Apps 2.0: App Stores over Operators
Posted by Guest Author in Dev Perspective, Showcase July 13, 2010 2 Comments
When FP started out our clients were exploring all sorts of business models to distribute their content: sometimes being paid license fees by operators, sometimes being asked to pay (AOL-style) for access to an audience, before settling on pay-per-access or subscriptions. We’ve seen it all.
So at the Telco 2.0 event held in London this April, I gave a very brief presentation contrasting some experiences we’ve had launching products through operators and via application stores. Today, most commentary and press around mobile holds that operator portals are increasingly irrelevant and that all the action is in the “app stores” – a picture that gets more muddled when you consider that operators are launching “app stores” with the same vigour that they once launched portals. Our experience is that whilst this is true in many cases, close up, things are more nuanced.
Certainly operators are much harder to work with, both technically and commercially: personal relationships with individuals within them take time to build, and it’s unusual to find technical approaches, APIs and capabilities common across them. Industry efforts which have tried to abstract out the differences, like PayForIt, have tended to deliver the lowest-common-denominator; in PayForIt’s case this involved sacrificing the overwhelming advantage of operator billing – it’s utter convenience – and replacing it with a sequence of click-throughs, confirmations and opt-in pages.
Operators also tend to maintain product portfolios which are curated by hand, limiting the sizes of categories within these portfolios and emphasising editorial judgements around app quality or strategic fit over the Darwinian survival-of-the-fittest which characterises OEM app stores.
But I wouldn’t discount them; they can be excellent at driving large quantities of domestic traffic, across a wide range of devices. One side-effect of this is that cross-platform support becomes much more important when you’re doing a deal with an operator who wants your app on 70% or more of their device portfolio.
In contrast, app stores are easier to develop for: for OEM app stores (which are most of the stores out there today) you’ll end up supporting a smaller range of devices, and can reach a global audience; those that you reach will also tend to be more active, given that the OEMs with app stores are those with the best application platforms. Plus, even the more opaque and long-winded certification processes (I’m looking at you, Ovi) are quicker to work with than the operators.
We’ve found that being chosen by Apple to sit within their “What’s Hot” listings can make a huge difference to your download figures, but most applications are fighting it out with direct competitors to edge up the rankings, and can’t rely on being plucked out from on high.
If you’re targeting a single platform with your app, it’s hard to argue that an OEM app store doesn’t make a good first port-of-call, but if they can offer any distribution for you, key operators in high-value territories will be well worth talking to. It doesn’t hurt to wear a belt and braces…

Talking to Vidhya Gholkar at Vodafone working with others (such as Telfonica’s James Parton) on the wholesale Applications Community (WAC) Developer Relations. I told him about this article and he admitted that there could be difficulties, but felt that the “temperature” was changing this regard. he further pointed out tome that WAC will be a good bet to get apps out on a variety operators on a number of different handsets. He also said they have a survey to help WAC button down some issues (http://www.surveymonkey.com/s/23R9D55). I think that it could be a great way of influencing WAC to do the right thing for developers.
There are certainly challenges for Operators to become relevant for developers. Some of those issues are highlighted in the recent Developer Economics 2010 report available for free here: http://bit.ly/d0HkTF
Operators must overcome major credibility and trust issues, and this will not happen overnight. The approach has to be consistent, collaborative and transparent. As you would expect, I do passionately believe operators have something to offer, IF they can get the mind set, processes, business models and tools right. Some of those ideas are explored here: http://bit.ly/bFukyJ
At Telefonica we are big believers is taking our story & tools to developers, rather than expecting developers to come to us. We are working on a number of exciting partnerships which we hope to be able to announce in the not too distant future.