The rise of apps storefronts has been a double-edged sword for the mobile content ecosystem. While Apple's success with the App Store has set the template for rival smartphone platforms to create apps channels and retail platforms, it's also resulted in a situation that both apps developers and the mobile industry had been trying to avoid for years: fragmentation at the handset level that forces developers to write multiple versions of apps that can run on iPhones, BlackBerry devices and rival smartphones running Nokia's Symbian, Google's Android, Microsoft's Windows Phone and Samsung's bada, among others.
At this year's Mobile World Congress - where keynote speakers either voiced their concern over the fragmentation issue or insisted that the problem was practically unsolvable, as no existing OS player was likely to fold anytime soon - a group of 24 cellcos announced a new initiative targeting the fragmentation problem. Backed by the GSM Association, the Wholesale Application Community (WAC) revealed its intention to create a single harmonized process for mobile apps developers to create apps across billions of smartphones and feature phones by essentially focusing on widgets and web-based apps.
The WAC announcement was vague on specifics, as the initiative had been finalized literally hours before its first press conference. In May, however, WAC revealed some more details on its strategy, timetable and potential business model.
WAC interim chief and OMTP CEO Tim Raby confirmed that the organization will build on specs already developed by JIL (Joint Innovation Lab) and OMTP (via its BONDI standard), with the intention of combining their widget framework standards into a common spec.
But the secret weapon that could make mobile widgets compelling to both apps developers and consumers is the OneAPI, the GSMA initiative that allows apps developers to leverage network APIs consistently. WAC's JIL/BONDI specs combined with OneAPI will help developers create web apps and widgets with far richer functionality than before, and for a far larger market - namely the billions of feature phones that don't use smartphone OS platforms.
Raby also released the first details of WAC's proposed business model, which will involve revenue sharing for everyone in the value chain - from the developer to the retailer and the cellco - and WAC itself, although WAC will operate strictly on a non-profit basis. The WAC business model will also include a B2B option for cellcos offering up their network APIs and customer-care capabilities.
Further details will have to wait until July, when the official WAC company will be established and its board elected. Raby says WAC will reveal its finalized business model then, followed in September by the SDK, materials and documents for developers. WAC will stage its first developer event two months after that, with the goal of officially opening for business at the next Mobile World Congress in February 2011.
Between now and at least July, there remains a number of unanswered questions for developers to puzzle over, such as revenue sharing breakdowns, whether the apps will be distributed via carrier-branded apps storefronts or other means, and how many handset makers will back WAC. Only Samsung, Sony Ericsson and LG are officially onboard. RIM and Sharp have pledged cooperation with WAC, and the OMTP's involvement could bring OMTP member Nokia into the fold as well. The LiMo Foundation is also interested in WAC (via BONDI), which could also bring LiMo associate member Motorola to the table, although Motorola is currently banking its current strategy on Android devices, as is HTC. Apple is widely expected to stay well away.
An even bigger question is just how effective WAC will be at addressing OS fragmentation, since technically it's giving developers yet another platform to target without consolidating any of the existing OS platforms.
Even Raby admits that while web ubiquity "is a core starting point to the write/submit once, deploy/sell everywhere scenario that developers have been asking for a long time," WAC's widget and browser-based apps strategy will complement OS-based apps storefronts rather than replace them.
"A lot of operators actually want Apple to continue offering its App Store, as well as Google and Android Marketplace and others, and end-users also want apps than run natively on their device because of better performance," Raby says. "So we're not mandating a replacement of those stores. But if you look at games, people play console games yet web games are also very popular. So there's room for both."
What WAC is really doing, Raby explains, is giving apps developers greater choice in the types of apps they can create while expanding the range of devices well beyond smartphones.
"If you want to develop an app for the iPhone, you only have two choices at the moment: you follow Apple's rigorous process, or you write a web-based version for Safari and lose the richness you'd get if you write for the device," Raby says. "What we're doing bridges that gap with a third choice: you can use your web assets and still provide a rich experience [with OneAPI], and on a far greater scale."
Fall and decline
If nothing else, the WAC's web-centric approach is arguably forward-looking in the sense that widgets and browser-based apps are at the forefront of the current interest in moving to cloud-based apps and services. Google has been instrumental in talking up the web as the future of mobile apps, but at least one analyst firm, ABI Research, has produced some numbers backing that vision - to a point.
ABI senior analyst Mark Beccue says that consumers downloaded 2.4 billion apps from smartphone apps stores in 2009, and the growth rate will crest just shy of seven billion in 2013, after which app store downloads will start to decline.
That doesn't mean app stores will die out, Beccue cautions. "Following the 2013 peak in demand, the number of downloads in 2015 will have decreased only 7% or 8%. But as our use of the mobile internet evolves, demand will increasingly shift elsewhere."
One factor in that projection is the rise of popular apps being preloaded on mobile devices, particularly social networking apps, but the web will play a major role in the demand shift, Beccue says, as well as the launch of cellco-run app stores targeting feature phones, which could mean access to developing markets where smartphone penetration is lower.
Another factor that may work in favor of WAC is that despite all the hype over app store download figures, developers are becoming increasingly unhappy with the current storefront model.
Part of that is related to vendor-imposed restrictions on apps development, the most visible example of which is Apple's current and controversial ban on Adobe Flash and all third-party APIs not approved by Apple.
Developers also don't care for the 70%-30% revenue sharing breakdown pioneered by Apple and adopted by most other platforms. A recent survey from Evans Data found that 80% of apps developers in North America dislike the 70/30 split, with over 70% adding that they want to be free to set their own prices rather than have them dictated by the storefront owner.
Between that and other issues like content restrictions (such as Apple's widely criticized policy of rejecting apps considered too sexy for the general public), only 15% of respondents bother to use apps storefronts as a sales channel, while over half prefer direct sales.
Whether WAC will capitalize on that discontent by differentiating itself on price controls, revenue splits and content restrictions remains to be seen, of course. For the time being, says Rethink Research analyst Caroline Gabriel, WAC still has a long way to go to make its case to developers that cellcos can not only work together (even with direct competitors) to create a unified apps ecosystem with a simple single-entry-point submission and approval process, but can also do it better than the existing alternatives.
"WAC has a hard task to convince the software world that its frameworks and APIs are as appealing and usable as those from open web majors like Google," Gabriel said in a research note, citing a recent Ovum study that found 65% of developers plan to use Google's server-side APIs, with only 25% interested in cellco equivalents.
However, that's mainly because cellco APIs - including OneAPI and all its purported advantages, such as enabling presence, billing and location functionalities in widgets - are still in the fledgling stage, and haven't been widely promoted outside the mobile sector, she adds.
"This will be as important a priority for WAC as releasing its first framework," Gabriel says.