Blackberry 2013 Annual Report Download - page 65

The Company may not be successful in expanding or managing its BlackBerry World applications catalogue.
BlackBerry World, the Company’s comprehensive electronic content distribution platform, is available to customers in over 100
markets globally, with other markets to follow. The continued expansion of the catalogue of applications and other content on
BlackBerry World is an important element of the Company’s successful transition to its next-generation BlackBerry 10 smartphones
the success of the BlackBerry PlayBook tablet, and requires a substantial investment of internal resources for development of the
infrastructure, improvement of developer and consumer interfaces and advertising costs.
Decisions by customers to purchase the Company’s products are becoming increasingly based on the availability of top-rated third-
party software applications. The Company is dependent on third-party software developers to provide access to and develop content,
including applications, and services to enhance the user experience and maintain competitiveness and differentiation of BlackBerry
products in the marketplace. The availability and development of these applications and services will depend, in part, on perceptions
of the third-party software developers of the relative benefits of developing software for the Company’s products rather than or in
addition to those of its competitors, which may be adversely affected by further losses of market share, delays in the launch of
BlackBerry 10 smartphones in additional markets, and perceptions regarding the ability of the BlackBerry 10 smartphones and related
products to compete successfully in the wireless communications industry. The Company may not be successful in convincing
existing BlackBerry developers to develop additional applications or new developers to develop applications for the catalogue. Some
developers who have significant relationships with the Company’s competitors may be unwilling to develop applications for
BlackBerry products without valuable incentives from the Company, or at all. In addition, if the Company develops its own software
applications and services, such development may negatively affect the decisions of third-party developers to develop, maintain, and
upgrade similar or competitive applications. The loss of, or inability to maintain these relationships may affect the desirability of the
Company’s products and, hence, the Company’s revenue from the sale of its products, particularly to consumers. If the Company is
unable to successfully expand and manage the BlackBerry World applications catalogue, the success of the Company’s BlackBerry
10 smartphones and future products and services may be materially and adversely affected.
An expansion of the Company’s online commercial presence may also require significant additional investment in security measures
to protect the transmission of confidential data, including payment information, and to augment protection for the Company’s servers
and network. Any failure by the Company to implement adequate measures around security of payments, or security of confidential
or personal information of the end users of the Company’s products, could result in regulatory enforcement or potential litigation and
have a detrimental impact on the BlackBerry brand and the Company’s reputation. For example, failure by the Company to comply
with applicable laws, regulations and practices imposed or supported by the payment card industry relating to the security of
payments could result in sanctions by individual card providers (including prohibiting the Company from processing a card provider’s
card), regulatory sanctions, fines or litigation under applicable privacy laws or reputational damage. Applications may also require an
interface with third parties over which the Company has no control. If necessary third-party interfaces are not available to support the
applications, the Company may lose market share, and its business, results of operations and financial condition may be adversely
affected.
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