Mobile application stores have generated considerable interest and discussion inthe recent past. Particularly, the success of Apple’s application store for the iPhonehas established online storefronts as an important distribution channel for mobilecontent and applications. This has led device players, Operating System (OS)vendors, and many mobile operators to launch their own application stores. Weexpect the mobile application market to be worth almost US$ 9 billion globally by2013
. For operators, application stores can be an important lever to grow datarevenues—our estimates indicate that operators can improve their non-SMS datarevenues by 10 to 11% over a five year period, by leveraging direct revenuestreams through application downloads, mobile traffic as well as indirect revenuessuch as advertising and provision of billing services. However, telcos will need tocompete with device and OS vendor stores to attract consumers and developers totheir storefronts, which could prove to be a daunting task. Operators will alsoneed to develop sustainable revenue streams from application stores, in light of falling ASPs
and proliferation of free applications. We recommend global playerswith a large captive customer base to build end-to-end capabilities, while smallerregional telcos should undertake only select activities in-house, relying extensivelyon third-parties for the technology platform. Operators should launchplatform-agnostic application stores, and support non-device specific platforms inorder to target a wider subscriber base, and expand the market for mobileapplications. In order to maximize revenue potential from storefronts, operatorsshould also experiment with innovative pricing models that are linked to theusage, popularity and stickiness of the application. Moreover, operators can grownew revenue streams through the provision of white-label services such as billingsupport, customer management and payments to other storefronts.
Mobile Application Stores –Assessing Opportunities for Telecom Operators
Telecom, Media & Entertainmentthe way we see it
1 Capgemini TME Strategy Lab Analysis.2 Average Selling Price.