BlackBerry Unleashes a World of Apps – For a Pretty Penny

Research In Motion’s BlackBerry App Center is now called “BlackBerry App World.” However, as mobile phone industry players know, when it comes to smartphone applications and how to sell them to customers, it’s really Apple’s world and we’re all living in it.

That’s why analysts who followed RIM’s Wednesday announcement about the new name and details for its applications destination immediately began assessing its chances against the runaway success of Apple’s App Store.

BlackBerry App World, which is expected to open for business later this spring for BlackBerry owners who live in the U.S., Canada and the UK, offers two distinct differences from Apple’s store: Other than free apps, the minimum price has been set at US$2.99, and customers must set up accounts with PayPal for purchases. A large number of Apple apps can be found for 99 cents and $1.99, and you can use a Visa or MasterCard to buy them directly from Apple.

Pleasing BlackBerry’s Core Audience

“The strategy here is to duplicate Apple’s success,” independent mobile phone/telecom analyst Jeff Kagan told the E-Commerce Times. “A number of carriers and other companies are going to try to make lightning strike twice. That said, these are tight economic times, and that can skew the results, so it might sound like a funny time to set that kind of pricing.”

RIM’s core audience for BlackBerry smartphones — enterprise/business users, more affluent road warriors — may not care about a $3 minimum for apps, Kagan said. “But there are plenty of my children’s friends in high school who carry BlackBerries. They use it for email but don’t synchronize for business. They might have a tough time looking at the dollars,” and that might impact RIM’s plans to expand the BlackBerry’s business model.

The proof will be in the quality of the apps, said Gartner analyst Ken Dulaney. “If you are a RIM device holder, there isn’t much choice. You will buy what you can get. You aren’t going to throw away the device,” Dulaney told the E-Commerce Times. “So I think it will be moderately successful. But the real key is whether users and especially consumer users come to RIM because of their app store.

“The price will be a bit of a damper, but they will have to have the kinds of compelling applications that cause people to buy into the Apple store. And that will be a challenge. After all, how can you compete against ‘Bubblewrap?'”

Potential Problems/the Developer’s Cut

BlackBerry’s financial agreements with developers give them a larger share of revenues than Apple and the major network carriers do for those who are writing their applications, “which gives developers more room to experiment and stir some things up and keep going. It’s not quite as thin on the margin side, which spurs more innovation and experimentation,” said IDC analyst/research manager Lewis Ward.

However, the fact that customers will have to set up an account with PayPal could be a hurdle to success, Ward told the E-Commerce Times. “That could be a very tough sell and could limit at least out-of-the-gate uptake of these premium apps. Maybe there’s some way to get your enterprise to sign off on select apps in certain situations.”

Ward also sees potential difficulties in getting more of the world to sign up for App World. Launching in only three countries may be a result of different regulatory issues in different countries, and it’s unclear whether RIM has the capabilities to create enough excitement for each market. “I’m not sure that RIM is necessarily going to be in the best position to be able to deal with all that. You could have a vast amount of resources put into launching this thing in 50 different countries,” Ward said.