Apple's Burstly Buy Tightens the Developer Community

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In a week where Facebook (NASDAQ: FB  ) made headlines by offering $19 billion for a messaging company, Apple (NASDAQ: AAPL  ) acquired Burstly, a small application testing and analytics company for a price so small that there was no press release. Although it seems like these two acquisitions are polar opposites, they are actually similar from a strategy perspective: community development.

Facebook acquired WhatsApp because of the extensive user base  on the belief that:

WhatsApp is on a path to reach over one billion people worldwide in the next few years. Internet services that reach a billion people are all incredibly valuable.

That's it, no huge monetization plan, no intent to raise subscriber fees, simply that a large community of people is valuable.

Apple is saying something similar: Developers are valuable. While Testflight is free, Apple intends to charge for add-on features. But revenue isn't likely to be the reason for the acquisition, so why bother? Improving the developer experience and making it easier to work on iOS appears to be the answer. This can be critical as Android continues to gain share.

There is a lot of speculation about what this could mean and Marco Tabini, a contributor to MacWorld is quoted as saying:

[I]t could be a sign that the company is working on improvement to its distribution process that could help developers better manage their betas and track the deployment of their apps.

That may be, but there's more to Burstly than just application updates. Burstly has only two products (TestFlight and SkyRocket) but they span a wide range of functionality. Testflight is the beta testing product that offers over the air testing, application team management, and reporting. SkyRocket offers developers a simplified way to monetize applications with advertising. By tying the different ad forms together, the developer can focus on creating the app rather than managing the advertising.

Depending on who you are talking to, the real value of Burstly changes from analytics to distribution to advertising.  This is a sign of a good platform, different people see value in what they use. To a developer, the value could be in analytics or distribution. To a bean counter, SkyRocket's advertising platform can help determine which ads will be served and to whom.

Apple wasn't kind enough to developers to allow Burstly to continue supporting Android development though, which shouldn't be a big surprise. According to Testflight's website, Android beta testing will stop by March 21.

As Android continues to take share, its critical for Apple to maintain its developer relations. As Venture Beat pointed out last summer, Android is winning the tablet wars and Apple needs to ensure its partners have a good development experience. Whether it's out of fear or love, it doesn't matter, in this acquisition everybody wins. Developers on iOS get tighter and more extensive integration. Apple customers continue to receive high quality apps. But lastly, and perhaps most importantly, shareholders get the comfort of improved community relations without a difficult-to-justify price tag.

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Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On February 26, 2014, at 1:58 PM, SimchaStein wrote:

    Is Apple really losing the tablet wars? Are e-readers really tablets? The article is about Burstly, tools for developers of Apps. Does Burstly apply to the e-reader market?

  • Report this Comment On February 26, 2014, at 4:39 PM, marv08 wrote:

    "While Testflight is free, Apple intends to charge for add-on features."

    As Apple has said exactly nothing about the reason for the acquisition, and even less about their plans... What is the source for this "intention"?

    "As Venture Beat pointed out last summer, Android is winning the tablet wars..."

    Hahahahahaha... You're talking profits here? ROFL.

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David Eller

I started contributing to the Motley Fool in 2013. I have held research positions at two investment banks and two hedge funds before trying more entrepreneurial ventures. I'm passionate about helping people find freedom in financial independence. Feel free to add comments and start a discussion. I hope to use these articles as forums to learn from you as well as share my opinion.

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