November 9, 2009 / 5:06 PM / 8 years ago

RIM to help app developers use ads, micropayments

TORONTO (Reuters) - Research In Motion is making it easier for software developers make money from the applications they develop for its popular BlackBerry smartphone as the company falters in the face of stiff competition from rivals like Apple Inc.

<p>Mike Lazaridis, President and Co-CEO of Research In Motion (RIM), poses with the new "Blackberry Bold 9700" handset during its launch in Bochum October 21, 2009. REUTERS/Ina Fassbender</p>

New plans announced on Monday will let developers of games, news summaries and other “apps” insert advertising into the programs more easily. RIM will also help developers better integrate and process payments for premium content.

“Attracting developers is critical,” RIM co-Chief Executive Jim Balsillie said in an interview. “Now, developers can have ad revenue and ad-sharing strategy in their applications.”

Apps are becoming increasingly important for companies like RIM and Apple as the variety and price of available software helps consumers decide what phone to buy. RIM opened its own small application store in April, stung by Apple’s success and far-wider offering.

A view that RIM lags Apple in apps, along with rising competition, has already brought several downgrades for the one-time market darling, most recently from Susquehanna Financial. Susquehanna on Monday downgraded RIM to “neutral” from “positive” on tougher competition on sales of high-end smartphones.

The downgrades have hit RIM shares. The stock, currently at $59.62, is well above March’s year low of $35.05, but below its year high of $88.08, set in September 2008.

Some smartphone apps already feature advertising, while more costly apps come without. There are also basic versions of some apps available for free, but users can upgrade to a full-featured version for a price.

Apps range from those that help improve productivity to frivolous time wasters, like ones that let users simulate the sound of a fart with a smartphone.

Users are downloading them in droves. Apple’s app store reported more than 2 billion downloads in late September.

The use of ads can lower an app’s price to the consumer -- or make it free -- which increases downloads.

Applications are also crucial to RIM’s effort to win a bigger share of the consumer market, from which much of its recent subscriber growth has come. The software complements models of consumer-focused BlackBerries, such as the touch-screen Storm, which has been RIM’s answer to Apple’s iPhone.

RIM’s push into the retail market has put the company in more direct competition with Apple and other consumer smartphone vendors such as Motorola and Nokia.

Last month, Apple said it sold 7.4 million iPhones in its last quarter and the company posted earnings that easily topped Wall Street forecasts, pushing its stock to record highs.

In September RIM posted results and an outlook that fell short of what investors had expected, sending its shares tumbling more than 15 percent.

Reporting by Wojtek Dabrowski; editing by Janet Guttsman

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