Its been months since I last wrote something and what an uneventful few months it has been, with not much happening in the Indian Telecom scene thanks to the general elections. The International scene is equally dry. Barring the broadband stimulus package announced by the Obama administration, there has been not been much news which can be analyzed with great interest. But what has now become almost boringly predictable is the opening of app stores by every vendor and off late, every carrier, regardless of the size.
Mobile applications have been around for more than half a decade - a concept championed by apple. The volumes, however started building up only since the last couple of years and most, if not all of the credit for this goes to the smart phones. The Apple iPhone’s & the appstore success has transformed the mobile industry. In multiple industry shows, handset manufacturers enmasse started announcing their intentions to offer multimedia handsets and complementary app stores to rival the iPhone juggernaut. The launches are justifiable. Despite having smart phones on the market for years, Nokia, RIM, Palm and Windows have struggled to garner the kind of momentum that Apple achieved behind its flagship device - the iPhone, and its app store. Apple stands to generate revenue beyond just hardware sales as it earns around 30 percent for each paid application purchased. With more than 1 billion paid and free applications downloaded in just nine months, Apple’s competitors recognized this continued revenue opportunity post hardware purchase.
Given all the hoopla around app stores the carriers who always hated being dictated by OS makers, but could do nothing about it, started making noise that they will soon join the fray. The operators recognise this opportunity as a natural evolution for their product cycles. With plump customer base (customers are more familiar with carrier brand than an Ovi Store or Android Marketplace) and unbarred network access, they are in naturally advantageous position. Already there is a talk that operators will differentiate their offerings by providing only certified content and giving customers an option to test the app before making them pay for using the full version. This really for them as some say, a mechanism to turnaround their dumb pipes.
But with so many stake holders endorsing the concept, are the app stores too big to fail? Well the concept itself will not fail but most of its believers will. From fashion to home automation to games, almost everyone is getting into apps. The key concern is many players are entering the app business more to ride the hype without understanding what the consumer wants and what resources are needed to manage this business. In short there are more players out there who are getting into a business they know little about. Being successful in this business requires scale, a global reach, a deep product catalog and a seamless way to deliver content to consumers quickly and cheaply. Only specialists and those who partner the specialists will eventually survive in this ecosystem. So all those developer conferences apart, a trend will emerge where developers will side with a fewer more serious set of big players citing scales and cost efficiency, throttling the smaller less serious ones to death.
