Operators: I’m not that dumb but I can pretend

For a long time operators were in control. They controlled the distribution channel and billing mechanisms that developers needed to use to make money. This allowed operators to get away with implementing strict and inconsistent acceptance criteria for apps (think Symbian Signed and Java Verified) and waiting months to pay developers through operator billing channels. Not only that but operators often made developers feel like they are privileged to be allowed to engage with an operator.

The control, however, has shifted in favour of the developers. Operators now have very little control over developers who are now embracing the distribution channels and monetization options offered by Apple and Google. Now the developers are in control operators are losing revenue through distribution and premium SMS billing channels. Developers want operators to just be a dumb pipe and provide them with a reliable data connection.

One of the challenges for operators is how do they provide an attractive proposition to developers if it is within a fragmented “walled garden?” Operators have historically offered developers an opportunity within their own customer base and this provides not only a limited user base for developers but introduces complexity within an app. Developers need to provide an app that behaves differently depending on the customer. This is not something they need to think about in the Google and Apple worlds.

So, how can operators attract developer mindshare and monetize the opportunity presented by apps and services?

I predict that operators will move away from the “walled garden” approach and offer opportunities across any platform and operator. Operators will acquire in app payment providers that work across all operators but give their developers a “premium” service through their own network. By offering a simple operator billing option for app users to pay for items more money is likely to be spent and developers will see the value being added.
Operators will acquire social mobile app services that work within any operator but provide premium features on their own network. For example, Vodafone customers could invite and interact with other Vodafone customers in the same vain as the tight integration Facebook provides for apps now.

This will allow operators to capitalize on the revenues generated by app developers and offer developers a reason to know who the operator is and want to engage with them in other ways. Once you know an operator is increasing your bottom line you will want to explore other business options with them.

At MWC Vodafone were talking about the “Rich Communication Suite - Enhanced” technology that allows developers to share data across devices through a unified SDK. They explain that this will be available across different operators and devices however the Joynus web site is quite sparse on details of operators and supported devices right now. 
This appears to be the right direction, a cross platform, cross operator development kit allowing developers to do some pretty nifty stuff with their app (see the demos here). However, like many GSMA led initiatives before it, there is still a distinct lack of buy in from operators worldwide and this suggests that operators need to go it alone in order to attract developers.

So, operators, forget BONDI, WAC and LiMO, break free from operator led initiatives and forge your own path into the apps world. 
Acquire a payments solution with an existing developer base and engage with those developers to explain why you add value through operator billing.
Provide access to tighter integration between your customers to give phone users and app developers a reason to know that they are using your network. Make it social, whether through a partnership with Facebook, something like the RCS-e initiative or by acquiring a company like Papaya Mobile.

There is a future for operators working with developers and understanding what developers want and providing them an excellent service is the way to attract that valuable mindshare.

Monetizing your mobile app

Perhaps the biggest challenge for mobile developers is how to monetize the application that has been developed. With the average paid app needing approximately 25K downloads per day to reach the top 50 apps in the App Store or Android Marketplace it is clearly a tough place to compete. “Freemium” is a term that has been brought about by the practice of releasing an application for free, then making money through advertising or in app purchases.
There are lots of companies (around 100 in the table linked at the end of this article) offering monetization and promotion services for mobile applications, but fundamentally developers need to understand more about the market before making their choice about what services to use.

Platform Choices
Most developers may only be interested in the Apple App Store and and Android Market however it is worth considering supporting additional platforms that may increase their market share in the next 12 to 18 months or may offer better overall returns.

Already the Amazon App Store has seen significant growth on the back of the launch of the Kindle Fire. Consider also that this device has not yet been released outside the US market. Kindle Fire users are also locked into the Amazon App Store thus providing a significant install base for this content distribution platform. See the Distimo graph showing the growth trend below showing nearly 600% growth of downloads in the space of a few months at the end of 2011.

Distimo Amazon App Store

BlackBerry have been making some bold claims about how much developers can make on their platforms and this is backed up by a press release by Evans Data claiming that 13% of developers in the BlackBerry App World made over $100K. This is considerably higher than the Android Marketplace and Apple App Store.

Nokia’s Symbian may be on a downwards spiral but in the here and now they retain significant market share in not only emerging markets but also selected EU5 countries according to the comScore graph below showing Smartphone sales in 2011. It is difficult to predict how quickly those users will migrate to other platforms but Symbian may have more life left in it.

Nokia's Symbian market share

Samsung have recently been committing more to their bada platform, possibly on the back of the Google acquisition of Motorola Mobility and the threat they perceive, and in 2011 showed an impressive 39% increase in market share compared with 2010 according to Canalys statistics.

bada market share

Mobile advertising

There are more than 38 companies offering advertising services for developers and it is important developers understand what platforms are supported and how they will integrate with the service. The table at the end of this article provides some information about platform support but it is also worth understanding how the services can be integrated within your app and what sort of revenue you can expect to generate.

In app payments

The main channels for in app payments are tied to the app stores that provide them with both Google and Apple offering APIs for developers to allow customers to pay through their store account. If you are looking to target other platforms or are looking for operator billing options you may wish to consider the 21 other providers in the table at the end of this article.

App analytics

There are different measures and data that analytics services provide but developers need to understand what measures can be used to improve monetization. Some of the analytics services provide only application store statistics but in order to understand how your customers are using your application you need a service that allows you to see the paths your customers follow and where they are exiting the app.

Cross promotion services

These services allow you to either pay to have your application promoted from other apps or to be paid for allowing other apps to be promoted from within yours. You can make money simply from linking to other applications or by unlocking new features when your customers complete particular actions such as installing another app.

For developers the easy bit may be creating the application but finding ways to make money are much more important. Follow the link to find a list of mobile monetization providers with information on the service they provide and the platforms they support. I hope to be able to expand the information to contain some statistical data as well as more detailed integration information.

Monetization options for mobile developers

bada market share

Distimo Amazon App Store

comScore mobile market share 2011

comScore mobile market share 2011