Will Verizon Kill BlackBerry App World?

19 Comments

Verizon VCAST Music for BlackBerry Storm

With Verizon set to roll out its app store, you have to wonder about the fate of App World. I’m not positive about the exact numbers, but I’ve heard from people in the industry that Verizon customers make up a huge proportion, we’re talking 80-90% of App World’s user base. Verizon’s Ryan Hughes, VP Partner Management, said in an interview that the Verizon app store will be the sole marketplace on devices sold by the company, meaning there is no hope for App World ever coming preloaded.

So what happens to App World when the Verizon store launches? Users will still be able to actively go and download App World, but it’s unrealistic to think that future BlackBerry users are going to care enough to go out of their way to download App World. RIM’s customer base is increasingly young, new smartphone users who come from the feature phone world, and they only care about what is right in front of their eyes. New subscribers are going to be inundated with the Vcast branding from the second they purchase their device. From the Verizon sales rep to web and television ads, Verizon will have the loudest voice and the message is clear: “we are the only place you need to be to get content.” Sure, RIM will have their own marketing budget, but it pales into insignificance compared to the behemoth that is the carrier.

RIM needs a significant competitive advantage over the carrier to keep App World alive. The only smartphone manufacturer that has been capable of taking down the carrier’s Walled Garden to date has been Apple, and it doesn’t look like RIM has any hope of cutting a similar deal. Apple has opened the carriers’ eyes to the value in smartphone apps, and they aren’t going to let device manufacturers into the pockets of their customer base. With over 3,500 developers already signed up to publish to Verizon, not to mention the incredible power Verizon offers in the way of valuable access to cell phone subscribers and their personal data, they already have a leg up on RIM. Verizon also has the perfect billing method, something RIM are still struggling with. We have heard RIM might be getting carrier billing soon, but I imagine the carriers aren’t exactly rushing to push this feature through.

It will be interesting to see how App World survives the Vcast store, and how this will change the app ecosystem. In the end, I think developers are going to have to rethink how they distribute their applications. Having someone in your organization who can navigate the carriers and maintain those relationships is going to be more important than ever. If Verizon is successful, it will send a message to all the other carriers that they need to do the same. We can expect to see updated smartphone app stores rolling out on all major carriers in the coming years and I predict not one manufacturer will be preloaded. Just because Apple did it doesn’t mean you can too.

  • http://www.yatca.com Yatca

    I have access to the download reports for two apps sold through App World. If these are representative of the overall picture, then Verizon users do not make up anything remotely close to 80-90% of App World downloads. I’ve checked just now and only 13.75% of downloads in the last three months have been to Verizon users. In fact only 36.6% of the total was even to a US carrier. So I very much doubt that the future of App World is dependent on whether or not Verizon decides to go its own way.

  • http://www.yatca.com/ Yatca

    I have access to the download reports for two apps sold through App World. If these are representative of the overall picture, then Verizon users do not make up anything remotely close to 80-90% of App World downloads. I’ve checked just now and only 13.75% of downloads in the last three months have been to Verizon users. In fact only 36.6% of the total was even to a US carrier. So I very much doubt that the future of App World is dependent on whether or not Verizon decides to go its own way.

  • Tom

    Sounds like an illegal monopoly to me — I’m sure that RIM will step in here!

  • Tom

    Sounds like an illegal monopoly to me — I’m sure that RIM will step in here!

  • Tom

    Sounds like an illegal monopoly to me — I’m sure that RIM will step in here!

  • http://www.blackberrycool.com/ Kyle McInnes

    There is no way for me to know if the 80-90% figure is right. I trust the source as he’s been a low level executive with a big carrier in the US for several years. The number may have been a little tongue-in-cheek though, illustrating that the fact that the numbers are very high.

    What I do know, is that Verizon makes up a HUGE percentage of BlackBerry sales in North America. The 80-90 figure isn’t the crux of my point. If VZW is successful, it will send a message to other carriers that you should be more active in owning your smartphone app portal. They will actively seek to kill the device manufacturer’s ability to earn revenue they feel is theirs.

    In the end, RIM is going to have to develop a value proposition big enough to drive users off what’s convenient and over to App World. The BlackBerry Cool store can do it because we offer discounts and special promotions. Where is App World’s advantage?

  • http://www.blackberrycool.com Kyle McInnes

    There is no way for me to know if the 80-90% figure is right. I trust the source as he’s been a low level executive with a big carrier in the US for several years. The number may have been a little tongue-in-cheek though, illustrating that the fact that the numbers are very high.

    What I do know, is that Verizon makes up a HUGE percentage of BlackBerry sales in North America. The 80-90 figure isn’t the crux of my point. If VZW is successful, it will send a message to other carriers that you should be more active in owning your smartphone app portal. They will actively seek to kill the device manufacturer’s ability to earn revenue they feel is theirs.

    In the end, RIM is going to have to develop a value proposition big enough to drive users off what’s convenient and over to App World. The BlackBerry Cool store can do it because we offer discounts and special promotions. Where is App World’s advantage?

  • Paul

    I hope Verizon doses not make a huge dent in App World. It would seriously FUBAR App World for the rest of the world. Why cant NA carriers accept the fact that consumers want them to be “dumb pipes.” Data, SMS and voice is all we want.

  • Paul

    I hope Verizon doses not make a huge dent in App World. It would seriously FUBAR App World for the rest of the world. Why cant NA carriers accept the fact that consumers want them to be “dumb pipes.” Data, SMS and voice is all we want.

  • Yuri

    I also have access to the download reports for a popular music app sold on App World. 18% comes from Verizon subs and 51% from non-US carriers.

  • Yuri

    I also have access to the download reports for a popular music app sold on App World. 18% comes from Verizon subs and 51% from non-US carriers.

  • http://appworld.blackberry.com/webstore/vendor/1111 Ebscer

    My numbers certainly do not support 80-90% of users on Verizon, but it still is a significant number.

    While it would be silly to ignore the new verizon app store, it is something I will be approaching carefully to begin with…

  • http://appworld.blackberry.com/webstore/vendor/1111 Ebscer

    My numbers certainly do not support 80-90% of users on Verizon, but it still is a significant number.

    While it would be silly to ignore the new verizon app store, it is something I will be approaching carefully to begin with…

  • StaticFX

    @Tom – its not a monopoly at all. If VZ restricted your choice so you could not use App World – then there is a problem. But in reality, if VZ doesnt charge anything extra… I would use this! It would be so much easier to just order an app and not have to deal with anything complicated for payment. It would just show up on the bill. PERFECT. Im in. Hey, maybe VZ’s app store wont delete itself every time I reboot my phone too.

  • StaticFX

    @Tom – its not a monopoly at all. If VZ restricted your choice so you could not use App World – then there is a problem. But in reality, if VZ doesnt charge anything extra… I would use this! It would be so much easier to just order an app and not have to deal with anything complicated for payment. It would just show up on the bill. PERFECT. Im in. Hey, maybe VZ’s app store wont delete itself every time I reboot my phone too.

  • jp morris

    I also whole heartedly dissagree with this article. Please site these sources where you’re coming up with the statement that
    Verizon users make 80-90% of RIM app world users. Att has 3 times the smartphone subscribers as Verizon and a larger portion of them are RIM subscribers. This story lacks serious credibility.

  • jp morris

    I also whole heartedly dissagree with this article. Please site these sources where you’re coming up with the statement that
    Verizon users make 80-90% of RIM app world users. Att has 3 times the smartphone subscribers as Verizon and a larger portion of them are RIM subscribers. This story lacks serious credibility.

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