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Possible implications of RIM’s $10K guarantee

At BlackBerry 10 Jam in Orlando Alec Saunders announced that RIM would be offering a $10,000 guarantee for BlackBerry 10 apps that meet a quality criteria. Most of the details of this program have not yet been announced, but we do know that in order to qualify for the guarantee an app must reach at least $1,000 dollars worth of sales. This offer will have a direct impact on the apps that are initially available on BlackBerry 10.

Uniform design

Details are not yet out on what the quality criteria will be, but most likely it will involve creating an app following RIM’s design criteria for BB10. This will most likely mean writing the UI for apps in either bbUI.js or Cascades. The end result for users will be a lot of apps with a consistent interface.

Higher percentage of paid apps

The guarantee does not apply to free apps, so developers who are unsure of a business model will be more likely to choose going with a paid app rather than a free app in order to take advantage of this offer. There is no word yet if this offer would apply to free apps that make use of in-app purchases. I would hope that these apps are included, because otherwise it is an incentive to go with the model of separate free/premium apps, which is not as user friendly (or as good for the developer in the long term).

No change on the top end

For most top tier apps $10,000 worth of sales will be easily reached anyhow so there will be no real effect on these apps from the guarantee. The effect of this offer is far more likely to have a greater impact on encouraging more app creation on the mid to low end apps that are bringing in ~$1,000 in revenue per year.

More apps available at launch

The best way to take advantage of this program is to submit apps early, and to be a part of it from the beginning. As a result, this offer will help drive more apps to be available for BlackBerry10 on day one.

More advertising of apps

If spending $300 on advertising brings in an additional $100 worth of sales, then the advertising is a waste of money. However with this offer, it is important enough to get the first $1,000 worth of sales that in some cases spending $3,000 in advertising in order to guarantee that you hit the threshold will be well worth it.

Little incentive to encourage incrementally better sales

With this program, there is a lot of incentive to reach $1,000 in sales. For apps that sell more then $10,000 there is the normal monetary incentive to sell more. For apps stuck in the middle there is little incentive to drive sales. For an app that has already crossed the $1,000 threshold and seem unlikely to surpass ten grand there is no incentive at all. This may result in a good number of apps that don’t receive much in the way of updates or support during their first year.

Let us know what you think!

14 total comments on this postSubmit your comment!
  1. I think RIM needs to do whatever it takes to get a Netflix App and a Skype app. Lots of games, Facebook, Twitter etc will all be there but everyone always tells me about the 2 missing.

    • RIM is spending $100 million on getting the major app companies to create a BB10 port of their apps. This is a separate program. Although they haven’t mentioned companies by name, they have confirmed that this involves the must-have apps.

    • I honestly don’t get the obsession with most about Netflix. Their selection is terrible!! Wouldn’t you rather see a more robust media app coming from a Dish Network/Blockbuster?

      • I’m not a Netflix subscriber so I agree there. What I want is for Amazon to get an Instant Video app developed for Blackberry. Why then went Android only is beyond me because Amazon did not build itself on Android users. I bought my music there because they weren’t proprietary like iTunes but now, in my opinion, they’ve essentially done the same. They push the Kindle and everything is for the Android platform.

  2. the program is better than a kick in the face that is for sure

  3. In principle, your argument is correct. But realize that whatever a guarantee from RIM would look like, there would always be a group of developers who would benefit unjustly.

    I must say I don’t really understand the $1,000 threshold. I would expect the quality criteria to be such that the expected sales in the first year is in the order of $10,000. In that case, the guarantee would work as an insurance for developers (for instance, against low sales of BB10 phones). I can hardly imagine that many apps will pass the test which have a potential of earning only $1,000.

    • This is why RIM is running the program. Because they know that in practice they won’t have to pay out all that much as most apps will sell $10,000 worth anyhow.

      But for developers it is a safety net. It eliminates some of the risk for developers who are not sure if they want to support the platform or not.

      • Also, from what I understand, its not necessarily a $10,000 from RIM either. If a developer makes $5000 in sales from his/her app, RIM would pay $5,000 to bring them to guaranteed $10,000 in sales.

  4. I’m not a developer so I’ll admit that I’m not as informed with all things dev, but couldn’t this also lead to the small shops doing away with free trials and raising their price (be that good or bad)? I generally try to go with apps that have free trials (or are free altogether) but I have bought apps that are $1-3 range with no trial, some I don’t stick with while others I do. The dev still got the sale though and knowing that people have a tendency to buy apps with little hesitation, especially in the $5-under range, why not boost the $1 price tag to $2 and do away with the free trial to get the $1000 threshold? You now need 1/2 the sales and you’re still going to get the intrigued buyer sales…

    • I don’t think that there will be much change in prices or trials as a result of this program. Whatever sells more apps is in the best interest of the developer either way…

  5. I wonder if the program will be protected against abuse.
    For example I can post an app, make the price $1000, buy it myself (losing $300) and voila – I receive another $9000 from RIM

    I expect that there will be also some services that will offer mass app purchases so one can easily pass the $1000.

    In general I think the program will have major impact of the Featured section: apps that are going well in the first months will be promoted again and again to collect the $10000 just from sales, while apps that are not getting much sales won’t have a chance for a spot in Featured section.

    Oh well, it is only speculations so far, time will tell.

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