April 1, 2009 / 4:06 AM / 9 years ago

RIM ready to launch software store for BlackBerry

TORONTO, April 1 (Reuters) - Research In Motion RIM.TORIMM.O is launching an online application store that will let users of its BlackBerry smartphones download software for everything from news and entertainment to travel and games.

Unlike the iPhone application store of rival Apple Inc (AAPL.O), which offers 70 percent of revenue from each piece of software to the developer of the software, RIM plans to offer 80 percent.

The rest of the revenue will be shared between RIM and wireless carriers, co-Chief Executive Jim Balsillie said in an interview.

“We think that’s a fair distribution of the economics,” he said. RIM is expected to launch the online store this week.

The company’s media-rich BlackBerry handsets, such as the Pearl, Curve, Storm and Bold models, are competing with Apple’s popular iPhone for retail customers.

Waterloo, Ontario-based RIM has pushed aggressively to diversify its user base beyond the executives, lawyers, politicians and other professionals who use its BlackBerry phones to send wireless e-mail securely.

“I think we’ve firmly cut over to the broader consumer marketplace,” Balsillie said.

Offering a slate of interesting and diverse smartphone software, from the practical to the entertaining, can sometimes mean the difference between keeping and losing a user.

That’s because a user who has spent money on such software downloads may be reluctant to switch to a different device and have to pay for applications all over again.

RIM first announced plans for its software store last fall.

Microsoft Corp (MSFT.O) is also working on a mobile phone software marketplace and has signed up partners such as Web music service Pandora, game publisher Electronic Arts ERTS.O, and social networking site Facebook. It, too, plans to offer 70 percent of application revenue to software developers.

RIM is set to report earnings on Thursday after warning in February that its quarterly profit will come in at the low end of its forecasts. Still, it said it expects to add 20 percent more subscribers than the 2.9 million it earlier predicted.

It cited a variety of factors in the profit warning, including product mix, lowered channel inventory levels and a higher ratio of new subscriber sales to upgrades and replacement sales.

RIM shares have tumbled to about $45 on the Nasdaq from the year high of $148.13 they hit in June 2008. Analysts have expressed concern about the company’s gross margins and its ability to maintain momentum amid a widespread recession.

Retail consumers have curbed spending, which may mean they are not willing to pay more for flashy new smartphones.

At the same time, corporations are trimming their budgets, which could prompt them to delay upgrading to newer BlackBerry models. (Reporting by Wojtek Dabrowski; editing by Peter Galloway)

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