This was a major theme throughout the event. The iPhone app store is viewed as the runaway leader in application downloads and sales. Frankly, I believe it is a definition issue, since more than 70% of paid applications are games. If that is true, than the operators have historically had a decent business prior to the iPhone. But off-deck activities, iPhone kills.
Operators view the Android as a real opportunity for them to get in the game of off-deck app stores. The rapid growth thus far of Android and the clear expectations of further dominance have the operators scrambling to put together an android offering for subscribers to try and get a cut out of the business. Growth is clear, since devices are being launched with android and more than 20 million will be in the market in 2010 alone. Google still has not created commitments with operators, but I believe they will, since it is either that or expecting users to create new billing relationships directly with Google. That will be a major barrier for paid content. But they are trying to create their own silo – like apple, with a focus on cloud computing (PC / mobile crossing) and trying to create a more PC like experience with android (flash, etc.). This may be their approach – and may mimic the PC market – where all Google content and services are free and the revenue is from advertising. Google just acquired Admob from $750m to manage the mobile ad business for them. The mobile ad market is a challenging concept, and they know it. So it seems they are keeping their options open.
To battle Apple, the world’s largest mobile operators have joined forces to launch an open international applications platform. The so-called ‘Wholesale Applications Community’ (WAC) will include the following operators: America Movil, AT&T, Bharti Airtel, China Unicom, Deutsche Telekom, KT, mobilkom Austria, MTN Group, NTT Docomo, Orange, Orascom Telecom, Telecom Italia, Telefonica, Telenor, TeliaSonera, SingTel, SK Telecom, Sprint, VimpelCom, WIND, Vodafone, China Mobile, SoftBank and Verizon Wireless. The group serves a combined 3 billion mobile customers across the globe. LG, Samsung and Sony Ericsson pledged support. The idea is to allow app developers to only need to develop for one standard environment, and not require development per device support. In addition, the operators want a cut of the app market and strengthen their brand. Not sure if it is going to work. Frankly, most people I spoke with (including people from operators on the above list) basically laughed at it. Operators generally demand consensus on industry decisions. So to assume 24 operators can all agree on anything is a bit of a joke.
Ericsson, which is the world's largest mobile infrastructure supplier, has launched a white label app store as a service to mobile operators. The company claims it is already in discussions with a number of operators regarding them using the new service, known as ‘eStore.’ eStore was targeted for use on any device, not just a select few and to create rev share deals for the operators and for Ericsson. Important to note, they are NOT part of the WAC initiative, so unclear where they will fit it, or if the Ericsson + WAC + iPhone + android + RIM + Windows + OVI + Samsung +++++ will actually help or hinder the market fragmentation and confusion.
Samsung is hedging itself all over. 10 millio android devices for 2010, 5 million Bada devices, they will launch Windows devices at the end of the year, they are supporting the WAC initiative, etc. The only real definitive issue that they have said was that they are no longer launching Symbian devices. This basically means to me that they are concerned about device sales and not content sales. They may very well emerge as the premier smartphone brand with devices addressing all types of users in all types of markets. In addition, they are backing (my theory of) the mobile operators’ interest to create a very fragmented market to minimize the iPhone control over the market.
Nokia OVI (sucks)
There big announcement – they launched OVI maps. There biggest download category is personalization themes. As my daughter would say, “that is sooooooooo 2002!” They are a few years behind the industry. OVI will also serve the new MeeGo OS, but OVI is thus far a dismal failure. Nokia is still the largest and best feature phone company in the world, but they are clearly lagging in the smartphone industry, which is the main driver to data services. (I saw many Europeans with either an iPhone or Blackberry (or both!) and a Nokia for talking – 3 devices J).
Shopping mall approach (Telstra and others)
There was murmuring about operators acting like malls, while OS and device companies will provide the stores within the malls. Only Telstra from Australia ans some Far Eastern operators viewed it as a real option. I believe that it is somewhat compelling, as long as the mall will enable the app developers to have one development requirement, and the mall will prepare the content per store with standards (similar to WAC). The truth is WAC may morph into a mall.