Free Premium Apps for Blackberry Users – any impact on Bango Business?

RIM – the makers of the Blackberry – (NASDAQ: RIMM; TSX: RIM) announced today that a selection of premium apps worth a total value of more than $100 will be offered free of charge to subscribers as an expression of appreciation for their patience during the recent service disruptions. The apps will be made available to customers over the coming weeks on BlackBerry® App World™ and will continue to be available until December 31, 2011.

See: http://press.rim.com/release.jsp?id=5214 for a list of apps and more details.

Bango gets a very small share of the sale of each BlackBerry App World App, for providing the carrier payment infrastructure, payment processing and settlement services.

If Apps that would otherwise have been sold are provided free of charge, then during that 8-10 week period Bango would lose that portion of its revenue.  Ten Apps are being offered free of charge in App World – out of thousands that are for sale, so it is unlikley there will be a significant revenue impact.

On the other hand, it is a common practice to give away Premium Apps in some of the other App Stores – most notably Amazon’s – offer free Premium Apps to drive new users to their store, and drive customer delight and encourage more sales later.  See http://www.amazon.com/mobile-apps/b?node=2350149011

There is therefore a possible upside in this Premium App give-away in that it may stimulate users to buy more Apps and to visit the App World more often.

We believe this is a generous gesture by RIM to reward users for their patience and loyalty, which could have the side effect of helping more users discover the benefits of quality Apps on their BlackBerries.

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