Vodafone’s app-store. Can MNOs compete with OEMs? May 14, 2009
Posted by wirelessinformatics in Mobile Operator, News, User Experience.trackback
App Stores really are the modern-day gold rush. Where Mobile Network Operator’s (MNO) had their content portals, handset manufacturers saw an opportunity to build brand loyalty by making available a sea of user-generated ‘content and applications’ to enhance the use of their devices.
Although still in its (relative) infancy the app-store path has been well-trodden thanks to the efforts of Apple, Android, Nokia Ovi et al. Now Vodafone becomes one of the first major MNOs to embrace the app-store model; but can the MNOs compete?
The MNO certainly has several advantages. Billing, for example. The MNO owns the billing relationship with the consumer, affording a more impulsive buying experience for paid-for applications. What may, on a manufacturer’s store, require a credit card, paypal (or other third party mechanism), now appears on the consumer’s airtime bill or get’s deducted from pre-pay credit. Easy.
MNOs may also allow developers to leverage core network assets. LBS (location based services) is the most obvious example, and developers working within Vodafone’s Joint Innovation Lab (JIL) initiative will soon be able to leverage subscriber locale to enable a host of third party applications that tap into the current zeitgeist for geo-tagging, location etc.
However, in the manufacturers’ favour is the ability to provide developers with access to a handset’s core functions. This affords tighter integration and a host of ‘consumer’ use cases for otherwise mundane handset features (accelerometers anyone!). Both Android devices and iPhones demonstrate this very well.
There are often more than a thousand different handset makes and models on an MNOs network, making it impossible for an MNO sponsored app-store to deliver this degree of personalization across its entire subscriber base. Instead, as is the case with Vodafone (see the official press release), it’s likely that MNO app-stores will focus predominatly on mobile internet-based apps.Far easier to control and maintain a consistent user experience across a wider base of device types.
App stores are as you point out an interesting part of the value chain for the MNOs and the Device manufacturers. The challenge they have is the focus required to do a good job and whether or not they will be able to alter their businesses to enable the focus required. Apple has always been a brand based business, the solutions they sold have been about the end to end consumer experience. This culture is the reason itunes was even thought of and why in other more successful manufacturing businesses this now obvious link, to enabling content access and generating a revenue stream, was not.
So Vodafone is a network engineering company first and foremost. Consumers have not associated with the vodafone brand beyond access – this is a fact based on the years and years of consumers asking for the latest nokia phone – not the new vodafone service. I know this has changed slightly in recent months with Music offers, but largely this is still the case.
Nokia is a brand known for devices – not content. I look at the 5800 music offer – which on the face of it is an incredible offer for consumers – but it has not received the press or the consumer excitement that the iPhone received when it was launched.
Is apple an anomoly? Can anyone think of another Apple business? Is apple Steve Jobs, is it therefore sustainable?
Apple is exceptional and an exception. Are they the exception which proves the rule or changes the rules?
My thought here is the former. They are small in the grand scheme of internet commerce and laptop and mobile phone sales. They have made a significant dent in the past two years on the smartphone market by just showing what great user experience can deliver – but they are still a small piece of the overall mobile phone handset sales.
The development of the handset market is starting to show a degree of standardisation around operating systems – Symbian, MSFT, Android, OSx – if / when the variants on these platfroms placed on them by the operators are removed, then this will make life easier for app stores and other service providers to offer solutions to large markets based on the platform and not the network.
At this point doesn’t the challenge from the network/device independent service providers become very real. This is where the likes of Google and others play. Will they carry over their dominance of the fixed internet world to the mobile? What should be the difference? Services should in theory become more tailored – as per your point about the networks enabling greater degrees of personalisation – but will be based on the same broad internet concepts.
I think the key to all of this is the word independence. The ability to act independently of network or device will be, I believe, critical to the longterm success of any cloud service.
For the bigger market wont people want independent solutions? Does this not provide consumers greater degrees of choice and flexibility in the way they manage their mobile life?
So lots of words here, but my belief today is that in order for Ovi / Now and other services which will be launched to be successful in the long term they have to be independent of the device and network access point.
If this is true – consider the headaches from a customer satisfaction point of view for these guys? Vodafone company supporting and Orange customer? A SEM Customer receiving support from a Nokia business? More awkward, I guess, would be the other way round Optus supporting access to a Vodafone app store?
Therefore I agree with the point in the blog regarding the access to the users being an advantage to the MNO’s and Device Manufacturers, but I am not sure this will serve the interest of the consumer unless it is independent, and this will be very difficult for these companies to provide.
More questions than answers I’m afraid but, a fascinating part of the industry developing.
It’s a long time, I’m sure, before we see anything vaguely like an open app-store that is independent of the device and network. Once again it all comes down to handest fragmentation and the ability to write once>publish anywhere. The closest we can get today is to focus an app-store solely on web applications. This is Voda’s approach and is the only way that they can guarantee handset support across such a wide portfolio of devices. The only loss is the ability to truly integrate an app into the device and allow it to access / leverage core features and functions of the hardware / OS etc.
Let’s take app stores for what they are; essentially the evolution of the legacy WAP portal and an aggregated store front for content, widgets and services. Will it even be the OEMs / MNOs that ultimately dominate? I’d venture that eventually app stores may be best leveraged by media brands. The only difficulty, as I referenced in the original post is that MNOs control the billing relationship and marketing channel to the end user. Therefore, is there yet another opportunity at play; for MNO’s to ‘rent’ access to the subscriber base; ie: allowing a partner to leverage the MNOs billing infrastructure / CRM data etc.