Mobile Sands

May 27, 2009

Nokia’s Ovi Store – A Very Strange Launch

Filed under: App Store, Ovi — Tags: , — AJ @ 3:51 am

Nokia launched its Ovi store on May 26th 2009, but it do so in a very strange way.  

Despite setting expectations three weeks ago that the Ovi store would have over 20,000 ” items” (i.e applications + multimedia content), Nokia launched the store with little over 1,000 “items”.  Where did the other 19,000 “items” disappear?  Further, rather than launching the store with an enthusiastic endorsement from a major non-US operator, an area where Nokia has consistently claimed strength, Nokia decided to do a press release with AT&T; a press release in which AT&T Mobility”s CMO says that the carrier will offer the Ovi store to consumers in late 2009 because, “AT&T has a reputation for providing the most customer choice.”  

I browsed through store.ovi.com to see what is available there.  Once I selected my phone as “Any Phone”, 1365 items showed up.  Of these items, only 619 (45%) are applications, while the rest are MP3, videos, ringtones and wallpapers.  And as many other bloggers have pointed out all day, applications like facebook are missing. In fact, it is very likely that Palm Pre will have more marquee applications than the Ovi store will when it is launched on June 6th.  And Pre will definitely not be missing out on facebook.  Maybe someday we will know why Nokia felt compelled to rush out with this launch.

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February 21, 2009

Android Market’s Return Policy Will Discourage Developers

Filed under: Android, App Store, iPhone, New business models, Ovi, Smartphones — AJ @ 5:03 am

Looks like Android team did not see PinchMedia’s presentation on “iPhone AppStore Secrets” before publishing Android Market Business and Program Policies that allow buyers to return an app within 24 hours of purchase! 

PinchMedia is a New York based company that provides app developers with an analytics library to monitor usage. 30 million of the over 500 million downloads from Apple’s store had their analytics software. The numbers collected by PinchMedia show that less than 30% of people who paid for an app used it after 24 hours.  This is not surprising considering that the average number of apps downloaded per iPhone exceeds 30. Those who did not use an app 24 hours after buying it effectively got suckered, but considering that most apps are priced around $0.99, looks like many consumers don’t mind doing a paid trial.  And if you are a developer burning the midnight oil, paid trials rock.

No one gets paid trials in the Android Market (are paid trials evil?).  So once buyers realize that the new fart app (or the advanced tip calculator app) is’nt any more useful than the one they already have, they return it.  This no questions asked return policy will definitely increase the number of paid applications trialed, but is it good for developers?

I don’t think so. The folks at Google could argue that “no-questions asked” returns leads to happier customers.  But will these happier customers pay more for apps on the Android Market than they do on Apple or Nokia’s stores? Unlikely. With a few exceptions, two apps that do approximately the same thing will be priced at approximately the same price in different app markets.

If the average retun rate on Android turns ends up being 75%,  a developer will need four times as many downloads on the Android Market than it  gets on the Apple’s store to make the same amount of money.  That may happen someday, but for now, developers are better off creating paid applications for Apple and Nokia’s Ovi (Symbian) stores.  And I hope the folks at RIM do not follow Android’s path while creating the Blackberry Store.

February 17, 2009

Dividing the Mobile Apps Pie – Nokia, Apple, Google, RIM and others

Filed under: App Store, eBooks, Mobile Apps, New business models, Ovi, Smartphones — Tags: , , — AJ @ 3:45 am

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.

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!

February 13, 2009

An Amazon App Store?

At MWC next week, Nokia, Samsung and Microsoft are expected to either showcase their mobile application marketplaces (“app stores”) or at least share detailed plans regarding them. Google has announced that its Android marketplace will start supporting paid apps next week. Blackberry  and Palm have already joined the race to build app stores. The one company that has every right to be in race, but has been conspicuously quiet is Amazon.

An “App Store” is a store

Handset vendors rushing to emulate Apple’s success may be forgetting that Apple was one of the world’s leading online retailers of digital content – long before it launched iPhone or its App Store.  Apple, in fact, launched iTunes “jukebox” in Jan 2001, 10-months before the first iPod hit the market.

Apple’s experience in selling music and video online is evident in the way it organizes mobile apps in the iTunes store, from creating top-10/top-50 lists in a wide range of categories to highlighting notable new apps and providing automated and staff recommendations.  Consumers have shopped with iTunes for years. How many handset companies have this kind of expertise?

So, why not partner with Amazon?

In coming years, for a handset to succeed, it will need a rich set of applications. People will not only buy a handset for how it looks or what it costs, but for what it does. Applications will be source of stickiness for both handset vendors and operators. Operators and handset vendors who will not have access to a large ecosystem of application developers will lose subscribers, market share and profits. See my previous post comparing Verizon and AT&T’s performance in Q4’2008.

Not only is Amazon trusted by millions of consumers and has the technology to sell in a compelling manner, but it also has demonstrated that it can succeed in selling digital content. It started a digital music store in Sept 2007 that, in 14 months, became the #2 digital music store. Still far behind Apple, but way ahead of Microsoft. With Kindle, it has shown that it can not only sell lots of DRM-free MP3, and but also work with a large number of publishers and create a profitable, new market.  Can Nokia claim such success with N-Gage?

I am all for the creation of mobile application marketplaces and wish that the new entrants succeed. I just have a nagging feeling that these attempts will look similar to the attempts of dozens of bricks-and-mortar retailers to enter the online retail business in mid-1990s.

Place in the sun for Third-party App Stores

Thankfully, all handset-platform vendors other than Apple are allowing third-parties to create marketplaces. This has allowed companies like Handango and PocketGear to be built, and is allowing Samsung to launch an app store. This keeps the doors open for Amazon to build an app superstore in the future, or for other customer-focused niche marketplaces (think Zappos) to appear.

 

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