If you tried to visit the BBGeeks Store today, you might have noticed your browser redirecting you to Mobihand.com. That might not seem all that odd on the surface; after all, Mobihand does power the BBGeeks Store. Yet you won’t see the normal selection of apps that appears on the main screen. Instead you’ll see a letter addressed to Mobihand customers. The long and short of it: they’ve decided to close the app store. This has been a long time coming, to be frank. While Mobihand provided us with a way to provide users with apps and make a couple dollars here and there, it clearly wasn’t built for the long-haul. That was no fault of theirs, of course, but of the handset manufacturers who want to keep their users on their own platform.
Once RIM launched App World, Mobihand’s days were numbered. Clearly RIM intended to do what Apple did with the App Store, and what Android did with Google Play (then the Android Market). When a user buys an app from Mobihand, RIM doesn’t get a cut. The profits go to Mobihand, the developer, and any affiliates involved. When you buy something from App World, the profits go to RIM and the developer. Plus, you remain on RIM’s property the entire time. Clearly they’d rather this.
The problems for Mobihand are nothing new. At BlackBerry Cool, Kyle McInnes first reported trouble last November, noting that they had many outstanding debts to developers. A few days later he reported that they were looking to be acquired. That didn’t happen, and it’s easy to see the reasons why. Not only did RIM hurt them with App World, but the declining nature of the BlackBerry platform in general surely hurt sales.
The saga isn’t over yet, either. If you scroll down on CrackBerry’s post, you’ll see a few developers in the comments complaining about the money MobiHand owes them, a few of them mentioning lawsuits. Surely we’ll hear a bit more from those developers in the next few weeks. MobiHand will stay in business, though, so they’ll have to deal with those debt collections one way or another.
So how did MobiHand get into this position? It pretty clearly looks like a case of a market disruption throwing a wrench into their business. Like any business they have a cost structure, and when someone comes in and siphons off their revenue they’re going to suffer for it. Like most businesses they probably operate with a line of credit, and then have all sorts of expenses to cover: salaries, taxes, mobile credit card processing, server space, and other very expensive items. To see RIM jump into the app game was simply too much. Combined with the platform’s decline in the profitable North American region, and it’s a certain death sentence.
According to the letter, Mobihand will stay active for a few more days so you can get your activation codes and download any apps in your profile. But after that, app support ceases. And, because developers can’t hand out coupon codes in App World, you’re pretty much stuck unless you want to pay for the app again. It’s an unfortunate situation, but one that we’ve seen coming for a while; you’ll notice that we’ve been pointing people towards App World for quite some time now.
It’s been fun.