BlackBerry strikes deal with Amazon for Appstore access

BlackBerry (NASDAQ:BBRY) announced a deal to gain access to the 240,000 apps and games in Amazon's (NASDAQ: AMZN) Appstore, greatly expanding the number of apps BlackBerry 10 customers can use. The agreement was announced hours ahead of what is expected to be a major foray by Amazon into the mobile market with the introduction of its first smartphone.

The deal is meant to give BlackBerry's platform a boost with access to popular apps such as Netflix (NASDAQ: NFLX), Groupon, Pinterest, Candy Crush Saga and Minecraft. "We can leverage what [Amazon] can offer," while Amazon gains access to BlackBerry's customer base, BlackBerry CEO John Chen told the Wall Street Journal.

BlackBerry said it will preload access to the Amazon Appstore with the launch of the BlackBerry 10.3 operating system this fall. Still, though the deal will boost BlackBerry's app catalog to around 370,000 apps, it still trails Apple (NASDAQ: AAPL) and Google (NASDAQ: GOOG) Play, which have more than 1 million apps each.

Chen has been trying to turn around BlackBerry by returning it to its enterprise heritage and focusing on security and business services while still not abandoning the devices business. The Amazon deal could take some pressure off BlackBerry to develop more consumer offerings. BlackBerry is set to report earnings Thursday and is projected by investors to post another financial loss amid the turnaround effort.

"I do not have to spend time, energy and money" developing apps that Amazon offers, Chen said. "Given I want to financially turn around the company and focus on the enterprise space, this is perfect for us."

Chen said he did not think an Amazon smartphone would hurt their partnership, "Our focuses are different," he said. "My devices are focused on the enterprise, highly secure," whereas the Amazon phone is aimed more at the consumer market, he said.

Meanwhile, rumors continue to float about Amazon's forthcoming smartphone, which the company is expected to announce at an event Wednesday in Seattle. Reports have indicated it will have s 3D display and could be designed to make it easier for consumers to make purchases through Amazon's retailing services.

According to a report from the Journal, which cited sources familiar with the plans, AT&T Mobility (NYSE: T) will be the exclusive operator to offer Amazon's smartphone, extending its existing relationship with Amazon, in which it provides cellular connectivity for Amazon's Kindle e-reader and tablets. In terms of other potential deals with carriers, the Financial Times reported, also according to unnamed sources, that Amazon is holding talks with European operators for the rights to get the phone, and has spoken to O2 and Vodafone in the UK. The companies declined to comment, according to the report.

Additionally, according to a Bloomberg Businessweek report, Amazon employees at Lab126, the company's secretive Silicon Valley hardware unit, have been working on a smartphone since 2009. The report, citing unnamed sources inside Lab126, said one of the inspirations for the phone was a video by hacker Johnny Chung Lee, who now works for Google and who showed that by reversing the position of sensors on the Nintendo Wii videogame console, a person could create a display that tracked their head and showed images that moved along with where they were standing. 

Amazon will reportedly use Omron's Okao Vision face-sensing technology for its 3D user interface, and sport four front-mounted infrared cameras to scan users' faces and movements. Those details appear consistent with actors' reactions in a video Amazon released to preview the device, which showed people moving their heads around to view something off-screen.

For more:
- see this release
- see this WSJ article (sub. req.)
- see this separate WSJ article (sub. req.)
- see this Reuters article
- see this separate Reuters article
- see this Bloomberg Businessweek article
- see this Bloomberg article
- see this FT article (sub. req.)

Related Articles:
Report: AT&T will be exclusive operator to offer Amazon smartphone
Amazon's smartphone play could be about removing friction from retail experience
Report: Amazon's 3D smartphone to use Omron's Okao Vision technology
Amazon likely to announce 3D smartphone at June 18 event
Report: Amazon to release 3D smartphone in second half of 2014

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