Research In Motion Ltd. (RIM), seeking to boost the appeal of its BlackBerrys and revive slowing sales, plans to enable models expected next year to run applications built for Google Inc. (GOOG)’s Android operating system, three people familiar with the plan said.
BlackBerrys that run on RIM’s new QNX software will be Android-compatible, said the people, who asked not to be identified because the effort isn’t public. RIM has said it plans to introduce QNX phones in “early” 2012.
RIM is rebuilding its range of devices around QNX and is looking to add features that appeal to customers who had grown weary of the aging BlackBerry portfolio and its narrower selection of apps. There are more than 250,000 apps available from Google’s Android Market, or about six times as many as in RIM’s App World, a factor in helping Android become the world’s top smartphone platform.
“Being able to run Android apps, that’s a big plus,” said Steven Li, a Raymond James Ltd. analyst in Toronto with an “outperform” rating on the stock. “If you get the tonnage of Android apps and the top 50 apps through BlackBerry’s App World, that addresses many of the concerns people have about RIM’s ecosystem.”
A handful of models that RIM introduced this month were its first new phones in a year, a gap that caused the BlackBerry to lose ground. Its share of the global smartphone market fell to 12 percent in the second quarter from 19 percent a year earlier, according to Gartner Inc. Over the same period, iPhone maker Apple Inc. (AAPL) climbed to 18 percent from 14 percent, and Android rose to 43 percent of the market.
No More Upgrades
RIM rose $1.07, or 3.9 percent, to $28.57 at 4 p.m. New York time in Nasdaq Stock Market trading. The stock has lost 51 percent this year while Apple has climbed 17 percent and Google has declined 12 percent.
While RIM has said that its QNX-powered PlayBook tablet will be equipped with technology that allows it to run Android apps, it hasn’t disclosed whether QNX phones will have the same capability. Marisa Conway, a spokeswoman for Waterloo, Ontario- based RIM, declined to comment.
The Android app player in the new BlackBerrys is the same one that has been built for the PlayBook, and it is being tweaked to fit the different screen size and resolution of various BlackBerry models, one of the people said.
RIM plans to have the Android player installed on the QNX phones when they go on sale and not in an upgrade, to avoid criticisms that software upgrades were too slow to come, the person said.
The PlayBook was criticized on its debut in mid-April for its lack of a built-in e-mail system and a dearth of apps compared with Apple’s more popular iPad.
RIM plans to issue a PlayBook software upgrade in September that adds a dedicated e-mail program and BlackBerry Messenger instant-messaging applications, one of the people said. A PlayBook upgrade for the Android player may come later on in the year, two of the people said.
In June, RIM co-Chief Executive Officer Mike Lazaridis told analysts PlayBook e-mail and BBM will be introduced “soon” with the PlayBook Android player to come “later in the summer.”
RIM said it shipped 500,000 PlayBooks last quarter after starting sales on April 19, trailing the 9.3 million iPads Apple sold in the three months through June 25. Sprint Nextel Corp. (S) said on Aug. 12 it had canceled plans to sell a faster 4G version of the PlayBook planned for this fall. No other U.S. phone companies have announced plans to carry the 4G PlayBook.
RIM is grappling with a smartphone sales slowdown in the U.S. even as sales outside North America still grow. The company, which reports earnings Sept. 15, has said quarterly sales may drop for the first time in nine years.
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