Dividing the Pie – Ovi Style
Nokia launched it Ovi mobile application store today. I read the developer agreement posted on Nokia Ovi’s website. Like Apple:
- Nokia is offering developers 70% of the selling price, less applicable taxes.
- Nokia has the right to review all applications and decide which applications get published
- Nokia will not distribute applications that compete with Ovi (so don’t expect an Amazon Kindle store here!)
Nokia allows “Operator Biling”
However, unlike Apple, Nokia plans to offer operator billing. This is a huge differentiator for Nokia and clearly one of the things they are uniquely qualified to do. With this option, customers who do not have credit cards or who have do not want to be bothered with entering their credit card information, can still buy applications. This can significantly increase the market size of apps, particularly in the developing world, and on low/mid-end phones.
However, from a developer’s standpoint – there is one catch in operator billing. With this option, a developer does not get 70% of the selling price, but 70% of what the operator gives Nokia. It allows operators to potentially get a very large cut of the mobile app revenue by mandating operator billing as the only acceptable payment method.
Nokia and Apple vs. RIM and Google
In comparison to Nokia (and Apple), Android and Blackberry offer more attractive terms – to both operators and developers.
- RIM said that it will offer developers 80%. In addition, it has said that it is open to sharing the other 20% with operators. RIM however has not committed to sharing the other 20% with operators.
- Google has said that it will offer developers 70%, and will give operators the other 30% less any payment processing costs.
Palm, Samsung, PocketGear and Handango
The cut taken by Apple, Nokia, RIM and Google pales when compared to the 50% that Palm is asking. Palm uses PocketGear (previously part of Motricity) to run its app stores. Since Samsung is using PocketGear as well, I expect them to offer the same deal.
Of course, the revenue share offered by all the phone vendors is better than the 70% that Handango charges developers who have sales over a million dollars!
Microsoft’s Plan?
Microsoft has not disclosed how the pie will be shared on Windoes Mobile Marketplace. Going by Microsoft’s record, I would expect their revenue share plan to resember Nokia’s or Apple’s rather than Google’s.
And of course, we will just have to wait and see what Vodafone and China Mobile have up their sleeves!
Mobile Sands 