RIM Plays Devs for Dollars
May 3, 2012 11:56 AM PT
Research In Motion (RIM) has big plans for its next-generation platform, BlackBerry 10, expected for release later this year. However, in order to compete with market leaders iOS and Android, the company will need strong support from the mobile application development community.
To do that, the company has reportedly offered a bounty. It's promised that new apps will earn at least US$10,000 in revenue, offering to make up the difference out of its own pocket for apps that don't reach that milestone. Certain restrictions apply.
Apps are the lifeblood of mobile platforms, and the offer could be enticing to some developers. To others, though, it could indicate RIM is having trouble attracting devs, who may be concerned about the company's lagging position in the global smartphone market and the poor showing of its PlayBook tablet.
RIM promised that BlackBerry 10 apps will earn $10,000 in the first year they are available on its App World app market. If app sales don't hit that figure, RIM will make up the difference.
"That report about the offer seems to be accurate," Maribel Lopez, principal analyst at Lopez Research, told TechNewsWorld. "BlackBerry developers make more money than devs creating Android and other apps."
There's been "lots of interest in BlackBerry 10 and where it's going, from the global audience, including Latin America and India," said Lopez, who attended RIM's BlackBerry World conference this week in Florida.
We'll Pay You, but ...
The bounty offered by RIM will apparently only apply to certified BlackBerry 10 apps. However, there's little indication so far of how certification is earned. RIM will reportedly publish the criteria for this later in the year.
In order to qualify for the bounty, apps will also have to earn at least $1,000 on their own. That will rule out free apps and apps that nobody wants.
If an app earns between $1,000 and $9,999 RIM will cut the developer a check for the difference between that sum and $10,000.
Why RIM's Offering Loot
The BlackBerry 10 platform "offers quite a bit of promise" for developers creating HTML5 apps, Aditya Bansod, senior director of product management at Sencha, told TechNewsWorld. "We've done a lot of work on the platform, especially the browser, which is first-class."
Further, RIM claims that more than 300,000 devs have signed up for the BlackBerry App World vendor portal. If even half of them created one BlackBerry 10 app each, that would give RIM 150,000 apps. So why is RIM offering to shell out cash to guarantee an income of $10,000 in the first year?
"Uncertainty and opportunity cost are the main issues," Peter Farago, vice president of marketing at Flurry Analytics, told TechNewsWorld.
For an app to succeed, the installed base of BB 10 devices needs to be large enough that app downloads on that platform make it worth developers' while, Farago explained. "This is an unknown, and with BlackBerry device sales declining precipitously, it would be somewhat of an act of faith for developers to commit resources against the platform."
Mobile platform vendors "are in a war for developers and developers are motivated by money, so you want to convince them that apps on BlackBerry 10 will make money," Lopez Research's Lopez suggested.
Fighting Off Other Players
The competition might also be a factor. Top apps on iOS can earn over $100,000 a day, Farago said. "Contrast this to the possible revenue a developer on BlackBerry 10 can earn, and it becomes harder to commit resources."
Android's rapid growth, with a concomitant increase in the number of apps for that platform, could also make it difficult for RIM to lure app devs to BlackBerry 10.
However, that may not work against RIM entirely. For example, there were 500,000 apps in the iTunes app store back in May of 2011, according to Apple. The downside to this is that new apps tend to disappear in the crowd.
As for Android, BlackBerry 10 has a Runtime for Android utility that it has just expanded with new features.
The runtime "is just a bridge to let people have Android apps that aren't on BlackBerries," Lopez Research's Lopez said.
RIM did not respond to our request for comment for this story.