Can a carrier mobile app store rival the revolution created by Apple? How are mobile Web apps different from mobile micro sites? Can mobile operators really create an app store ecosystem? These are the questions we hear from industry experts studying the app store phenomenon. Let’s take a peek at some of the issues surrounding this exciting and strategic opportunity that carriers must grab at all costs.
The Carrier App Store Challenge
Today, app stores are riddled with fragmentation across devices and operating systems, and carriers are unfortunately the root of the problem. Diverse phone packages, device form factors, operating systems and data plans add complexity and confusion to the app store model. With the streamlined approach of the Apple, Research In Motion (RIM) and Nokia app stores, how can carriers compete for talented developers, publisher support and consumer mindshare?
The Data Plan Equation
In concept, carriers have gotten the app store strategy right – but when we look at Verizon V Cast or AT&T’s Media Mall, there’s still no easy, intuitive way to create applications for deploying across all carrier handsets and operating systems.
The difference between open mobile app stores and carrier on-deck offerings is mobile broadband usage. It’s a breeze to download and purchase an application on an iPhone, BlackBerry or Android handset, since these phones are sold with data plans. That’s a huge shift from buying carrier features phones, where consumers have the option to purchase data plans separately, or have the data plan bundled with content apps available on the deck. What about the majority of subscribers that use feature phones with no data plan?
Multiple app stores on the same handset?
The other issue for carriers to address, primarily for the app developers, is fragmentation. As a majority of carrier smartphone sales revolve around BlackBerry, Nokia and Android phones, what does a carrier app store mean on these platforms? What’s the user experience? Will consumers see an Android Market and a V Cast app store on the same phone?
Will carriers decide to create another walled garden around their smartphone platforms, i.e., requiring a BlackBerry app to be certified by AT&T, Verizon Wireless, Sprint, et al before it gets into each of the carrier app stores? How is it different from the zillion Java versions that have been plaguing the mobile industry for ages? The time and resources spent by developers and publishers to support multiple carrier app stores for the same handset platform will increase astronomically, denying them the economy of scale that an Apple model has successfully executed.
The Opportunity for Carriers
IMHO, carriers need to look at their inherent strengths and weaknesses, leverage industry momentum with open platforms and be more open to “openness,” to successfully execute on their app store strategies. Focusing on the following areas will help carriers set the agenda for the next generation of revenue streams, as mobile voice and SMS revenues continue to dwindle with flat rate pricing wars and net neutrality issues.
1. Sort out the smartphone business model: Let the smartphone device manufacturers handle the app stores on their devices, while carriers evolve into a “mediation layer” across these smartphones as well as their own feature phones. The key for carriers is the ability to generate sustainable revenue streams from open mobile app stores.
2. Address fragmentation: Carriers may not realize it, but they play a large role in creating confusion among developers and publishers. There are complexities for developing apps across each carrier handset and each operating system. We’ve learned a better way from Apple: There is one Apple app store. Period. Carriers must embrace this approach, offering developers one branded carrier app store, enabling ubiquitous deployment of apps across all devices.
3. Simplify app creation: Joint carrier initiatives such as the joint innovation labs (JIL) help to create an open API environment for developers across multiple carrier handsets. Couple that with HTML-5 based widgets, easy app creation tools and integrated billing interfaces and carriers will go a long way towards enabling rapid app creation across handsets.
4. Entice feature phone users: Publishers and advertisers invest in the numbers, and feature phones easily surpass the number of smartphones sold. Carriers must target these subscribers with their app stores to experience an increase in data ARPU across feature phones.
5. Offer viable ad-supported business models: There is a huge opportunity to monetize carrier app stores with subscribers using non-iPhone, Android and BlackBerry devices without a data plan. Carriers must examine how they are marketing their mobile apps and how to effectively bundle data plans with their app store offerings.
Bottom line: Carriers need to enable developers to create and deploy applications easily, affordably and across all their devices to reach the broadest direct-to-consumer audience – not just iPhone or BlackBerry handsets.
Srini Dharmaji is founder, chairman and CEO of GoldSpot Media.