App Stores -- where next for operators?

Last week's Mobile World Congress in Barcelona saw an amazing number of announcements--more new handsets than you could almost count, operator statements on LTE deployment plans, a focus on 'going-green,' new alliances (the strangest being Nokia and Qualcomm) and the attempts by others to catch-up with the iPhone--which remarkably still seems to remain the benchmark for usability and desirability.

While this might be semi-standard stuff for Barcelona, the announcements surrounding app stores from Nokia and Microsoft, to be known as Ovi Store and Windows Marketplace for Mobile respectively, were perhaps of more interest for the long-term profitability of operators.

Nokia's announcement made almost no mention of how its service would benefit the operator, only saying it was a great business opportunity for content publishers with a revenue sharing model of 70 per cent going to the developer. The company stressed it had no ambitions to become a publisher and would source content from around the world, with the Ovi Store's key attribute being that the service would recognise what would be relevant to the user.

Microsoft was less forthcoming with regard to its app store--and that's what these services will be known as--merely saying mobile users would have access to the current 20,000 applications that are available for download, and its new Windows Mobile 6.5 OS would have an icon on the homepage providing users with 'one click' access to the service.

Not surprisingly, mobile operators seem to have ignored these two announcements, excepting that iPhone operators already have swallowed this uncomfortable concept in return for gaining subscribers and reaping the uptake in data traffic rewards.

Orange is one of the few operators to have positioned itself as an entertainment-oriented player and has been building the required ecosystem, including an active developer programme, that is vital to an app store's success. China Mobile is another that is pushing ahead with plans to launch its own app store in two phases this year, helped by its overwhelming dominance in its home market and its control over the value chain.

Other operators that are not in this favourable position may need to consider the Nokia or Microsoft options, outsourcing the work or undertaking a vigorous refresh of their mobile portals. But doing nothing is not an option. -Paul