(Updates with today’s trading in 13th paragraph.)
Oct. 20 (Bloomberg) -- Research In Motion Ltd., losing ground in a market that its BlackBerry smartphone helped to build, is adding developer “evangelists” in Silicon Valley to change perceptions about the company’s prospects and promote a new operating system.
RIM’s developer team has been too concentrated at the company’s headquarters in Waterloo, Ontario, said Alec Saunders, RIM’s new head of developer relations, in an interview this week in San Francisco. Saunders, who joined RIM last month, declined to say how many people will be hired or relocate to the Bay Area, home to competitors Apple Inc. and Google Inc.
Saunders’s challenge is to convince developers -- who are happy to build mobile-device applications for Apple’s iOS operating system and Google’s Android -- to embrace BlackBerry. Developers should ignore RIM’s 50 percent drop in U.S. sales last quarter and focus on the opportunity presented by rising BlackBerry demand overseas and an increase in RIM subscribers to about 70 million worldwide, from 50 million a year ago, he said.
“I want a team on the ground here in Silicon Valley, going to developer events and meeting with developers all the time,” Saunders said while attending his company’s BlackBerry DevCon conference. “There’s a giant perception gap. Nobody is telling our story and even we weren’t telling our story.”
Out of Time
The company introduced its BlackBerry BBX operating system on Oct. 18, combining features from the existing BlackBerry platform and the QNX software it bought last year. The system, which doesn’t have a release date, includes new programming tools like HTML5 designed to make building apps easier.
“RIM provided a clear vision for the future of their development platform,” said Kunal Gupta, chief executive officer of Polar Mobile, a Toronto-based developer of publishing apps for magazines including Time and Sports Illustrated. “It’s the right approach to build excitement.”
Even with these improvements, RIM may be running out of time to catch up to the larger developer communities built around iOS and Android, according to Chirag Patel, who runs Corsoft Corp., a San Mateo, California-based developer of apps including emergency-assistance program ICEcare.
“There’s a lot of merit” to HTML5 and other BBX features, Patel said. “But I think it’s too little too late.”
Tavis McCourt, a Morgan Keegan & Co. analyst in Nashville, Tennessee, agreed.
“RIM is clearly becoming much more developer friendly,” said McCourt, who rates RIM shares “market perform.” “One wonders if it is too little too late, at least in the U.S.”
BlackBerry’s share of U.S. smartphone subscribers fell to 20 percent in the quarter through August from 25 percent three months earlier, according to data released this month by Reston, Virginia-based ComScore Inc. Cupertino, California-based Apple’s iOS rose 0.7 percentage points to 27.3 percent, while Android climbed to 44 percent from 38 percent.
There are more than 250,000 apps available from Google’s Android Market, about six times as many as in RIM’s App World.
“While BBX should provide substantial improvements, it will struggle to compete” with Apple and Google, said Michael Walkley, an analyst in Minneapolis at Canaccord Genuity Ltd. who rates RIM a “hold.”
RIM fell 0.4 percent to $22.23 at 10:58 a.m. New York time. The stock has lost about 62 percent of its market value this year as sales of BlackBerry handsets and PlayBook tablets have been lower than some analysts’ forecasts. PlayBook deliveries to retailers including Best Buy Co. fell to 200,000 units last quarter from 500,000 the previous quarter. Apple shipped 9.25 million of the market-leading iPad in its past quarter.
‘Best We Can’
The PlayBook suffered from criticism by users that the device lacked dedicated e-mail, calendar and contacts programs. RIM has promised those features in an upgrade called PlayBook OS 2.0 without saying when that version will be available to customers.
“We know the No. 1 reason the PlayBook sales haven’t been where we want them to be is the lack of native e-mail, the No. 2 reason is there aren’t enough apps,” Larry McDonough, manager of RIM’s hand-held software team, told reporters yesterday. “So we’re attacking that as best we can.”
The company offered a more extensive view yesterday of how software designed to let developers easily convert Android apps into BlackBerry apps will work. Developers can test apps they’ve built for Android on the PlayBook at a booth at the conference in San Francisco.
Saunders has given McDonough, who works out of RIM’s office in Redwood City, California -- 15 miles from Google’s headquarters in Mountain View -- the task of leading BlackBerry’s developer drive in Silicon Valley.
In the weeks since Saunders joined RIM, McDonough said he’s been going to every Android event he can to raise awareness of the PlayBook and “show people what we can do.”
“It’s ground zero right here,” McDonough, said in an interview. “Everything that’s happening in mobile software innovation globally, 90 percent of it is happening right here.”
Patel, who’s considering developing an education app for the PlayBook, said lackluster sales of the tablet make “the incentive a lot less” than developing the app for Apple’s iPad.
The effort to court developers “are things that should’ve been done long before,” when the iPhone was introduced in 2007, Patel said. “The best days have, I think, passed them.”
--Editors: Romaine Bostick, Stephen West
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