The content game heats up and there are some new players declaring a new game. Obviously, the players are Apple with the “1 billion dollars” AppStore and Google’s market running on its Android OS.
Today, the mobile operators dominate the content market by controlling the mobile portals that are pre-configured to the devices they sell.
There is a shift to “off-portal” content consumption where users buy and download mobile content from sources other than the mobile operator.
There are two main problems with off-portals; The major one is the billing problem because off-portals cannot use the mobile account in order to charge the consumer (unless they use different solutions that the operators offer).
The second problem is the marketing, how do you move a crowd of consumers who are used to consume their content easily from the operator’s portal to use other portals where most users do not enter web addresses that are not precompiled on the phone.
These factors held back some of the progress and explosion of the mobile content market.
Now come Steve Jobs, with the AppStore and forces operators to use Apple’s content store for their iPhone. Of course this is something the mobile operators should not like as they need to get a smaller share of the revenues from the content. The secret is that it is not too bad for the operators. Apples marketing machine wants you to think that every new mobile purchased is an iPhone but the numbers show a different thing. More than everything, the iPhone is a hyped device. And as such a device, they know that the losses from the content are limited to the small market of iPhone users. This comes with the fact that when you launch an iPhone you get all the benefits of launching the hyped device which position you as an operator as a trendy operator with “cool” devices.
So you lose some revenues but you gain some publicity and branding points… when these elements are weighed in some cases they bring more benefit than losses to the operator.
AppStore benefits a standardized way to bill the customer using the operator, marketed by the operator and using inherent tools in the device. So the AppStore is actually a crack in the dam of the operators’ supremacy in mobile content. Somehow device manufacturers succeeded in penetrating the closed garden of the operators.
Still, operators do have control over the devices and the network and they can limit the move if they realize it is an imminent risk.
Google with its Android Market tries to follow Apple’s footsteps and if they succeed their potential is much greater than the AppStore. Android is an OS for licensing and many manufacturers plan to have Android-based devices while AppStore leans on the iPhone alone.
The long tail of mobile developers suffered a lot when working with the operators who requested support for usually over 20 different devices and a developer needed to negotiate and work directy with different operators in order to distribute his or her software.
In a single OS and detailed specification, like in the case of the iPhone and the Android phones the headache of cumbersome porting is spared.
Developers only need to have an account in the store and declare their requests in terms of revenues per item.
Now, Symbian, the dominant mobile OS company needs to somehow fight back and provide its developers with the right platform to distribute their content directly to the end-users. With over 100 Million devices in the market, if Symbian gets to offer the same offer, we do expect to see major changes in the content market.
Update: It seems that Microsoft “App store” named Skymarket will be launched with the new Windows Mobile 7 OS.
Android Market pictures:
Related articles by Zemanta
you should check mPortico for the real answer
good article. two points I disagree with:
*operator’s app revenue from iPhone may quickly (if it doesn’t already) exceed app revenue from all other phones because hype is so high and acquisition is so easy. ringtones and wallpapers aside, the **purchased mobile applications** market is relatively small and immature. the iPhone likely isn’t forcing operators to give up revenue for other forms of goodwill.
*there is no evidence to suggest that commonality of the Android developer experience / API set across devices will be any better than that it is for Windows Mobile – which is actually very good and should be much better with Pocket PC and Smartphone combined in WM 7. It’s also not that bad for Symbian/S60 (UIQ doesn’t matter any more), although Nokia models dominate and Nokia adds “lead features” (beyond simply adopting newer S60 releases) in almost every model that fragments the developer experience to a somewhat greater degree.
I do not underestimate the ability of the App store to generate revenue even after the hype goes down.
Truly not the same case for the operators which give Apple the power to run the App Store.
Saying you are right and porting Android applications will be same as Windows Mobile, One thing is sure the Android Market will help developers spread their apps.
That way Microsoft is working on it own store “Skymarket”.
The war on developers has started!
Looks like offline portals are going to catch it’s market. This is a good chance for start-ups like mPortico to develop solution for market needs.
Android is the underying OS for Clearwire’s 4G WiMax roll-out in the United States. Given the companies who have invested in the joint venture (the #1, #2 and #5 US cable companies; the #3 mobile operator) have a national footprint, this is a great time for developers to begin experimenting with Android applications.
Harel, as you correctly pointed out the major problem with off-portal stores is the billing problem because off-portals cannot use the mobile account in order to charge the consumer.
Interesting to see that Handango, that has been the leading app store for years, has just partnered with Best Buy to offer an in-store app sales – soothing the billing experience for less savvy users.