RIM Opens BlackBerry App World

Device Maker Research In Motion Aims to Compete With Apple's iPhone Services

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LAS VEGAS (AdAge.com) -- The mobile-application store for BlackBerry handsets opened for business today, as device maker Research In Motion seeks to offer services on its devices that rival those of the Apple iPhone.

RIM's president and co-CEO, Mike Lazaridis, announces the opening of BlackBerry App World at the CTIA wireless conference.
RIM's president and co-CEO, Mike Lazaridis, announces the opening of BlackBerry App World at the CTIA wireless conference. Credit: AP
The grand opening of RIM's application store, dubbed BlackBerry App World, underlines a departure from the design- and hardware-focused narrative in handset marketing. A handset's value no longer resides in the hardware but rather in the services and software that run on it.

"Advanced smartphones and services are the future," said RIM's president and co-CEO, Mike Lazaridis, making the announcement at the CTIA wireless conference opening here today.

Easy access key
For that, thank Apple. Last summer, it made thousands of games and utilities from independent developers easily available right from the phone -- and showed how such offerings can fuel demand for the handsets and raise consumer expectations about what mobile devices can do. Apps are expected to drive future demand for smartphones; In Stat forecasts that more than 100 million phones with onboard apps stores will ship by 2014, four times more than today.

Now, smartphone makers are busy filling up their app stores, not only to make their smartphones competitive but to keep existing users from bolting to a handset with a vast inventory of apps. Joining RIM and Apple are Palm, Nokia and Windows Mobile -- all plan to launch their stores in the coming days and weeks.

BlackBerry apps have been available to users for years through third parties and other means, but the iPhone again taught phone makers another lesson: Make it easy for users to access, browse and install useful software directly from their phone, and you'll have a hit on your hands.

Music, social-network, travel apps
RIM, originally a business-focused device maker, has flirted with the consumer market since introducing the BlackBerry Pearl two years ago. And the launch of the apps store -- coming months after the debut of its touch-screen multimedia BlackBerry Storm phone -- marks the company's latest move into the consumer space. The tagline for the app store? "A World of Possibilities."

While Mr. Lazaridis made fleeting mention of business-productivity software in the app store, he mostly used the keynote podium to plug a wealth of consumer applications, including eight music apps and social-networking and traveling utilities.

Still, RIM will surely keep its foothold as the handset brand for the business-minded and duly drive development to bolster its enterprise software offerings.

Analysts say RIM would likely follow Apple's lead in its messaging. Apple's print and TV campaigns highlight how its applications can help solve problems and queries. And some say Apple's success should help RIM's app store because Apple's campaigns have conditioned consumers to the allure and usefulness of apps.

Seeding entrepreneurs
"At this point, you'd have to be a copycat to stay even," said Tim Bajarin, President of Creative Strategies. "At the very least, RIM would have to match Apple tit for tat to get any mindshare."

Since most applications in an app store are created by third-party developers rather than the handset maker's in-house team, handset makers also have to woo that constituent. To that end, RIM and other investors last year announced the $150 million BlackBerry Partners Fund to seed entrepreneurs who develop applications for the handset. RIM is also letting outside developers keep 80% of the revenue they generate from paid apps; Apple lets developers keep 70%.

One potential hurdle for Blackberry's store: price. While iPhone apps start at 99 cents, RIM requires a $2.99 starting price for paid applications. And users who want to purchase the apps must have an account with PayPal, which imposes seller fees.

"We have consistently seen the 99-cent price point on the [iPhone] App Store perform exceptionally well, and by setting the minimum price at $2.99, users may be discouraged from casually and impulsively buying mobile applications -- which has been the catalyst for the success of Apple's App Store," said Rana Sobhany, VP-marketing at apps shop Medialets.

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