BlackBerry App World – An App Store Wannabe?
Unlike the poor attempts thus far to launch a device that truly rivals the iPhone, the battle of the app stores is proving to be much more competitive and will require responses from Apple to maintain it’s advantage. Already Nokia announced plans to improve on the App Store with by leveraging location and the social graph to discover more relevant applications. Now RIM has raised the bar in a number of key areas as well. All this while operators sit on the sidelines watching the app opportunity slowly move away from their own walled gardens to OEM branded stores.
By now most of you have either read about the Blackberry App World or tried it on your handsets (for more details on the App World announcement, check out Mobile Crunch and Business Week). So rather than describing the App World, I want to share my observations on the launch, including highlighting a few areas where I believe the App World is raising the bar on Apple. While still fresh in my mind (on the plane from CTIA/Las Vegas), here we go:
- 80% Share. As previously announced RIM shares 80% of revenues with developers, raising the bar on Apple. It’s what you have to do when you are behind in terms of building a developer community. Although RIM has had a developer community for some time, it never provided adequate distribution opening the door for Apple to quickly attract a thriving community. Advantage RIM.
- $2.99 Minimum. While RIM may position the $2.99 minimum price for premium applications as a way to prevent lower quality apps from the store (compared to $0.99 for Apple), the real reason for this is simple: RIM has higher costs. RIM’s breakeven point mandates a $2.99 minimum. RIM costs include payment processing, operator kickbacks, and hosting expenses. Advantage Apple.
- Upgrade Pricing. RIM enables developers to charge for their upgrades. This gives developers the flexibility to deploy free upgrades (bug fixes, for example) and premium upgrades (major new versions). Apple on the other hand requires developers to post upgrades at no cost to consumers limiting the incentive to improve applications. Advantage RIM.
- Paypal required. RIM requires users to use Paypal for payment, adding unnecessary friction to the buying process. Watch for operator and credit card billing to follow. Given RIM’s good relationships with the operators I expect they will be able to negotiate operator billing and still maintain the 80% share for developers. As it relates to payments, watch for Nokia to pursue developing its own billing relationship for the Ovi store as hinted by it’s recent investment in Obopay. Advantage Apple.
- Free Trials. RIM enabled developers to make a full version of their apps available at no cost for a limited trial period. This enables developers to showcase their applications without having to created limited/demo versions of their applications. This will also encourage consumers to try unbranded, longer tail applications. Advantage RIM.
What do you think? How would you rate RIM’s response to the Apple App Store? Leave a comment and participate in the poll below.