In an effort to keep up with where Apple has taken the iPhone model and Netflix is delivering streaming movies, Blockbuster has inked a deal with Motorola, Inc. that has Blockbuster integrating its OnDemand application with various models of cellphones and other handheld devices.

It has not been announced when the service will be available or on what devices it will be supported. But Blockbuster senior vice president of digital entertainment Kevin Lewis said, “The integration of our OnDemand service into Motorola’s mobile phones will provide access to thousands of movies from the moment someone initiates their service.”

Blockbuster’s OnDemand service, which charges rental fees of up to $3 per movie download or sells movies from $9.99 to $20, gives users on-screen search and browsing capabilities and additional content such as ratings and trailers. This is very similar to what Apple’s iTunes store does for users of the iPhone. Blockbuster’s senior vice president of digital entertainment Kevin Lewis also stated, “People are increasingly relying on their mobile phones to stay connected to the things they love the most, including their favorite movies and TV shows.”

Other details released say that the upcoming application will also be able to choose films for home delivery or reserve titles for in-store pickup. At the moment it doesn’t say anything to link it to Blockbuster Express kiosks.

Motorola is desperately trying to regain handset market share. Once the top dog in the market, it has lost that appeal to Apple and others who are designing more smartphones and mobile computer handsets. Motorola has also signed on to deliver Android phones. Perhaps the Blockbuster app is a part of that strategy.

But with the iPhone, its YouTube browser, and the iTunes and App stores so firmly entrenched, they will have a huge uphill battle. It would be easier for Blockbuster to enable an App on the iPhone which has the market share than to exclusively try to provide this service on Motorola handsets. And with the rumor that Netflix is polishing up its streaming player app for the iPhone for release, they better get cracking!