Bloomberg News

RIM Loses Miami Dolphins Fans as Software Developers Defect

June 27, 2011

(Updates with closing share price in seventh paragraph)

June 27 (Bloomberg) -- Research In Motion Ltd., struggling to compete in the smartphone market with Apple Inc. and Google Inc., is losing support among some software developers who have been making programs for the company’s BlackBerry.

Seesmic Inc., a developer of social-media applications, and Mobile Roadie LLC, which makes apps for fans of the Miami Dolphins and country singer Taylor Swift, have decided to stop making products for RIM. Purple Forge Corp., which makes programs for political campaigns and polling, will stop building BlackBerry versions of its apps unless customers request it.

“You have to put your resources where the growth is,” Seesmic Chief Executive Officer Loic Le Meur said in an interview. “It’s coming down to the explosive growth of the iPhone and the Android operating systems.”

RIM has been trying to build support among developers to fight back against Apple and Google’s Android, which have drawn away users with greater varieties of applications. RIM last week said quarterly revenue may drop for the first time in nine years and unveiled plans to cut jobs.

The Waterloo, Ontario-based company’s share of global smartphone sales fell to 12.9 percent in the first quarter from 19.7 percent a year earlier, as Apple gained and Android more than tripled to 36 percent, according to researcher Gartner Inc.

RIM said it continues to increase the number of programs for customers. There are more than 35,000 apps in the company’s online store, up from the more than 25,000 in March, said Marisa Conway, a spokeswoman. There are more than 200,000 apps in the Android Market and more than 425,000 in Apple’s App Store.

Expensive ‘Gotchas’

RIM fell 40 cents, or 1.4 percent, to $28.17 at 4 p.m. New York time in Nasdaq Stock Market trading. The stock has dropped 52 percent this year.

The developers are stepping back from BlackBerry because they say creating apps is too complex and costly for the size of the market. RIM’s devices have different screens sizes, varied operating systems and several ways to navigate, from a physical keyboard to touchscreen to a scroll button.

“As soon as RIM brought in a touchscreen and mixed it with a thumbwheel, a keyboard and shortcut keys, it made it really difficult and expensive to develop across devices,” said Purple Forge CEO Brian Hurley. “What Apple scored big on is having a touch screen and a button and that’s it.”

There are also costly surprises that turn up during development for RIM, Hurley said in an interview.

“In deploying Apple applications, there are very few surprises,” said Hurley. “In Android, there are increasingly more surprises. But in BlackBerry, there are immediately lots of gotchas across the board.”

‘Whoa’

When Seesmic’s Le Meur tried to load his San Francisco- based company’s application on the new BlackBerry Playbook tablet, the application wouldn’t run, he said.

“To me it was like, ‘Whoa.’ BlackBerry isn’t even an option,” Le Meur said.

For Mobile Roadie, which allows its customers to design and build their own applications, the variation across devices was particularly frustrating. In an interview, CEO Michael Schneider said users would blame the Beverly Hills-based company for inconveniences like distorted images on different-sized screens.

“At the end of the day, I even felt like developing for BlackBerry could be hurting our reputation,” Schneider said.

The decision to back away from BlackBerry was made easier by waning user engagement, developers said.

“When we put an application in the field, there was a 20- to-1 difference between Apple and BlackBerry downloads,” said Purple Forge’s Hurley. The Ottawa, Ontario-based company devotes about 80 percent of its investment to Apple development.

Growing Challenge?

Schneider said less than 2 percent of BlackBerry users interacted with Mobile Roadie’s applications, compared with more than 50 percent of iPhone and Android users.

“We were putting a ton of resources into something users were not engaging in,” he said.

The challenges for RIM may grow with a new operating system it’s planning to use across all its devices. The company, after buying QNX Software Systems last year, introduced its BlackBerry PlayBook tablet in April on a new QNX operating system and plans to introduce BlackBerry phones built on QNX next year.

That switch will only encourage more developers to not bother with the BlackBerry OS used on current devices and adopt a wait-and-see approach to RIM, said Peter Misek, an analyst with Jefferies & Co. in New York.

“The vast majority of developers build for Android and iOS and have no plans to build for RIM until QNX is fully up and they can evaluate it,” said Misek, who has an “underperform” rating on RIM. “Until then, they are unlikely to support QNX in any meaningful way as an active platform.”

--Editors: Peter Elstrom, Donna Alvarado

To contact the reporters on this story: Devin Banerjee in New York at dbanerjee2@bloomberg.net; Hugo Miller in Toronto at hugomiller@bloomberg.net

To contact the editor responsible for this story: Peter Elstrom at pelstrom@bloomberg.net


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