Last week Questex Asia staged its first AppXchange event, in which speakers and delegates examined the state of application stores, how they’re transforming the mobile sector’s approach to content, and what role – if any – mobile operators could, should and will play in the apps-oriented world.
Here’s what we learned.
1. Don’t copy Apple
Whatever a cellco’s strategy might be for starting an app storefront, the worst mistake they can make is to try and copy the Apple model. Why? Because Apple is in the business of selling devices, which is where the company makes most of its money. Cellcos are generally in the business of acquiring subscribers and selling voice/data plans, so their application strategy needs to be engineered to drive that.
“Operators are in a great position to win in the app store business because they’re sitting on a wealth of CRM data, direct billing relationships and a large subscriber base,” said Kelvin Lee, senior GM at Green Packet.
Colin Yeh, director of group innovations for QTel (and EMEA board director at the Mobile Entertainment Forum) said cellcos can be relevant to the ecosystem as a distribution channel, a payment channel and a marketing channel.
2. Premium apps pay peanuts
Cellcos should remember that selling premium apps isn’t the only way application stores can generate new revenue. Other options, said Mike Lurye, product marketing director at Amdocs, include providing a billing platform for someone else’s apps store, go-to-market services for developers (such as apps testing, hosting, marketing), and in-app commerce, including ads, which will eventually outpace revenue from downloads anyway.
Of course, cellcos need not start out with such broad objectives, said Navin Wathan, head of product innovations at Maxis, which recently opened its own app storefront.
“We initially saw our app store as just a refresh of the front end,” he said, “but we now see it as a bigger opportunity for developers to get involved, especially local developers.”
3. Developers respect money
If cellcos want to attract developers to their application storefronts, they need to show a clear monetization path – preferably in the form of billing APIs.
“It wasn’t until we looked at opening the billing APIs that developers suddenly showed huge interest to work with us,” said Ashish Thomas, director of SingTel Group Innovations. “After that, the program grew so fast we had to expand the team.”
4. Defrag the OS
Possibly the biggest challenge the mobile sector faces in the apps space is that the current OS-driven model being championed by vendors is already threatening to refragment the mobile content market after years of work by standards bodies like the Open Mobile Alliance to bridge proprietary handset UI specs.
And that’s putting more pressure on developers who now face “huge issues of overhead costs and complexity”, said Simon Nicholson, director of mobile operator marketing and Java software at Sun Microsystems.
Nicholson recommended a warehouse model that “gives the developer a single entry point into the supply chain” and can also handle things like contacts and settlements.
Karl-Johan Dahlström, product manager of content planning and application acquisition at Sony Ericsson (whose PlayNow is actually an app store, it turns out) said that the mobile device sector needed to move away from tying apps directly to the OS and “look to the runtimes, virtual machines, widgets and other enablers on top of the OS to help apps go cross-platform, which will make things a lot easier for developers.”
5. Aim for the clouds
Ironically, that complexity is also a major factor driving interest in a cloud-based approach to mobile apps. Scott Seaborn, head of mobile technologies at OgilvyOne, pointed out that mobile ads and marketing campaigns have to work on all handsets.
“We use these applets that are really hyperlinks that punch through into the cloud and everything works there,” he said. “So I’m going to work in the cloud as much as my clients will let me.”