering that.
I have to say, a lot of the response seems to be going towards the more fixed per car, per year model. The way we price it is that that gives you a certain amount of sensors, so if then they hit above a certain number, then they will need to pay us that additional for consumption. That's the, that's how the pricing model justify a potential increase over time inside that same production.
This should be 2026, we start to see this, revenue coming through?
The revenue's coming, is gonna come through very soon, too. For example, from Dongfeng, that production is starting very soon.
Yeah.
It's small, so that I don't think it would be appropriate to report it separate, but that revenue is starting now. For example, Dongfeng, MIH, Foxconn, they're gonna produce starting 2025. But yeah, all the production of this type of SDV next gen projects are all talking 2025, 2026. So there is, and Mattias talked about it a lot, there is this structural kind of push in the industry. I mean, we're seeing obviously push for more standard things like cockpit and ADAS. You can only imagine what that means for more revolutionary things like IVY and platform. So I think I would look at for us that ramp up will start in kind of late 2025 and then 2026.
Like, the contracts you'll win this year, that should kick in 2026. Is that roughly the lead time, kind of a couple of years?
Yeah, I think so.
Yeah.
Yeah.
Great. Paul, did you have a question? I thought I saw... Thank you, Niall.
Just in regards to the POCs, can you give us some sense of the feedback you were getting from OEMs, like in terms of the reasons you win, and then conversely, or what are the reasons that you may not win?
So, I would say the reason we win, what they like is, first of all, as I said, the speed, the simplicity of doing all the middleware, the integration, the wrapping of the sensors. I think they realize when they start doing it, that it's a lot of work, and it's undifferentiated work, and so they do it around. So the fact that they actually sit in place, and it works, and it's easy to deploy, so I think that's good feedback. As I mentioned, the one that said it took me what? 2 to 1 year instead, you know, with IVY, it took me 2 months. It's the same feedback we got from many of our ecosystem partner. So it's the speed, and the savings in terms of R&D.
The other reason is the cost savings in production. So some automakers have realized that they build these solutions all using cloud, streaming all the data to the cloud, and they work. They can demonstrate to their customers—you know, executive—and it's so great. When someone actually goes and does the number on insurance solution, driver score, they realize that the connectivity and cloud cost of streaming everything to the cloud, processing everything in some cloud and streaming back, it's massive. So they look at this. This is a large OEM. They looked at this cost and say, "Okay, these services will be unprofitable." And so with IVY, the ability to push all that processing inside the edge, with chipset compute that you have already paid and no connectivity, improve.
So the improvement in really profitability of the service was another reason. I think the reason why sometimes there could be hesitation, it's typically: This is great, do we do it for the current production, or do we do it for the next production? So it's a next-gen capabilities, and sometimes when they're rushed, when they're late, they're kind of stripping off things to meet the production. Something like IVY, which is next gen, they don't need, because what you do, you squeeze few services that are there without a platform that allows you to put more, and you go to production. So I think it's usually a production rush a little bit.
Some other time is, in some OEMs, especially the very, very large ones, there's still this debate about, "This is great, it works, but should we do it ourselves?" There is always some engineer somewhere in the organization who said, "Oh, I can build it if you give me 500 people, 300 people." And so I think, I think some companies, maybe I'm a bit extrapolating what I hear, but some companies might still be debating whether they should really do everything, everything themselves, including the middleware. I, I would say those are the two reasons posing.
Great. So, before I come to you, Will, Mattias, so we've spoken about the thesis around more sockets, more layers. So more sockets, QNX running in more domains in the car, more layers, you're adding on extra items. So we announced QNX Sound here at CES. I wondered if you could explain what it is, and why, why it matters really, and what the significance is.
Yeah, that's a great question, and if you haven't spent any time with the team on sound, please take 10 minutes and make sure you get the rundown. So the way to think about it, there's a lot of sound components in the car. A modern car has a number of things that are tied to the sound experience. So whether it's, you know, managing the voice recognition, in-car communication, road noise cancellation, the audio and media management, there are lots and lots of sound components in the car. How has that been implemented traditionally? Well, traditionally, they've bought boxes from a number of different vendors, dedicated amplifiers, DSP, specific software written for that hardware, and it's spread out in the OEM across multiple different departments.
We have a very significant capability that, John Wall invested in many, many years ago, arguably a little bit early, but, you know, we invested for a long time, and we believed it was gonna come. And what we have done with QNX Sound this year and formalized in a product portfolio is we have taken all those capabilities, and we've pulled them together, there are a number of modules, you will hear the team talk about it, into one platform. And that platform, for someone that is progressive in how they are addressing sound in the architecture in the future, is gonna reside either in an HPC compute domain or in a consolidated Digital Cockpit. And what is the beauty here?
The beauty is you're moving to software-defined sound management, and you're consolidating it on a Digital Cockpit, which the vast majority already have QNX sitting at the bottom of it, huh? It's by far the best sound software platform today in the market. It saves cost, it provides a much easier way of deploying and optimizing the sound experience, and we actually. I don't think we have announced it. We have our first OEM win. We cannot tell you who it is for this platform, and we are very excited. It fits very nicely into this more layers story, and we have staffed the team last year with upper money.
Marvelous. Will, I think you had a question?
So I'm curious about how, you know, delays, slowing, pushing out of OEMs on their own software development impacts, whether it's QNX or IVY and your own development. Does that make it more difficult to work with partners and develop new use cases, or is it more so you're able to kind of do your own thing in the background and wait for that spending to come back on the OEM side?
It doesn't actually impact at all. Our teams have lots of work. What it does do is it creates an opportunity. These delays are caused by... these delays, it's very well known what's causing these delays. It's taking on the integration role and having a lot of difficulty managing a bunch of suppliers, building layers on top of layers, on top of layers, creating performance problems, quality problems. So it's an opportunity now to talk to the OEMs about, "Hey, maybe it's time that we provide a little bit more integrated into the operating system, that you've been adding layers." Now, we can do a much more efficient job by bringing these layers into QNX using the native IPC, integrating schedulers and things like that directly into the kernel.
And so, you know, when we talk about more layers increasing the ARPU, we see it as an opportunity. The last two years has been an experience. I think the OEMs have struggled with: Where do I need to own software? What's the value of software? For me, very much to what Vito said, the value should be the light that you can give your customers, not working on a hypervisor. And so we see that there's an opportunity maybe to do more and to provide more of a platform that's ready for applications.
But I agree with John, and I think my silver lining of all of this is that it's a delay, but it really helps leaders, decision-makers at the OEM, understanding that delay over delay over delay, at some point, you said, "Hey, that undifferentiated middleware stuff, why don't you go and get it from BlackBerry? It works. It's there. It you know, we don't need, we don't need 1,000 engineers. We need, you know, few dollars to buy-
We're seeing that shift.
It's happening.
We're seeing that shift.
So it's good, but it's delayed. Delayed.
Could we get a mic to Ian here at the front here? Thank you.
Hi. Question about QNX Sound. A lot of the sound discussions I've had recently, and it might just be me, have been about external sound, external microphones, external speakers. Is that part of the QNX Sound vision as well? 'Cause most of the stuff is, to date, has talked about interior applications.
Yes, that's part of it as well.
They're often safety-critical apps-
Ab- absolutely.
Very much your wheelhouse.
We have actually safety-certified chimes.
Okay.
You know, the disconnecting of automated driving to the driver having to take over. Believe it or not, that chime needs to be safety certified. So obviously, that's our pedigree.
Yeah.
You know, and one of the things that Mattias talked about, all these different sound components within the vehicle and the external of the vehicle, is some cases you're taking away sound, in some cases you're making sound.
Mm-hmm.
This centralization of all these components, we have a tool that allows for very easy tuning. If these are all separate boxes, this is a lot of work to bring this all together.
I-
I'm removing sound, but I'm adding sound.
Then that's a related question. You said, Mattias, that these are separate boxes, were separate boxes, which typically would have multiple of different people at your customer. And so in similar products I've talked to companies, their number one challenge has actually been finding the one person I can sell it to, rather than trying to sell it to ten people simultaneously. Is that a problem? How are you getting around it?
So that is a critical comment, and maybe I'm gonna state things now that are obvious for everybody. When you think about the theme here, as you think about, start with sound. Sound today in an OEM is spread out across multiple departments. If you are the head of software and you decide that you're gonna change this architecture to reduce friction and speed things up and take costs out and all of those things, you're gonna have to reorganize. And that is at the heart of the challenge we have across the go-to-market motion, whether it's sound, whether it's IVY, whether it's the foundational software that John is making.
What we're basically saying, if you really wanna make progress, if you wanna take costs out, you wanna become faster, you need to get out of the underwear of software, whether it's the underwear for sound or foundational software or IVY. Buy that. Use your engineers higher up in the stack on stuff that actually matters for the consumer. And why does it resonate? Well, you go to... And I, I don't point at anyone in particular, but go to any OEM and look at what has happened in the last 12 months. Everybody, they are behind. They're all behind now, and that is the opportunity, but it's also the challenge. Our solutions are striking at the heart of the software organization within the OEM, so.
Yep. Trey, down here. Thank you.
Curious, how your solutions help with the ability to update, you know, existing software without having to go through very long revalidation processes, which I think, you know, like some of these automakers think of ADAS applications, right? If they want to even make one adjustment to, you know, lane keep assist, it's you have to revalidate everything in the system, and it takes forever. So how... You know, I'm curious if you, if your approach can help address that?
Yeah, absolutely, that is a challenge, there's no question about it. And I've heard that from the OEMs, and that is something that we are working with the OEMs to help with. The very nature of QNX being a microkernel operating system means we don't have to replace a large portion of our product for an update or to address a problem. The way we do safety is we're very targeted in safety. We are, because we're a SEooC, so we're safety certified out of context, we work with the OEMs. And a lot of people think when you're building a safety system, everything in the system has to be safety certified. That's not the case. You work with the OEMs, you work with the Tier 1 or whoever you're the integrator, and you define the safety case.
We do a lot of work with the OEMs on the safety case. We try to minimize the amount of work that they need to do in that area, to prevent or to allow them to be able to update parts of the vehicle without impacting safety case. This is really the challenge of SDP going forward. If you're going to be delivering new workloads to the car, that's not how car companies work today. Car companies work today, they create a load, it's gold master, they hope never have to revisit it again. The big challenge going into the future is how do you have mixed criticality systems, systems that have safety and systems that don't have safety? How do I introduce a new workload and not impact the safety? That's an ongoing thing.
Okay, conscious of the time, so we've got time for two more. So John, QNX Everywhere, so it was a press release today. I just wanted to touch on that and just make sure that people heard why it's important.
... Yeah, so this is the most exciting thing for me that I'm allowed to talk about. So QNX Everywhere is the concept of allowing QNX to be available for free for non-commercial use, broadly, with no barriers to entry. It's also our first starting point of open sourcing, and to have it more and more in the community. And the reason that we're doing this and why this is so important, when I speak to OEMs, one of the things that they really appreciate about Linux is the ecosystem. Ecosystem is massive for Linux. It means when they're hiring engineers, find engineers that are well-versed in Linux. Even though QNX isn't very different from an application perspective, they still feel that we're not out there broadly enough.
I also think that people believe we're closed, so if we wanna have a bigger footprint, take on more of the platform within the vehicle, we have to have more transparency. So we are going to start the process of making it available for free on commercial use. Business model is not changing for commercial use, and then gradually open sourcing the product as well.
Wonderful. Okay, last question. So, Mattias, so despite we've mentioned here about programs shifting out to the right, obviously, people have heard about the impact of the UAW strikes. There's some general macro uncertainty, but despite all of that, we still expect Q4 to be a record in terms of revenue ever for the IoT business unit. So how are you feeling about this business going into our next fiscal year, FY 25, and what are your priorities?
Yeah. So lots of topics there. Let me be brief, and let's see what questions comes back. So first of all, I feel great about going into next year. We have never been stronger. What is the elephant in the room? The elephant in the room is this year is a horrible financial disappointment for us as a business unit. We are behind all our financial targets. We made significant reductions in the investment level, but in spite of that, we have executed on the greatest product launch year in a decade. We have record design wins for the second year in a row, and if I think about the discussions we're having, and we've touched upon some of them at present with customers and partners, everybody's asking for more.
So the way we have talked about it and the way to think about it is there, there's a growth curve, not just for ADAS and DC, but also for the next generation, compute domains, so HPC, zonal, the gateway, whatever it is, that has shifted to the right. And what we are trying to do is help them shift to the left. So, you know, there's this tension between the short-term pain and the long-term gain. To answer your question, I've never felt better. Our position is much stronger this year than it was at last year's CES. We have made significant progress.
We have a number of very exciting things on the docket for next year, and we'll come back and talk about them, you know, as we close out the year, and then we have Analyst Summit and so forth. John has mentioned one, a couple of others that we would like to put forward, but not in this forum.
Wonderful. Okay, well, thank you everyone. Thank you everyone in the room for your questions and for coming. Thank you everyone for tuning in online. Sorry, we didn't get to all your questions, but we'll try and take up some of those offline. So, with that, thank you, and have a great day.