Operator application stores - opportunity is marketing, not inventory

In the rush to application stores it seems that everyone is busy trying to replicate the success of Apple's App Store. Few people have looked at the challenge of "how could you make Apple's App Store more successful?" Yet that could be just where the biggest opportunity lies.

In a world where there are 50,000 apps - and a world that can generate revenue from the most niche of applications (an Inflation Calculator is revenue earning) the challenge for consumers is - how do they find the application that they want?

There are two opportunities here - both maximising the return on the hit applications, and also maximising the revenue from the long tail of niche applications.

Operators have an interesting opportunity here - as developers are presented with a challenge of how do they market their applications, operators can offer valuable services enabling developers to reach consumers on their networks.

Instead of trying to "capture value" by creating their own application stores and driving traffic to those stores, how about operators took a strategy of not creating their own store, but offering marketing services to developers who's applications are in platform or OEM stores?

The challenge for an operator is to build an "application marketing" platform that allows

• Targetting of applications to consumers by device type
• Profiling of consumers behaviour based on history and demographics
• A scalable bid system (similar to AdWords) for mobile application marketing

This platform then integrates with OEM and Platform application stores, and enables developers to bid (and pay) for links into those stores.

The business model? A simple mechanism of generating revenue as an affiliate - yet one that can drive massive amounts of mobile consumer traffic to different applications. How the application developer chooses to monetize that (whether via operator billing, advertising or any other method) is up to them.

The best part of this - is the costly business of building and maintaining platforms, and developer support is left to those best suited to that - the platform builders and OEMs - leaving operators free to focus on providing valuable services and applications to their customers - consumer marketing is one area where operators continue to reign supreme.

If my readers know of any far sighted mobile operators who are exploring this strategy let me know - I'd love to talk directly to them. (You can find me on twitter @millarm or via email: matt [at] emillar.com)

Comments

[Mark Doherty]

O2 are doing this with Litmus to some degree, although they are attempting to build an AppStore to go along with it. James Parton runs that initiative, and he's got Elayne Checketts (from MI) work with him.

Sounds like a good plan for adding services, but in Europe?

Mark

[Matt]

Litmus is indeed interesting, and close - but still seems to miss the mark a little - and it's surprising that it doesn't (at least when I last looked) encompass iPhone App Store - which as O2 have the exclusive would be an obvious route forward.

[James Parton]

Matt - I'll drop you a line via Twitter so we can hook up and have a chat. We have some exciting developments coming up at Litmus which you may like...J