Is RIM’s BlackBerry App World Minimum Pricing Of $2.99 The Right Strategy?

Posted on 08. Mar, 2010 by in BlackBerry

For most BlackBerry users one of the things they would like to see, besides new devices, would be better applications for the BlackBerry platform.  With the way Apple has changed the entire app industry through the App Store the demand for not only more, but better applications is at an all time high across all mobile platforms, and BlackBerry is no different.  In the short life of App World one thing I have always had an issue with was the pricing structure for applications that are sold via App World.   As it is now, the lowest amount a developer can sell an application in App World is for $2.99. There is not a pricing tier between free and $2.99 as there is in the iTunes App Store.  When App World first launched it was talked about the reasoning for this was that RIM wanted to weed out the redundancy and maintain a high level of quality with the applications listed in App World.  Originally this viewpoint made sense to me, looking at it from a consumers stand point and someone who didn’t regularly purchase many applications, for any platform.  Since that time, I have released a BlackBerry application and I have purchased countless applications for both BlackBerry and iPhone/iPod Touch alike.

One of the first things that I think of when I think of the iPhone would be: applications.  With the App Store recently reaching over 150,000 applications, it’s obvious they are doing something right with their business model.  Granted the popularity of the iPhone is a driving factor for the ridiculous amount of applications built for this platform but at the end of the day they have enticed developers to make applications for their platform, even if some of the applications are small, sometimes pointless for most, and often times redundant.  Another reason, besides the popularity, would be the pricing structure.  Apple has a pricing structure where paid applications start off at $0.99.  Selling 1000 copies of an application at $0.99 is a lot better than only selling 100 copies of the same application at $2.99.  The $0.99 price point lends itself to the end user making an impulse buy.  I, for one, am far more willing and likely to spend $1 on an application, which I may or may not use on a daily basis, compared to spending $3 for the same exact application.

As someone who lists a BlackBerry application for sale via MobiHand and App World I have the experience of seeing the clear benefits of having a wide-open pricing structure, as MobiHand does.  One of the benefits is allowing developers to put their application on sale for a promotional period; with no restrictions on what price they choose.  A developer could put their application on sale in App World, but it is only a realistic option if the application is normally priced above the $2.99 minimum price.  Otherwise it would require a developer to discount their app to free.   So on MobiHand my application is listed, on sale, at $.99 and in App World it is listed at a permanent $2.99. This is the position I find myself in, I run promotions on MobiHand monthly and I am not able to do the same on App World.  (This also brings to mind the fact that it would be great to allow developers to give out coupon codes for applications listed in App World as well.)

In November of 2009 at the annual BlackBerry Developers Conference (DevCon) RIM announced the BlackBerry Advertising Service.  This new service will allow BlackBerry developers to insert advertisements in their applications, with a pay per click incentive, all of which will be managed by RIM.  The more I have thought about this, as well as their pricing structure I have wondered if this is RIM’s answer to lower app pricing.  Think about it, instead of a developer releasing an application for $2.99 without ads they release the same application for free with ads.  Would end users buy into this?  I don’t think so.  Taking the approach of forcing ads on the end user, even if the application is free to download, is a tough sale on the end user.  We all remember the push back that UberTwitter received when they pushed out ads, even after they announced they would be offering a premium ad free version there was still a decent amount of pushback.  I would venture to guess that the majority of users do not like ads and would prefer to not use something that has an ad in it, especially if it is an application they use on a regular basis.  Under this scenario each and every time you, the end user, open an application you are going to see advertisements.  For an application that you use on a regular basis, this is not going to be something most would want to see.  From a developer stand point there is no way to put a number on the the amount of revenue an application is going to make for each download.  The developer is left to put the revenue in the hands (literally) of the end user.  Also, one would think filling an application with ads would give the appearance of an application of lower quality.  The implementation of the ads in the app relies on the developer, but I can already see 50 different free tip calculators with an ad on each screen.  Remember, RIM wanted higher quality applications in App World.

The numbers I used above, 1000 apps at $1 and 100 apps at $3 are similar to the numbers I see when comparing my MobiHand sales to App World.  Keep in mind that RIM keeps 20% of the end price of an application purchased in App World so it would only make sense from a business stand point to want 20% of $1000 over 20% of $300.  Could this be due to some of the promotions I run on MobiHand; absolutely.   The point is that I have that choice on MobiHand and not on App World.  I may be way off with this mindset; maybe the bulk of end users really won’t mind the ads as long as they are getting applications for free.  I have always been taught in business that if a working model exists; use it as much as possible.  RIM it is time you allow developers to have more control over the pricing of their applications, allow for lower pricing tiers and promotional giveaways.

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3 Responses to “Is RIM’s BlackBerry App World Minimum Pricing Of $2.99 The Right Strategy?”

  1. Bla1ze

    08. Mar, 2010

    I truly don’t see how it’s profitable for an app developer to put any apps in BlackBerry App world. Unless of course you are a huge company with corp backing and copyright deals in place.

    The whole thing needs to be thought out more and while they cannot scrap App World at this point, they can still however fix it and set it on the right path.

    • Jason Cipriani

      08. Mar, 2010

      Exactly! Even with my app being sold for $2.99 on App World it has accounted for less than 10% of my revenue…. I only put it there for the exposure.

  2. kyle

    08. Mar, 2010

    I agree wholeheartedly to this post. As an app developer I dont think my app is worth 2.99 but it also isnt free. Since there is no ad api for me to use yet how am I supposed to make money? I know no one will buy it for 2.99 so I’m out of luck. Mobihand on the other hand allows me to do whatever I want with the pricing of MY software and it has resulted in great sales, so mobihand ftw!