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October 21, 2008, 4:11 pm

RIM chases Apple – again

By Michal Lev-Ram

SANTA CLARA, Calif. – First Apple rolled out its App Store, a mobile storefront where consumers can download games, social networking services and other software programs for their smartphones.

Starting Wednesday, Google will offer similar services through its Android Market, which coincides with the launch of the first Google-powered mobile phone.

Now comes Research in Motion (RIMM). The BlackBerry maker announced Tuesday that it too will launch a mobile storefront – this one dubbed Application Center.

“This is a new channel to market,” RIM co-CEO Mike Lazaridis told some 700 mobile developers attending the BlackBerry developer conference here on Tuesday. “The opportunity is larger than ever, from enterprise to consumer.”

Mobile applications have been around for years, but never gained traction until Apple started offering consumers the user-friendly, one-stop shopping App Store in July. Almost overnight, the race for consumer dollars — not to mention the advertising dollars attached to mobile software — was on. Apple says its customers have downloaded more than 100 million applications to date. Now companies like RIM are scrambling to compete.

The three stores, while essentially similar, have some key differences. Unlike Apple (AAPL) and RIM, Google says its applications will be available for free. RIM will take a 20% cut of the revenue generated from download fees, while Apple pockets 30% of its developers’ revenues. Also, Apple and RIM must approve software applications before they can be sold — a level of control that critics say should be left to users, not the companies. Google, meanwhile, insists developers can sell any programs they want through Android Market.

This isn’t the first time RIM, the leader in the U.S. smartphone market, has gone after Apple. The two companies became rivals when the iPhone launched last year, but it didn’t get serious until Apple started courting BlackBerry’s business customers with the new high-speed iPhone 3G and App Store. RIM, for its part, is now chasing after Apple’s core customers – tech-savvy consumers - with flashier devices that emphasize multimedia and social networking features. The Canadian mobile device maker plans to launch an iPhone-like touchscreen device called the Storm later this fall.

But the iPhones assault and some unexpected product delays are worrying RIM investors as the crucial holiday season nears. ”We believe the next 30-45 days are a critical window for RIM,” Citigroup analyst Jim Suva wrote in a recent report.

And while Apple and Google’s (GOOG) application stores are already live, RIM’s Application Center won’t be up and running until March 2009.

Still, RIM’s 31% share of the U.S. smartphone market will be hard to crack. Apple trails in fourth place  — behind HTC and Palm (PALM) – with about 12%, according to Nielsen Mobile. But RIM isn’t alone in its pursuit of Apple. Samsung, Nokia (NOK) and just about every other handset maker is now looking to catch up too.

Apple should be excited they finally beat RIM’s 2-3 year old devices by 800,000ish devices ..

Storm, Bold and Pearl Flip will show Apple a 3 carrier assualt that all they can respond with will be more AppStore commercials showing games .. maybe in the next year they can actually add some functionality to the Iphone and for corporations like some real security.

Where is device encyrption? How about not being able to Jailbreak and BYPASS any Exchange Policy we force? How about storing of files to the devices? A word / excel / powerpoint editor? Tethering? Apple has a long way to go to compete in the business market.

To the user asking what you get moving the Iphone as a mobile platform .. you get zero device management and limited security policies which can be bypassed by jailbreaking the device. Don’t forget to load Itunes on users desktops.

As a consumer device where your primary focus is entertainment / internet the Iphone is a great device but leave it there as in this current state it’s not touching our company data.

Posted By Frank Smith, NY, NY : October 22, 2008 1:15 pm

“Can’t seem to change the battery on the iphone – ahhh, yes great design?”

How many people actually change their celphone battery or carrying multiple battery around? :) Just plugin and charge.. by the time your battery life completely unusable. You already have a new phone…

Posted By Kaneda, CA : October 22, 2008 11:27 am

I work for a NY state gov’t agency and call tell you: for us, the iPhone is nothing more than a curiosity at the corporate level. With “support” for Outlook/Exchange only, the iPhone appears to ignore Lotus Notes and Novell GroupWise shops. And while the iPhone is certainly an attractive device, all of our devices are already bought and paid for…. so with our (and everyone else’s) budget shrinking as rapidly as it is, where exactly would the return be in abandoning our investment (BES, licenses, and devices) and migrating to iPhone?

Posted By Steve, New York, NY : October 22, 2008 5:28 am

Fortune Mag cannot do a basic fact check. C’mon people, you are better than that! Apple App store offers many FREE apps and these can be submitted to Apple with only the $99 Developer fee, yes Apple must approve. Free to user and almost no dollar cost to developer. I have about 50 apps on my phone, I use 10 to 15 frequently another 20 occasionally and the rest rarely or only for “Demo” purposes. 90 percent of the apps I have were free. My entire extended family has iPhones, all have at least 10 apps. RIM was a very solid and well managed company but they publicly sat on their hands for 2 or 3 quarters in response to the original iPhone. It did not take a genius or a brilliant forecaster to see where Apple was going. Clearly RIM did not prepare enough for the iPhone 3G, demonstrated by their belated rollouts and ramp-ups. Apple will crush them this December quarter and while AT&T is terrible in some markets compared to Verizon on the whole Apple is going for the 34 and under demo and you know, texting and facebook do not need a great voice network so the bad network argument falls on deaf ears for many when you have such a depth of software and entertainment options. Eat that RIM and Verizon, good luck Tmobile and Android.

Posted By SW Cherry Hill, NJ : October 22, 2008 2:13 am

Gotta love the FUD. The iPhone can run more than one app at a time. How do you get phone calls when you’re browsing?

You can’t run more than one 3rd-party app at a time. You have plenty of Apple’s own apps using processor cycles in the background.

Posted By Ken C, Gardiner, Maine : October 22, 2008 2:10 am

OK, I grow somewhat tired of this”apple is for tech retards” arguement fanboys of other devices keep using.

I run Linux and XP on my home boxes.

I’d never switch from my iPhone to any of the devices now available. For one, the storm and “gPhone” do NOT have full VNC clients that actually let me remotely access my PC/LINUX desktop, giving me access to everything there.

Since when is making a device operate in a more straightforward fashion a bad idea? Do you actually LIKE having to dig through a manual to figure out how to make simple things happen? I’d love to see apple design a TV…I’m sure switching between fullscreen, letterbox, and extended screen modes would be allot simpler than the beyond counterintuitive interface on my SHARP TV.

Posted By Rick, San Mateo California : October 22, 2008 12:58 am

Just traded my corporate blackberry in today for an iPhone and I guess I was not alone. My greatest surprise was that the IT guy who set it up had one too.

Posted By DS, New York, NY : October 21, 2008 10:58 pm

RIMM doesn’t have a prayer chasing iPhone users. I used a blackberry for 5 years, switched when iPhone first came out and trust me, there is NO going back.

Posted By Armen, NY NY : October 21, 2008 10:26 pm

Can’t seem to change the battery on the iphone – ahhh, yes great design?

Posted By Don’t believe the hype! : October 21, 2008 9:58 pm

Apple is now #3 in handset revenue (well ahead of RIM) and they beat RIM this last quarter in units shipped. RIM is now a follower, and their latest handset offering and software portal for apps is just that.

Posted By Joe, St. Joseph MI : October 21, 2008 8:39 pm

While we’re having a love fest with the iPhone let’s also mention that it can only run one application at a time, unlike a BlackBerry.

Posted By Jaluman, Austin, TX : October 21, 2008 7:09 pm

Apple just did it today, it surpassed RIM in market share & is 3rd only after NOKIA & SAMSUNG.

Posted By Ganesh Agrawal Cupertino CA : October 21, 2008 6:46 pm

AAPL iphone sales just announced at earnings, and they are off the hook. RIMM has quite a battle ahead of them.

Posted By Dig, Brooklyn NY : October 21, 2008 6:20 pm

Can you imagine what Apple’s market share would be if they offered their product to more than one carrier?

Posted By Bryan, DC : October 21, 2008 6:10 pm

This just in from the Apple Quarterly results call: AAPL sold more phones than RIMM in the last quarter :-)

snickers and gloating elided

Posted By David Emery, Reston, VA : October 21, 2008 6:03 pm

Umm, I don’t think so. Corporations and large business’ use the BB as a secure device. The iPhone has not been adopted as a secure device yet, and won’t until they make it pass these regulations. You take that into account, all that is left for people that actually buy the iPhone are the blind consumers that don’t realize how much they are spending on a fad. The apple fan-folk blindly follow Steve Jobs, continuously buying the next “upgrade” that they release.

As more competition comes out, people will realize that they can get a better device, better service, and for a cheaper price. If anything, Apple’s share of the market will only slow down. I do give it to them, they did well in the past two years. They reach out to the tech-uneducated very well with marketing and flashy devices. It won’t be long until people realize that they can get a lot more from other phones. If it weren’t for being on the T-mobile market, I would be getting the Google phone. But my family is already on Verizon’s network, and its the only network that works in my area.

Posted By Kris, San Diego, CA : October 21, 2008 6:00 pm

Apple just announced that they sold more iPhones than all of RIM’s products combined in the last quarter!

Posted By DB, Chicago, IL : October 21, 2008 5:57 pm

March 2009 for the start of the app center????? What is Rim thinking?I thought the app center was gonna be up and running when the Storm became available for sale.

My whole family has Blackberrys on Verizon but I have to say Apple is kicking Rim’s buttocks.If the Iphone ever comes to Verizon my whole family will switch.I refuse to use At&ts terrible network.

Posted By Anonymous : October 21, 2008 5:50 pm

Its only for the Storm & Bold. BB Curve is pretty obsolete and looks like a dated POS.

Posted By NL Flushing Qns NYC : October 21, 2008 4:59 pm

Growth rate of iPhone adoption is huge, taking literally all the life out of the so called market ‘leaders’ such as RIM.

What you don’t mention is that Apple has gone from 0% to at least 12% in less than 2 years, and the adoption rate is still increasing. iPhone will pass the blackberry in marketshare in another year or two at this rate.

Posted By Brian : October 21, 2008 4:41 pm
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