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BlackBerry takes another step from consumer market with Amazon app store deal

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TORONTO - BlackBerry Ltd. (TSX:BB) will add the Amazon Appstore in the next update to its operating system this fall and close down its own music and video download sales this summer as it moves away from consumer-oriented products and services.

The smartphone company, which has struggled against Apple's iPhone and smartphones using the Android operating system, has been criticized for the lack of software applications available for its devices.

"Making the Amazon Appstore available on BlackBerry 10 devices will help BlackBerry continue to meet two essential needs: greater app availability for our smartphone users and enhanced productivity solutions for enterprises," BlackBerry executive chairman and CEO John Chen said in a statement Wednesday.

Chen wrote in a blog post on the BlackBerry website, saying the company would close its own music and video sections on BlackBerry World on July 21 — but added that similar services from third-party suppliers would be available.

Jitesh Ubrani, who covers the mobile devices industry for market research firm IDC Canada, said the move will help BlackBerry by saving "time, energy and money. And that's something they really need to focus on."

However, Ubrani said the app store deal will probably have only a limited impact on efforts to turn around BlackBerry, which is also fending off challenges to its share of the enterprise market — even in its home country.

"Enterprise in Canada has been a little slower to move away from BlackBerry compared to parts of the world, where they've shifted away from BlackBerry fairly quickly," Ubrani said.

"That's not to say they aren't moving at all. (Apple) iOS and Google (Android) are picking up market share, even in Canada, and that will continue."

BlackBerry's announcement came just hours before Amazon.com (Nasdaq:AMZN) announced its long-anticipated Fire Phone, the online retailer's entry into the smartphone market.

BlackBerry is expected to release its latest financial report on Thursday before markets open. It will hold its shareholders meeting later in the day in Waterloo.

Analysts are expecting that the company to report lower revenue and an adjusted loss for its first quarter. Estimates compiled by Thomson Reuters suggest analysts on average expect an adjusted loss of 24 cents US per share and US$998.2 million in revenue.

BlackBerry's first-quarter revenue last year was US$3.07 billion. It also had an adjusted loss of 13 cents US per share.

Chen's predecessor, Thorsten Heins, attempted to satisfy both the consumer market and its original base in the business and public sectors with a new generation of smartphones that had been in the works under co-CEOs Mike Lazaridis and Jim Balsillie.

However, the BlackBerry 10 products failed to catch on, revenues dropped and the company underwent a several months of intense uncertainty as its board of directors looked at strategic options.

BlackBerry decided to continue as an independent company under Chen, who has put more emphasis on its enterprise capabilities and its track record as a supplier to government agencies and businesses, especially those that need secure mobile communications.

BlackBerry recently signed a three-year mobile payment agreement with EnStream, a joint venture between Canada's three biggest telecom companies.

Under the partnership, BlackBerry will provide security technology that supports transactions made by customers through their mobile devices.

— Follow @DavidPaddon on Twitter.

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