The App Store’s dark side

Mobile World Congress keynote speaker Hugh Bradlow warns of the widening divide between apps and appliances.
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You only have to peek at Juniper Research’s Windsor Holden’s video blog from the Mobile World Congress in Barcelona to get the message: It's an apps, apps, apps, apps world.

In addition to the App Planet Hall, apps were “the order of the week” as discussion topics, product launches and business strategies. New handsets seemed to revolve around the app downloading market, and BBC Mobile promised a set of apps for the iPhone for streaming live BBC content over 3G and WiFi — to be followed up by apps for Blackberry, S60 and Android. App fever reached a peak with the Wholesale Applications Community announcement — 24 operators who join the four members of the JIL initiative (Vodafone, China Mobile, Softbank and Verizon) to launch an open, international applications platform.

But not so fast, says Telstra CTO Hugh Bradlow, who sees a dark side in the tendency of mobile operating systems to proliferate rather than consolidate, creating a fast-multiplying challenge for developers. His principle: Maybe apps aren’t always the answer, and the appliance model built-in works better for some things, for example, making phone calls or watching live TV. It sure makes sense for handset manufacturers who don't have to depend on third-party developers for competitive features.

Bradlow predicts that customer demand will drive his company to support numerous app stores and handset operating systems despite industry initiatives to cut fragmentation. “For example, Apple and Samsung’s bada won’t go away, and we’ll have to work with them,” Bradlow said. “We don’t see the growing number of available app stores or mobile OSes as fragmentation but as competition. I believe there will still be at least six to 10 mobile OS offerings on the market in the coming years."

The problem with supporting multiple OSes hits applications developers hardest by forcing them into testing their software on up to 1000 different handsets to ensure compatibility. “Developers are still struggling with the handset environment,” he said.

Bradlow advises Telstra’s approach: a “shopping center” where subscribers browse through a selection of storefronts and select apps, which are supported on their handset. This move chimes with the recent agreement of at least 24 operators around the world to launch an open international applications platform, the largest unified move by operators into the mobile apps space. Telstra hasn’t signed up yet.

GSMA’s CMO, Michael O’Hara, seems to concur that there has to be something better than creating iPhone-like proprietary app store islands. “We must establish a common applications framework to eliminate these islands. The present 70/30 revenue split between the app developer and Apple is compelling for both sides, but not the operator,” O’Hara said. His answer: a revenue share model that supports the whole ecosystem and making apps portable across smartphones from a breadth of vendors. “We should reflect back on the success of GSM, which was driven by the adoption of an open and international approach,” he said.