December 19, 2016 / 8:34 PM / in a year

UPDATE 1-BlackBerry spending $75 million on autos hub over several years

(Adds two analyst comments, details, byline; updates share move)

By Alastair Sharp

OTTAWA, Dec 19 (Reuters) - Canada’s BlackBerry Ltd plans to invest C$100 million ($75 million) in a new autonomous vehicle testing hub over several years, the company’s chief executive said on Monday, as the fallen smartphone pioneer looks elsewhere for growth.

Most of the money will go to engineering jobs, possibly hundreds in coming years, John Chen told reporters at the Ottawa-area headquarters of its BlackBerry QNX subsidiary, with Prime Minister Justin Trudeau at his side.

The company, which is racing to increase software sales as its handset unit and related legacy service access fees shrink, hopes to make itself indispensable in the automotive industry’s looming self-driving arms race.

“One could make the argument that QNX is the strongest asset in their portfolio right now, so it’s refreshing to see this investment,” said IDC’s consumer mobility analyst Brian Haven.

But he said scaling the business and dealing with rivals with more money to throw at autonomous driving initiatives would be challenges for the company.

BlackBerry is hoping its security and safety credentials help it win a seat at the table as an array of automakers, chip and sensor providers and software developers work in competitive co-operation to bring self-driving cars to the mass market.

“It will require significant cooperation between all those involved to be sure that the end product and its communication configuration is both safe and secure for the individuals that use them and those sharing the road,” said David Masson, Canada country manager at cybersecurity firm Darktrace.

BlackBerry will initially work with middleware supplier PolySync and semiconductor company Renesas Electronics Corp , as well as its hometown University of Waterloo on its autonomous driving project, but hopes to welcome more companies to its Ottawa facility.

The company’s Toronto-listed shares were up 2.9 percent at C$10.40, after earlier rising as much as 4 percent to a one-month high.

The company’s QNX unit, renamed BlackBerry QNX, currently employs around 400 engineers, some three-quarters of them at its facility in Kanata on the outskirts of Ottawa.

BlackBerry has about 5,000 employees in total.

While the embedded operating system market is likely to grow quickly as autonomous driving takes off, BlackBerry faces numerous competitive threats, including from independent embedded operating system producer Green Hills Software as well as chipmakers such as Intel Corp.

It must also convince system integrators including former QNX owner Harman International Industries Inc that its offering is compelling.

$1 = 1.3392 Canadian dollars Reporting by Alastair Sharp in Ottawa; editing by Rod Nickel, Bernard Orr

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