BlackBerry maker courts app developers
Knowing that a plethora of good apps is key to drawing new smartphone users, the company makes an appeal to app creators.
At a recent developer's conference, executives mentioned that, contrary to popular belief, users of the BlackBerry platform have actually shown great interest in embracing smartphone apps. This is an encouraging statement from the company at a time when it's facing challenges in competing with Apple (AAPL) and Google (GOOG) in the smartphone and tablet market.(See why we have a $16.50 price estimate for RIM.)
Apps business picking up
During the conference, RIM mentioned that about 174 million apps are downloaded from BlackBerry's App World every month. The executives also mentioned that the apps are quite profitable for developers, with BlackBerry apps generating 40% more revenue than their Android counterparts.
Additionally, about 13% BlackBerry developers have received more than $100,000 in revenue, which is a higher percentage than iOS or Android. However, Apple is well ahead of its competitors in terms of number of apps downloaded. We estimate that about 12 billion apps were downloaded from the Apple App Store in 2011 alone.
Halo effect from apps
Apps help create a halo effect around other valuable businesses for a smartphone vendor. The abundance of apps, along with a seamless user interface, is an important factor for a user while choosing a smartphone. RIM's strategy to attract developers by showing them the profitability angle of apps business is the correct one, as developers play an important role in the development of the apps ecosystem and the success of a smartphone. The success of these efforts, however, remains to be seen.
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