Chicago (IL) – It does not take much to see that online software stores that allow users to download third-party applications directly to their cellphones are evolving into the next major battleground in the mobile devices industry. The App Store already proved it has all the genes necessary for massive success and Android Market is challenging its dominance right off the bat. Blackberry maker RIM joins the party with its own application store dubbed Storefront that has consumers (not businesses!) in its focus. However, industry experts believe that Storefront could be too late, since it won't open for business before March 2009.

Speaking at the first Blackberry Developers Conference before 700 registered developers, RIM co-founder and co-CEO Mike Lazaridis updated the company’s platform roadmap to address recent smartphone initiatives by Google and Apple. Lazaridis announced RIM's new application store dubbed BlackBerry Storefront will allow developers to set their own prices, while RIM will charge 20% of the revenue as a hosting and marketing fee (PayPal will handle payments). IT administrators will be able to determine applications that employees can download while carriers will have the freedom to customize the store catalogue on handsets they sell. Storefront is scheduled to open in March 2009.

RIM also updated its developer tools, unveiling a new public beta of the BlackBerry JDE plug-in for Eclipse, in addition to updated plug-ins for Microsoft's Visual Studio, BlackBerry MDS Studio, and Plazmic Content Developer's Kit. Content providers can now use push APIs and BlackBerry Web Signals to deliver opt-in alerts to Blackberry handsets. Also new are tools for web development, available in 2009: Gears enables web applications to run as standalone applications with background execution and offline support.


Is it too late?


Industry watchers think these initiatives are late, perhaps too late. Apple's App Store has moved 200 million downloads already and now carries more than 5500 applications. Android Market also went live today with a limited offering. Google removed most applications before the official store launch, but the number of products is expected to grow quickly when more Android-powered handsets become available. Both Google's and Apple's stores caught RIM unprepared.

When it launches, Storefront will almost exclusively target consumers. The first software batch includes applications for AOL, Facebook, MySpace, Gmail, Hotmail and Flickr. "The introduction of more consumer-friendly features in Blackberry smartphones has clearly helped generate a groundswell of interest with new developers that has already resulted in the introduction of thousands of consumer and lifestyle oriented applications for BlackBerry smartphones," Lazaridis said.


Screening policy

The only unknown variable so far is RIM’s screening policy. RIM already requires developers to adhere to four basic principles of Blackberry development: Bandwidth, capacity, performance and battery life. For example, if developers push for high broadband speeds, the capacity drops. Given these rules and Blackberry's importance in the enterprise, Storefront might impose the biggest restrictions of all application stores.

This might not necessarily be a bad thing for enterprise users, but consumers may not like it. RIM's screening policy may also affect a clash of two basic approaches of application stores: A controlled environment favored by the App Store and the openness promoted by Android Market. The competitive advantages and weaknesses of both stores actually stem from their opposed screening policies. There is no doubt that RIM will have a close look at how both approaches will work out over the next few months.


Clash of two ideas

Apple takes 30% of the application revenue and allows developers to set their own prices for applications (including free apps). The company frustrated some developers by screening submissions on unspecified criteria. For instance, Apple rejected a modem tethering program since AT&T doesn't allow it and killed a podcasting software for competitive reasons relating to iTunes. Apple's agreement with AT&T also limits VoIP applications to Wi-Fi, prohibiting VoIP over the cellular (3G) network. Despite those restrictions, the App Store remains a money making machine and most developers do not complain. Analysts predict that the App Store will grow into a $1.2 billion business by the end of 2009, with the potential to eclipse the iTunes Store in terms of revenue.

Android Market is currently available on Android G1 as an early beta with free applications only. Google has yet to enable paid applications but the company promises that it will not screen submissions or impose development restrictions. The store promotes openness as an insurance policy for developers to guarantee their time and money will not go down the drain.

Analysts doubt that market forces could sort out misbehaving applications from the good ones. "It is likely that at least some portion of the applications will be less than robust," Jack Gold of J. Gold Associates told TG Daily in an email interview. "How will they get sorted out in the application store? Bad applications could easily take down a phone, which could be deadly in such a personal form factor."

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