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Building a mobile app ecosystem to drive mobile usage

Pick n' mix mobile apps

More and more organisations are announcing mobile app stores. Operators have been announcing their plans throughout this past year – the most recent announcement of an upcoming Vodafone store for mobile content and applications joins previous announcements from operators such as Orange and O2. In addition, organisations as diverse as Qualcomm, Sun and Carphone Warehouse have recently announced plans for their own app stores. This activity shouldn’t come as a surprise; the more mobile applications that are in the hands of end users, the greater the opportunity to drive up mobile data usage and generate new revenues. The challenge is to find the best possible way to offer compelling service propositions to the broadest set of end users while also creating a vibrant ecosystem for application developers.

Mobile application building blocks

There are a number of key building blocks necessary for enabling a robust mobile application ecosystem. Many of these are now in place, and the stage is set for mobile applications to become a primary engine for driving up new mobile data usage.

Advances are being made with every new generation of mobile device. Mobile devices are now equipped with increasingly powerful processors and more memory, and they are capable of supporting a more diverse set of applications as well as more sophisticated applications and services. Advanced cellular networks have increased the available bandwidth for mobile data and are becoming ubiquitous. Improved pricing for data access has made increased mobile data usage possible and post-sales mobile application distribution attractive.

End users are demanding a more personalised, PC/internet-like mobile experience – one that includes flexible access to a diverse selection of applications and services that are updated regularly as tastes and market demands change. This end-user demand is creating the need for more flexible mobile application deployment models. Over-the-air application distribution, where applications are downloaded onto the device and managed remotely over the operator’s cellular network, is a key capability for enabling mobile application stores.

App stores

The most well-known commercial application ecosystems or app stores have been created by mobile device and platform manufacturers, including Apple, Nokia, Google (Android), Microsoft, Palm and RIM. The success of Apple’s App Store, which served up more than 35,000 different applications and registered more than a billion downloads in just the first 9 months after launch, serves to illustrate how the combination of advanced devices, increased bandwidth, a well-leveraged and vibrant developer community and a well-managed application distribution model can quickly drive up mobile application uptake and with it, mobile data usage and revenues.

Operator app store advantages and challenges

It is no wonder that mobile operators and service providers are looking for options that will enable them enter the app store space directly. Mobile operators have a number of important strengths that can help them build a robust and vibrant application ecosystem. One is that the mobile operator maintains the primary relationship with an end user for wireless services. This means that an operator can market and promote an application store as a new service directly to their often quite substantial customer base.

Another advantage that mobile operators have is a range of critical systems already in place – from billing and payment platforms to customer support systems, as well as user information and usage data. These capabilities are critical elements to a successful mobile application store and can help an operator deliver a great user experience. The success of Apple’s App Store is due in large part to the seamless, easy-to-discover purchase, download and upgrade processes. Operators must provide a similarly seamless, painless, hassle-free end-user experience at every step.

Mobile operators must overcome some challenges in order to succeed with this model. To reach the biggest addressable market, an operator-led mobile application ecosystem must work across all of the key devices in the operator’s portfolio, must function across multiple application environments and device operating systems, and must support millions of devices and thousands of device types/models.

In addition, to ensure a vibrant ecosystem, operators must attract a network of developers to write applications for their store. It is important to ensure that barriers are not created for the application developer as the ecosystem grows – this includes everything from ensuring that application certification is kept simple, to reducing the cost of porting applications within an operator’s device portfolio. Transparent revenue-sharing models that provide incentives to the application developers are also key to making an application ecosystem work.

Vendors such as Microsoft and Apple have had a built-in advantage with their extensive networks of experienced application developers who are familiar with their development environments. To get early buy-in, Apple proactively targeted members of their development network with their SDK, and solicited early submissions. Operators may have more of a challenge in this regard.

One strategy operators can employ to attract application developers is to provide access to a broader audience than vendor-led application stores can. For example, Vodafone plans to make their application store available across all of their worldwide markets – about 290 million subscribers currently.  Vodafone also intends to align with partners such as China Mobile, Softbank and Verizon to further scale the opportunity. The plan is to provide a single developer program, complete with SDKs and APIs that work across all of the devices in all of these operators’ markets. If these operators can execute successfully on this strategy, it would represent a very large and very attractive addressable market for an application developer. Vodafone and its partners alone can provide access to more than 700 million subscribers around the world. For all of its success, the target market for iPhone applications is the 30 million iPhones that have been sold worldwide.

Managing the store

One key to meeting these challenges will be the operator’s advanced mobile device management (MDM) solution. An MDM solution enables operators to support the distribution of mobile applications. In addition, an MDM platform can be used to resolve any application setup or configuration issues that come up during the distribution process, hiding any complexity in the process and ensuring that it is seamless to the user. Finally, if the user has any issues with a mobile application at a later point, the MDM solution enables the customer care and support staff to help the subscriber over the air and in real time, ensuring a consistently excellent user experience throughout.

A huge opportunity

Mobile applications offer a huge opportunity for mobile operators to drive up data usage and revenues. The challenge for the operator is to create an application ecosystem that offers incentives for developers while keeping the delivery process simple and providing the broadest possible reach across heterogeneous device portfolios. At the same time, these stores must be fun to use and must provide a compelling end-user experience that hides any underlying technology complexity. In many respects, the enabling technologies operators need are available today; the challenge is in coordinating all of the technology pieces, and more importantly, the participants, into a vibrant and exciting new mobile application store-ecosystem.

Rob Dalgety is commercial director at mobile device management firm Mformation


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