Tuesday, January 19, 2010

Will Verizon Kill BlackBerry App World?

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.

© Kyle for BlackBerry Cool, 2010

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