BlackBerry's Biggest Problem

Mobile-software developers make money either by selling apps, add-ons, or ads. In at least one of these areas -- ads -- Research In Motion's (Nasdaq: RIMM  ) BlackBerry is coming up well short.

New data from researcher Millennial Media found that 84% of third-quarter mobile ad impressions came from Android (56%) and iOS (28%) devices. Handsets based on the BlackBerry OS accounted for just 13% of impressions, with everyone else fighting over the remaining scraps.

Neither Apple's (Nasdaq: AAPL  ) nor Google's (Nasdaq: GOOG  ) performance is surprising. Combined, they control two of the world's best-known mobile platforms and accompanying ad networks: AdMob for Android and iAd for iOS. How can RIM expect to compete?

Maybe it shouldn't. Given its corporate thrust, there's a good chance Research In Motion's 70 million or so users aren't interested in receiving ads or downloading ad-supported apps. Not yet, anyway.

But even if the users aren't interested in ads, developers are. Free apps on the iPhone and on Android handsets aren't charity -- sponsors fund them. Giving up the fight to be a great platform for mobile ads would mean alienating a whole class of app developers who need to make a living somehow.

I'll understand if this whole story feels like piling on for a company that cried uncle when it offered users $100 worth of apps as recompense for a multi-day outage that inconvenienced and angered tens of millions. At some point, enough really has to be enough.

When will we reach that tipping point? I've no idea. But if there is still time to keep BlackBerry growing amid the long assault by Apple, Nokia (NYSE: NOK  ) , Microsoft (Nasdaq: MSFT  ) , and Google and its Android partners, let it begin with a strategy for enriching the BlackBerry developer experience. Anything to recruit allies to a cause that's looking lost right now.

Do you agree? Disagree? Please weigh in using the comments box below. You can also keep tabs on the mechanics of the mobile market by adding any of these stocks to your Foolish watchlist:

Fool contributor Tim Beyers is a member of the Motley Fool Rule Breakers stock-picking team. He owned shares of Apple and Google at the time of publication. Check out Tim's portfolio holdings and Foolish writings, or connect with him on Google+ or Twitter, where he goes by @milehighfool. You can also get his insights delivered directly to your RSS reader.

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Read/Post Comments (9) | Recommend This Article (1)

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 October 30, 2011, at 6:50 PM, cbglobal wrote:

    Blackberry's biggest problem is B.S. articles like this one in the American media.

  • Report this Comment On October 30, 2011, at 7:31 PM, ampezzi wrote:

    Customers are really stupid. we don't need 1billion application or the same stupid game in 2500 versions....we are business man and not children.

    Apple is a really good toys. just this.

    The autor know that BlackBerry Bold 9900 and BlackBerry Curve 9360 Are World's First SIM-Based Smartphones to Receive MasterCard PayPass Handset Certification?

    (Maybe is not important...is a good think for research in motion and we have to forget).

    c'mon let's get serious, it's time to change target.

  • Report this Comment On October 30, 2011, at 8:33 PM, TMFMileHigh wrote:

    @cbglobal,

    >>Blackberry's biggest problem is B.S. articles like this one in the American media.

    Congratulations, sir. You're the proud winner of shenanigans for failing to specify a complaint :-)

    In all seriousness, what is it about Millennial's research do you find to be BS and why? What support do you have?

    @ampezzi,

    We've been hearing for years that Apple only makes toys. Tens of millions of handsets sold later, ostriches continue to insist that no one's really using the iPhone for business. I've never seen anything like it.

    Thanks much for commenting and Foolish best,

    Tim (TMFMileHigh and @milehighfool on Twitter)

  • Report this Comment On October 30, 2011, at 10:58 PM, etgh wrote:

    I'll try to be more articulate....

    RIM's biggest problem is media that is corrupt and co-opted by Apple. The "bought" media scans the news items looking for anything that might make RIM look bad, adds some additional drivel to make it more juicy and pump it out as news.

    It's OK, you're totally compromised...everyone gets it.

  • Report this Comment On October 31, 2011, at 8:58 AM, TMFMileHigh wrote:

    @etgh,

    >>'ll try to be more articulate....RIM's biggest problem is media that is corrupt and co-opted by Apple. The "bought" media scans the news items looking for anything that might make RIM look bad, adds some additional drivel to make it more juicy and pump it out as news. It's OK, you're totally compromised...everyone gets it.

    I'm not trying to be crass here but you're substituting wishful thinking for an argument.

    Can you at least comment on why you think Millennial's data is either incorrect or irrelevant?

    Thanks again for commenting and Foolish best,

    Tim (TMFMileHigh and @milehighfool on Twitter)

  • Report this Comment On October 31, 2011, at 11:50 AM, jelp2 wrote:

    Out of curiosity, are these percentages of the smartphone market worldwide?

  • Report this Comment On October 31, 2011, at 12:06 PM, TMFMileHigh wrote:

    @jelp2,

    >>Out of curiosity, are these percentages of the smartphone market worldwide?

    No, these are the percentage of ad impressions received via mobile handset. Market share is a different statistic.

    A better way to think of this might be "advertising share." Thus, only 13% of mobile ads in the third quarter were served via a BlackBerry, which probably means BlackBerry users aren't downloading and using apps that are ad-supported, especially when compared to their peers who own iPhones and Android handsets.

    FWIW and Foolish best,

    Tim (TMFMileHigh and @milehighfool on Twitter)

  • Report this Comment On October 31, 2011, at 12:29 PM, jelp2 wrote:

    @TMFMileHigh

    Thanks for the response.

    I am a BB user, for years now. I am no expert when it comes to this topic, so bear with me.

    I have a BIS account, there are an increasing number of apps which do have adds in them, at least in the free versions, which I presume is the same as having adds on a website?

    I've also recently read an article, which I'm not sure if it fits here, but it stated that with new WebKit on BB OS7, is showing up under iOS not BlackBerry.

    So I guess anyone tracking mobile use to there sites aren't seeing any or are seeing limited BB traffic because of this.

    There definitely aren't as many apps available as other platforms, but hopefully after the news at DevCon, more developers will come to BB or atleast port their apps from Android.

  • Report this Comment On October 31, 2011, at 5:28 PM, TMFMileHigh wrote:

    @BlairCrow,

    >>The stock price is far lower than it deserves to be. It will triple within a year. There is no doubt!!

    I like the confidence. How about making an outperform call in CAPS?

    Thanks for commenting and Foolish best,

    Tim (TMFMileHigh and @milehighfool on Twitter)

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