Less is more
Market researcher Canalys reckons mobile operators still have a crack at the rapidly growing mobile apps market despite having few unique apps to offer. In fact, the already bewildering choice presented by the big app stores can be a negative that operators can exploit, it's suggested.
"The leading stores already have hundreds of thousands of apps, so it's hard for operators to compete with those numbers," said Canalys analyst Tim Shepherd. "On the other hand, too much choice brings serious problems in terms of application discovery for both developers and users, which operators can turn to their advantage."
On first impression, this stance is counter-intuitive - surely offering less is bad. But the rationale is that operators offer app stores that exist in parallel to those provided by the platform, which offer easy access to the most popular types of app, as well as added value such as reviews, suggestions, etc.
Right now Canalys must primarily be referring to Android, as Apple wouldn't stand for this sort of thing and the other apps stores are nowhere near as large. The precedent is already in place with Android, as we discovered while talking to LBS provider Telmap at MWC this year, and operators already offer one or two apps. But whether they can shift the kind of numbers that would make the endeavour profitable is another matter.
"Some operators are concerned that having their own branded app stores will appear as a throwback to the ‘walled gardens' of the past," said Shepherd. "While consumers would probably object to operators installing their app stores in place of vendor ones, there is no reason for operators not to pre-install their app stores alongside vendor stores to compete on user experience.
"As more content and services are delivered over their networks, many MNOs are aspiring to move up the value chain. When it comes to detailed subscriber data, operators certainly have the competitive advantage. While they must clearly be careful to respect their customers' privacy, the data they hold leaves them well positioned to propose targeted marketing services, such as promotions and recommendations, as well as richer editorial guidance, better localization, improved security and simpler billing processes."
Canalys also offered some forecast numbers. App store direct revenue from the sale of apps, in-app purchases and subscriptions is expected to hit $7.3 billion this year and almost double to $14.1 billion next year, reaching $36.7 billion by 2015. 419 million smartphones and 43 million tablets are expected to ship this year.
