Research In Motion is the latest smartphone supplier to open an online app store. Although these app stores are changing the way software is distributed, the new model may hinder rather than help small and midsize businesses.
Application development and distribution have been ongoing challenges in the mobile phone market. Recently the development of online stores has changed the way that software is distributed, and another vendor is trying to take advantage of that change. However, the new model may hinder rather than help small and midsize businesses.
Research In Motion is the latest smartphone supplier to move into the online store arena with the launch of BlackBerry App World. The store, which is available in Britain, Canada, and the United States, offers about 1,000 entertainment, gaming, news, and travel applications.
Like others, RIM is riding the coattails of Apple's App Store, which has been a runaway success and a product differentiator for the company. Because this foray into the application development ecosystem is a new venture and doesn't have the marketing pull of Apple or Google, some observers think RIM may have trouble attracting third parties. In response, the smartphone provider has taken a few steps to differentiate its service.
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Money is one lure. Apple gives developers 70% of the revenue from the apps it sells. By contrast, RIM is taking a smaller cut, giving developers 80%.
Additional functionality is another perk. The App Store has been quite successful; it recently reached the billion-download milestone and offers about 25,000 applications to customers. However, some users have found it difficult to find what they need. To address this need, BlackBerry App World has broken down its application portfolio into a variety of application categories, such as Reference and eBooks, and Social Networking and Sharing. The RIM site also seems to have better search capabilities than the Apple store.
In addition, Apple has been slow to incorporate features found on many e-commerce sites, such as product comparisons and opportunities for customers to provide feedback about their experiences. BlackBerry App World includes a review section where customers post their input and rate various products via a star rating system.
RIM faces other challenges, starting with some formidable competitors. Google's Android marketplace has a simpler approval process than Apple's App Store. While Apple reviews individual programs, Google lets customers decide the fate of applications. Microsoft, whom many acknowledge as the de facto king of working with third parties, is building its own mobile software marketplace. The company, which already has 20,000 third-party mobile software partners, plans to launch its Windows Marketplace for Mobile store in the fall. Nokia also has been working on its Ovi online store, which is expected to open later this spring.
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The growing acceptance of these stores presents a mixed message to small and midsized businesses. On the plus side, these stores should provide a needed boost for mobile application development. The market for such products has been slow to develop but has recently picked up steam as smartphones have become more capable. So, at the very least, more applications should be coming online.
However, one downside is that the emergence of these stores has meant a growing emphasis on consumer applications, such as gaming and social networks like Facebook and MySpace. RIM's focus had been on the business market, and one reason for its success is its ability to address business needs, such as enhanced security. And a recent survey indicates the BlackBerry is held in much higher regard among business users than the iPhone. With the company moving in direction of consumers, it becomes unclear which supplier will provide businesses with needed functionality.
But while most mobile applications are being designed for the consumer market, a few could have business implications. Executives could find items such as weather reporting and hotel reservations of some use.
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Another problem is the growing disparity in smartphone designs. Rather than coalescing around common application programming interfaces, vendors are pushing development of their own proprietary approaches. This outlook raises developers' costs, makes it more difficult for businesses to mix and match different systems, and means simple, central management is unlikely. Eventually, a couple of market leaders will emerge, but in the interim, mobile software will lack the plug-and-play interoperability found in other market sectors. While the volume of mobile phone applications is growing, so is the challenge of managing it in small and midsize companies.
See more columns by Paul Korzeniowski.
Paul Korzeniowski is a Sudbury, Mass.-based freelance writer who has been writing about networking issues for two decades. His work has appeared in Business 2.0, Entrepreneur, Investor's Business Daily, Newsweek, and InformationWeek.
