Carrier Evolution

When, and whether, carrier app stores or device and application app stores will win the allegiance of consumers has been a highly-debated question over the last several years. Put simply, the issue is whether mobile service provider app stores can compete with iTunes or Google Play.

Carriers such as AT&T and Verizon may very well get into the app store space to compete with Apple and third-party app stores like Getjar,
argues Infonetics Research analyst Shira Levine.

The carriers’ differentiation would be the ability to offer Android and browser-based applications in a one-stop-shopping environment. “AT&T learned a valuable lesson with the iPhone,” says Levine. “They’re not part of the revenue value chain.”

As a result, she says, “[carriers] are envisioning OS-independent app stores, which consumers could access no matter what device you had and even do so across multiple devices.”

That’s part of the thinking behind the Wholesale Applications Community. Of course, you might ask yourself what you’ve actually heard about WAC, recently. As you might suspect, any consortium of some 60 global mobile operators would be a bit unwieldy, and might take some time to get traction.

But you might also ask whether any such consortium, even as large as WAC is, really can compete with iTunes or Google Play, not to mention GetJar. Analysts at Informa Telecoms & Media do not seem to believe carrier app stores will gain any market share over the likes of Apple’s App Store and Google Play, over the near term.

Mobile service provider content and commerce revenue is going to drop between now and 2016, according to Informa Telecoms & Media, with service provider share of mobile content and commerce revenue drop from 44 percent in 2011 to 31 percent in 2016 globally.

That represents a growing share of market that will be taken by over the top providers of mobile music, mobile games, mobile TV or mobile video, mobile messaging, location-based services and chat and social-networking over the next five years, as these services go increasingly “over the top.”

The slice of app revenues going to operators will grow from 10 percent in 2011 to 17 percent in 2016, “not because operators will increasingly act as a direct retail channel for apps, but because they will increasingly act as enablers of paid-app downloads on third-party stores,” says Escofet.