The urban myths of BlackBerry

A keynote address by RIM executive Alec Saunders at the BlackBerry DevCon in Amsterdam this week highlighted the ‚urban myths‚ about the device. He spoke to ARTHUR GOLDSTUCK afterwards.

In the TV series Mythbusters, hosts Adam Savage and Jamie Hyneman use scientific methods to lay myths, legends and old wives’ tales to rest. With every myth debunked, it is stamped with the Busted logo.

At BlackBerry DevCon Europe in Amsterdam this week, RIM VP Developer Relations Alec Saunders used the same approach, but all he needed was a solid set of numbers to help him declare the BlackBerry myths ‚Busted‚ .

In his keynote address, immediately after new CEO Thorsten Heins had delivered his debut address as RIM boss, Saunders focused on three of the great ‚ urban myths of BlackBerry‚ , from a developer perspective, namely that:

With each barrage of numbers Saunders delivered, the Mythbusters’ trademark ‚Busted‚ stamp appeared on the giant screen behind him.

After his keynote, he sat down to talk through the myths over a cup of coffee.

‚I find there is so much misinformation around BB, that you just have to stand up and say no, this is wrong,‚ he said. ‚The misinformation circling around the company is crazy. American analysts are asking questions about the viability of the business. Here we are, with $1,5bn in bank, delivering profits one quarter after another, with no debt on the books, and a customer base that is growing. In any other industry, we would be regarded as a roaring success.‚

A fundamental misunderstanding by these analysts, he said, is about the nature of markets outside North America. A case in point is Indonesia, with a population of 245-million, making it the fourth biggest nation on Earth. And it also happens to be BlackBerry country.

‚There is always something interesting and unique in every market,‚ said Saunders. ‚The Indonesians download more apps than any other population on the planet. It’s not a strong English-speaking country, so developers are working hard to build apps with local content in the local language, and these are hugely popular.

‚Indonesia is arguably the most successful market RIM has in world: it is not only the number 1 smartphone, but also the number 1 phone overall.‚

Myth No. 1

A key question about his rebuttal of the myth that the BlackBerry market is shrinking, is whether the number presented were ‚pre-outage‚ , i.e. representing a time before a vulnerability of the RIM platform was exposed. Saunders had the numbers to rebut this one as well:

‚The outage came at the same time as DevCon San Francisco, and at Devcon SF we made the announcement that the company had grown to 70-million subscribers. A quarter later, we’re saying 75-million, so it seems sales are still growing,

‚The thing about that market fact is that a lot of people get caught up on market share numbers published in the USA. While I don’t want to diminish the fact that we are in a transitional period, it’s incorrect to look at market share numbers from a developer point of view. It is appropriate to look at market size. If you were a developer a year ago, you had 55-million customers: today you have 75-million subscribers, a 35% increase in your market size. As a developer, that has to be good.‚

This argument is one that has often been put forward in Gadget: that the focus on market size in a rapidly growing smartphone market has masked BlackBerry’s continued strength in many markets and niches. Saunders put it graphically:

‚This isn’t Coke versus Pepsi, where there’s a finite market for sugar water. This is the smartphone market, which is exploding. Yes, some of our competitors are growing faster, but you can’t argue that our numbers don’t show growth.

Saunders says that, often, analysts confuse declining market share with declining market size. What they don’t mention, he says, is the viability of the BlackBerry platform for developers ‚ and the opposite situation for other platforms.

‚Building an app for one of the competing stores is a bit like buying a lottery ticket. A few make it big, but most make nothing. This is about building a successful business by building apps on BlackBerry.‚

Myth No. 2

On the belief that BlackBerry users do not use applications, he argued: ‚The facts just don’t confirm the assertion. Not only do BlackBerry users use apps, but more and more are going into the store. In October, the average BlackBerry user was downloading 24 apps per year. Here we are two quarters later, and it’s risen to 30 apps per year. It rises as people discover there are apps for BlackBerry.‚

Again, the key question must be whether the free apps offered in December to make up for the outage didn’t create that increase. Saunders didn’t debunk that one, acknowledging that it turned out to be a blessing in disguise:

‚The free apps made a difference, but it was good for everybody. The outage was a negative, but introducing the legions of BlackBerry users to the possibilities of apps on the device turned out to be a very good thing.‚

Saunders also did not dismiss the possibility of repeating such promotions – unforced by circumstances.

Myth No. 3

The myth Saunders has the most fun debunking is the belief that developers don’t make money from BlackBerry. The truth is, the App World is developing into one of the most advanced platforms for app revenue streams.

‚I meet with developers on a fairly regular basis. One of the misunderstood facts about BlackBerry is that our customers are willing to pay for apps. We have a much higher percentage of paid apps in the store and our developers are more likely to make money than those on other stores.‚

He offers a case study of an Ottawa start-up, Smarter Apps, which works exclusively on BlackBerry apps. In existence for 18 months, in the past 12 months it has moved offices three times to accommodate expansion. They have 13 apps in the App World, some for the PlayBook tablet, and some for BlackBerry handsets.

‚This is a business run by a couple of smart guys constantly looking for revenue models and exploiting gaps in the market,‚ says Saunders.

‚An important fact is that we provide the richest palate of revenue possibilities as well. We have the free and paid apps, obviously, but we also have a try-before-you-buy model for developers, so that a developer can give an app to customers as a trial and, after a certain number of uses, ask to pay. Then we also have in-app purchases, a subscription model, in-app subscriptions, and carrier billing.‚

Indeed, carrier billing is BlackBerry’s secret weapon.

‚It is proving to be a huge boon,‚ says Saunders. ‚In some emerging markets, credit cards are uncommon, so carrier billing is a very good solution.‚

Carrier billing for apps will also be a key element in the roll-out of BlackBerry 10, both for new handsets and for the PlayBook 2.0 tablet, due for release later this month.

The final word comes from Saunders, who is holding thumbs that no one will call Busted on his most important prediction: ‚The message I would give to any developer is that you can build a business on BlackBerry. You’re not buying a lottery ticket, you’re building a business.‚

* Arthur Goldstuck heads up World Wide Worx and is editor-in-chief of Gadget. Follow him on Twitter on @art2gee. He is author of six books on urban legends, all published by Penguin. (See his blog at www.urbanlegends.org)