BlackBerry paid apps to start at $2.99, require PayPal
Official app store price tiers
It seems that phone app stores are on everyone’s mind, at least that’s the impression you get when you see all the buzz that accompanies the announcement of yet another one. RIM went live last night with the announcement of their upcoming BlackBerry App World, and details are leaking out about what that might mean to both customers and developers.
The devil is in the details, as it usually is with stuff like this, and RIM’s app price list is attracting a lot of attention. The BlackBerry maker intends to allow free apps in the store, a good thing for sure, but some are up in arms that the lowest price allowed for apps is $2.99. This doesn’t sound like much but in such a highly competitive market, developers like the ability to go as cheap as they can. I don’t see a problem with this starting price point; it’s still darn cheap, but I understand the concern that some developers are expressing. It probably does kill off the demand for those popular fart apps like those on the iPhone.
The real issue with RIM’s policies in the App World is the requirement that PayPal is the only method of payment accepted, at least initially. This makes sense on RIM’s part, as they intend the store to be global very quickly, but it’s never a good thing to place restrictions on how customers can pay. PayPal adds their own fees on top of every customer transaction so that becomes a real financial burden on sales in the store. Hopefully RIM will open up payment options besides PayPal soon.
It was also confirmed that apps downloaded from the store cannot be stored on external memory cards. They must go into main memory and that has a limiting effect on how many apps can be installed. This is the same as the T-Mobile G1 Android phone and one of the biggest limits on the usefulness of that device.
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Color me confused. The FAQs say all apps will be paid for through PayPal. The RIM distribution agreement makes it sound like developers will collect the money and pay RIM. But then developers have to sign a Digital River agreement. I can’t make the pieces fit.
One of the technical break throughs in iTunes is Apple’s system to handle credit card billing. Apple exploits the volume of sales to keep their credit card per transaction totals up. Customers typically cluster their buys and Apple has figured out how to sweep all those $0.99 sales together into larger transactions that keep their merchant account overhead down.
As can be clearly seen here: it gives Apple a competitive advantage over smaller less technically savvy competitors.
Say what you want about Apple but I really don’t want to pay $40 to print from my Storm. And for a business oriented phone: why no built in stock tracker??? How much is that going to cost on the new store? At least $2.99 apparently. :-(
I agree that Apple has a strong edge here, but I wouldn’t chalk it up to technical savvy. The core of Apple’s advantage is that they added their App Store to the iTunes Store, so they were already set to handle credit card transactions, and in large volumes of small amounts.
Apple makes thousands of 99 cent sales every day. Adding a few more to that is no problem. The other guys, however, are starting from zero. That means low volumes of small amounts, which likely means losing money. Google can afford it for now, but I guess RIM can’t. Will be interesting to see what Palm does. But again, it’s a matter of Apple having a running start vs. having a technical advantage.