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Mobile Operators killing non-Apple App Markets?

Picture of William Volk
Mobile Operators killing non-Apple App Markets?
by William Volk - Friday, 3 April 2009, 9:52 PM
Short post:

In the case of the Android App Market, paid app sales are a fraction of what one would expect. The top paid apps have sold only a few 1000 copies, free apps have reached download numbers of over 250,000.

Why? Most users have not opted-in to Google Checkout, which is the billing system used.

Apple, of course, requires users to opt into iTunes, but iTunes already has widespread acceptance. 93% of iPhone users have purchased an app.

My understanding is that Google approached T-Mobile about this and the idea of adding carrier billing as an option was rejected.

So let me get this straight:

1. Apple cleverly cuts operators out of the app revenue stream.

2. Competing 'open' platform, Android appears.

3. Operators reject Google's offer to use their billing systems for app purchases.

4. Operators see no revenue from app sales on iTunes AND Android App Marketplace.

5. Android is a non-starter for app developers in business terms.

The question is, will users opt in for PayPal when the RIM App World turns on?
Re: Mobile Operators killing non-Apple App Markets?
by Sami Makelainen - Saturday, 4 April 2009, 7:26 PM
I think the number of users signing up for any "alternative" payment method purely to gain access to an app store is likely to be modest at best. A lot depends on existing user base; like you mentioned, iTunes had a relatively massive user base to begin with, which aided take-up of Apple's store.

Google Checkout never really took off and doesn't have that many users. Not good for Android store, as we've seen.

PayPal, on the other hand, has lots of users. So in that sense, I predict them to do better than Android app store (at least relatively).

Picture of JT Klepp
Re: Mobile Operators killing non-Apple App Markets?
by JT Klepp - Monday, 6 April 2009, 12:05 AM

this is spot on. You cannot ignore the payment option when talking about mobile content. The AppStore works because so many people already put in their details to buy music.

I do think PayPal may be the only viable option. Operator billing is not due to insane revenue shares kept by operators just to do the billing.
Picture of William Volk
Re: Mobile Operators killing non-Apple App Markets?
by William Volk - Monday, 6 April 2009, 4:57 AM
One has to wonder at the decision making process at these mobile operators, who would rather see NOTHING than 30% of SOMETHING.

Picture of Graham Hill
Re: Mobile Operators killing non-Apple App Markets?
by Graham Hill - Monday, 6 April 2009, 7:52 AM

Simple human psychology suggests that the operators may well prefer to have nothing and deny other revenues, rather only 30% of the revenues.


Graham Hill
Customer-driven Innovator
Picture of Vladimir Dimitroff
Ultimatum behaviours
by Vladimir Dimitroff - Monday, 6 April 2009, 2:24 PM

We like to personalise Operators, think of them as individuals and ascribe psychological attributes and traits to them :)

This Appstore behaviour, in fact is good evidence that collective decision-making (by corporate executive bodies) is none the more rational than the average of the individuals in it. And those are, well... slightly less than rational, as the psychological game studies reveal.

Their 'rationale' reminds me of a small ethnic group back in my country, known as 'strangely stubborn' and subject of many jokes. In one joke one of them goes to his wife with a few nails and a hammer, and says:

"Please knock a couple of nails in my head!"

"Why do you want this???"

"I'm going for a haircut - but don't like Joe the barber, and want him to break his scissors!"

- - - - -

In a board where most members reason like this, what mobile Appstore strategy do you expect?

Picture of William Volk
Re: Ultimatum behaviours
by William Volk - Monday, 6 April 2009, 7:57 PM
Nokia needs to 'solve' this for OVI to succeed.

Personally, I'd rather give up 50% of my revenue for the volume that would be achieved by billing to customer's phone bills.