RIM vs carriers: Balsillie & Lazaridis strategies to push App World

Posted
by
Kyle McInnes
on May 12, 2009, at 7:24 AM
in Editorials, News, Spotlight and Top-Story
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Comments: 6 responses
6 Comments

RIM executives

In order for App World to be a real success, we’re going to need to see it preloaded on upcoming BlackBerry devices, as well as pushed by carriers to all their BlackBerry subscribers. The reason we’re not currently seeing this, is because the carriers are threatened by App World, and concerned with losing a major revenue stream.

From the carrier perspective, App World is both a blessing and a threat. App World is promoting a surge in data usage which directly translates to extra revenue for the carrier. The threat from App World for the carrier comes down to competition with the carrier content portal. In a content distribution taste test, the carriers will always lose to App World, but this doesn’t matter to them. All the carrier cares about is owning the sale of content and owning that revenue stream. App World threatens to eat the carrier’s lunch, as more subscribers realize that the content download experience is much better through RIM.

Not only are carriers preventing App World from reaching more users, they’re also preventing subscribers from getting access to the content we want. The carriers have always tried to impede tethering and VoIP applications which keep our bills low and stay connected. This is just one reason why the carrier content portal needs to bow down to App World.

In the end this is all going to come down to a CEO showdown. Jim Balsillie and Mike Lazaridis are going to have to show some incredible leadership in order to convince the carriers to get out of the way. Behind closed doors, RIM executive will sit down with the likes of Randall L. Stephenson of AT&T and Ivan Seidenberg of Verizon. Their negotiations will hinge on some of the following points:

RIM leverage

  • As a world leader in smartphone manufacturing, they are a significant source of hardware revenue.
  • Smartphone and BlackBerry adoption rates are better than ever.
  • BlackBerry devices encourage great data and voice usage.
  • BlackBerry devices can convince subscribers to shift carriers.

Carrier leverage

  • The gatekeepers – they control the customer.
  • BlackBerry is dependent on their networks.

The likely outcome of this battle will be Jim Balsillie and Mike Lazaridis convincing the carriers to become pipes and nothing else. The carriers will give up their control of content distribution and allow App World to do it best.

When the RIM dream team finally take down the carriers, we’ll see some great things happen to App World. All BlackBerry devices will upgrade with App World being pushed to their device and BlackBerry devices that are later released, will have App World preloaded on the device.

Things are going to work out for the carriers as well. Although the carriers will have lost their content portal revenue, they’ll be more than making up for it with new revenue streams and they’ll see a dramatic increase in established revenue channels. The new carrier supported App World will be able to use direct billing. Where App World once relied on PayPal and credit cards, your purchases will now show up on your monthly statement. Carriers will be taking a cut of every sale in the same way PayPal did. Also, expect users to upgrade their voice and data packages as App World fosters greater usage of the BlackBerry.

In the end, everybody wins.

The article you just read is completely an opinion piece and does not reflect anything official from RIM. It’s just for discussion.

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  • addictedtoBB

    The only way this will EVER make any money for anyone is if RIM adds memory to their devices. What in the hell is the point of AppWorld if when you install more than 5 apps your phone locks up and goes to crap because of lack of memory? Until these programs can run off of the memory cards installed in them, this is all a waste of time.

    You don’t see an iPhone (yes, the devil incarnate) crashing with the installation of a handful of apps do you? I have a friend with over 150 and the phone works the same as it would with only one installed. Memory and app ‘power’ if you will is just one area that is going to continue to pull RIM down in the market. I’m not sure why they can’t improve this.

  • addictedtoBB

    The only way this will EVER make any money for anyone is if RIM adds memory to their devices. What in the hell is the point of AppWorld if when you install more than 5 apps your phone locks up and goes to crap because of lack of memory? Until these programs can run off of the memory cards installed in them, this is all a waste of time.

    You don’t see an iPhone (yes, the devil incarnate) crashing with the installation of a handful of apps do you? I have a friend with over 150 and the phone works the same as it would with only one installed. Memory and app ‘power’ if you will is just one area that is going to continue to pull RIM down in the market. I’m not sure why they can’t improve this.

  • zyphbear

    There are a few issues with this suggestion:
    1- As AddictedtoBB said, the amount of onboard memory limits the usage of additional apps, on top of the memory used by App World itself. The sheer amount of memory management and leakage in the BB OS is a major issue as well. After all, even though my BB has about 10MB remaining, it will randomly lockup or stall when typing a text message.
    2- I currently am signed up for BIS, NOT BES. I want to control what goes onto my device. Not What they feel like sending me. I am so sick of T-Mobile pushing apps out to my device against my will (I have randomly had Facebook, Handago and MySpace apps pushed to my device as well as their OWN browser bookmarks too) some being very difficult to remove. This would be another App that until the memory management issue gets fixed (and additional memory gets added), I will do everything I can to REMOVE it. I have had App World installed, but it was slow on my Curve 8320 and didn’t really do much that I couldn’t do through other methods for the space it took up, so I removed it.
    3- Before the App Store becomes a standard (after both the first and second issue is dealt with), they also need to have a backup option (like the Sidekick: Server side) for all these apps. (Both on PC and Mac). At least with an iPhone, everytime you Sync it, all the apps are backed up. Most BlackBerry users don’t need to actively plug their device into the computer. And with more consumers out there using the Blackberry, even less of them will sync their device either. (And with services such as Google Sync, some of us advanced users don’t need to very often either.)

    If the memory/OS bugs are not fixed by this fall, as a user of Blackberries for the past 4 years and several versions of BlackBerry devices, I will be switching to a more consumer device such as Android.

  • zyphbear

    There are a few issues with this suggestion:
    1- As AddictedtoBB said, the amount of onboard memory limits the usage of additional apps, on top of the memory used by App World itself. The sheer amount of memory management and leakage in the BB OS is a major issue as well. After all, even though my BB has about 10MB remaining, it will randomly lockup or stall when typing a text message.
    2- I currently am signed up for BIS, NOT BES. I want to control what goes onto my device. Not What they feel like sending me. I am so sick of T-Mobile pushing apps out to my device against my will (I have randomly had Facebook, Handago and MySpace apps pushed to my device as well as their OWN browser bookmarks too) some being very difficult to remove. This would be another App that until the memory management issue gets fixed (and additional memory gets added), I will do everything I can to REMOVE it. I have had App World installed, but it was slow on my Curve 8320 and didn’t really do much that I couldn’t do through other methods for the space it took up, so I removed it.
    3- Before the App Store becomes a standard (after both the first and second issue is dealt with), they also need to have a backup option (like the Sidekick: Server side) for all these apps. (Both on PC and Mac). At least with an iPhone, everytime you Sync it, all the apps are backed up. Most BlackBerry users don’t need to actively plug their device into the computer. And with more consumers out there using the Blackberry, even less of them will sync their device either. (And with services such as Google Sync, some of us advanced users don’t need to very often either.)

    If the memory/OS bugs are not fixed by this fall, as a user of Blackberries for the past 4 years and several versions of BlackBerry devices, I will be switching to a more consumer device such as Android.

  • DavidB

    RIM needs to figure out a better memory model. The three partition memory scheme currently makes we users jump through far too many hoops managing memory that the OS should be doing for us. And as mentioned, it is flat out STUPID that in 2009 a smartphone ships with only 128MB of RAM for OS and apps.

  • DavidB

    RIM needs to figure out a better memory model. The three partition memory scheme currently makes we users jump through far too many hoops managing memory that the OS should be doing for us. And as mentioned, it is flat out STUPID that in 2009 a smartphone ships with only 128MB of RAM for OS and apps.