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RIM starts to build bridge over "app gap"

Chris Umiastowski spent over a decade working as a technology analyst on Bay Street. He now works as an independent analyst and strategy consultant and is blogging from the BlackBerry Developer Conference for the Globe and Mail.

Ever since Apple Inc. launched the App Store for the iPhone, Research in Motion Ltd. has been stuck playing catch-up. Relative to Apple, RIM has a history of offering a less powerful operating system and weak developer tools. This has resulted in not only fewer, but far less attractive mobile apps within BlackBerry App World. Industry pundits have referred to this problem as the "app gap".

After attending the BlackBerry Developer Conference (DevCon) in San Francisco this week, I can confidently say this problem is on its way to becoming a part of the past. The primary reasons for this are third party software developer kits and HTML5.

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In speaking to gaming experts at DevCon, it is clear to me that most of the big name games are not programmed using native developer tools for iPhone or Google's Android. Instead, they are coded using third-party platforms such as Marmalade or Unity. Both of these platforms now support BlackBerry. Dozens of high quality 3D games have recently been released to BlackBerry App World.

Aside from gaming, most other apps need to do a good job of presenting content to the user. This could involve weather forecasts, financial data, news, or location based services. In the past, BlackBerry developers have had to program these capabilities using Java. Today, the recognized path forward by developers is to use HTML5. This is a web-based programming language that allows a developer to write code one time, but publish an app for several mobile platforms including Apple's iOS, Android and BlackBerry.

Over the past two days at DevCon I've spoken to dozens of attendees about the future of mobile apps. What has become clear to me is that RIM will not suffer from an "app gap" problem in the future. HTML5 and third party gaming developer kits allow developers to deploy their applications to all of the major mobile phone platforms without re-coding their apps for each platform.

For RIM, this solves a major problem. It levels the playing field. It means that customers won't worry about being stuck with empty virtual shelves in their mobile app store. It means that mobile apps are less likely to be a source of competitive advantage for any one particular platform in the future.

RIM's goal is to deliver a compelling mobile app experience for its consumers while maintaining a strong commitment to enterprise customers and a continued focus on security. Collaboration with third-party gaming developer platforms and strong HTML5 initiatives look to me like a huge step in the right direction for RIM.

It may not sound terribly exciting for RIM to play catch up to iOS and Android, but we need to remember the company has over 70 million active BlackBerry users, and this number is growing substantially every quarter. Every step RIM takes to catch up to the two leading smartphone platforms means that Microsoft has more work to do in order to beat out RIM for the #3 position in the smart phone platform race.

I'll be leaving DevCon today. I came here to speak to as many developers as possible. I came with a fairly skeptical view on RIM's future. I wanted to leave with a better understanding of the company's competitive position. As an investor, this is not a story where you can draw conclusions based on any one particular conference. But I feel more comfortable as a shareholder having attended DevCon.

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I'm not ready to say that I'll remain a long-term shareholder, but I will be hanging onto my shares for now. I'm anxious to see how RIM executes with the Playbook 2.0 relaunch, and the initial launch of QNX-powered smartphones in early 2012.

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About the Author

Chris Umiastowski, P. Eng., MBA, has over a decade of professional experience analyzing technology stocks as a former top ranked equity analyst on Bay Street. Prior to that, he worked as an engineer in the telecom industry. His deep technology and analytical experience help him identify investment opportunities that come from sweeping change in tech-centric industries. More

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