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Carriers missing opportunity with app stores

June 14, 2010

Duane Edwards is senior vice president of product development at Globys

Duane Edwards is senior vice president of product development at Globys

By Duane Edwards

Wireless carriers are missing their opportunity to take a leading position in app stores by not leveraging their assets to provide developers the two most compelling advantages: monetization and marketing.

By turning their rich data into actionable context, a carrier can provide developers with a more powerful set of services than their competition.

There is much buzz in the market today around the proliferation of mobile applications and the continued disintermediation of carriers as consumers look towards Apple, Google and elsewhere to discover new applications.

Carriers see the strategic value in actively participating in the application ecosystem and many are launching their own app stores.

Per The Economist newspaper, 56 percent of carriers surveyed say app stores will be an important source of revenue for them in the next five years.

But carriers are faced with a classic chicken-and-egg dilemma.

Building appetite
On the one hand, they need consumers to be actively using the app stores to attract developers to their platforms.

On the other hand, to attract those consumers, they need an extensive variety of applications in place and an ongoing supply of new ones.

This is particularly challenging when there is a reluctance of many developers to dedicate time and effort, no matter how minimal, to port their successful iPhone and Android applications to carrier platforms due to a lack of confidence in the carriers to drive exposure and ensure revenue streams.

So what do the carriers need to do to compete? They must offer more than what Apple or Google is offering and provide a clear path to revenue for the developers.

The recent Apple ban on third-party analytics provides carriers with an opportunity to differentiate themselves with the developer community.

By leveraging their rich understanding of their subscribers, carriers can help developers gain insight into their customers and the usage of their applications.

Most importantly, by combining this wealth of data with contextual marketing, carriers can break down application discoverability barriers −an important fact given that experts in the mobile marketing space recommend that developers allocate two-thirds of their budget to marketing and the rest to the actual application development.

Carriers can also leverage their customer data and intelligent targeting capabilities to help developers increase revenues from in-application advertising and commerce.

How can this work out in real life?

Let us use Spanish Anywhere as an example – a mobile application that contains 5,000 words and 1,000 useful phrases to help you learn, translate and communicate in Spanish and English.

Leveraging subscriber and application usage data, a carrier can help AppAbove, the developer of Spanish Anywhere, understand where, when and by whom the application is being used. Is it being used by business people traveling to Latin America, or college students doing their homework at night?

With this insight, the application can be promoted in a contextual, relevant manner, rather than relying on a subscriber to search and find this application on her own.

This insight can also be used to better target advertising and commerce within the application.

You can imagine different marketers who are interested in driving shopping and transactions wanting interaction with the business traveler as opposed to the college student.

In addition, the developer can use this information to refine the application to provide a better experience for customers and, ultimately, increase the application’s revenue potential.

The wealth of data that lies within a carrier and the ability to turn that data into actionable insights to make contextually relevant recommendations is the key to differentiation from the Apples and the Googles – both from a developer perspective and a consumer perspective.

Carriers must seize this opportunity to attract the developer community because without them, their efforts to monetize subscribers will only get more challenging and their long-term positions will become increasingly threatened.

Duane Edwards is senior vice president of product development at Globys, Seattle. Reach him at

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