Nokia baits developers with better support, revenue share

Finnish phonemaker touts operator-billing support and better app discovery in Ovi Store in efforts to keep Asia-Pacific developers excited about creating for its platform, reveal company execs.

SINGAPORE--Nokia is aiming to attract more developers from the Southeast Asia-Pacific region into its fold by touting an app store that will help this community generate more revenue through operator-billing integrations and better app discovery tools.

According to Niklas Savander, executive vice president and general manager of markets at Nokia, the Finnish handset maker has inked partnership agreement with 91 telcos in 27 markets to introduce operator billing mechanisms in the Ovi Store of these markets.

Within the region, all mobile carriers based in Singapore, Australia and Thailand have integrated their billing systems with the Nokia app store to provide a more seamless end-user experience, Savander revealed during the company's briefing here Tuesday.

Explaining the significance of such a billing service, he noted that not every customer is comfortable using their credit card to pay for apps, which is the system Apple's iTunes and Google's Android Market currently utilize.

The Nokia executive cited Germany as a market that eschews divulging credit card details to third-party retailers but where consumers' confidence and familiarity with their carriers' billing systems are high. This, in turn, will make them more comfortable buying apps through their mobile operator, he said.

Furthermore, credit card usage is not high among the emerging markets, particularly for rural communities. To work around this challenge, Savander explained that users can still access apps by paying for the apps through prepaid or postpaid accounts with local operators.

Comparing Nokia's provisioning of an alternative payment system to credit card billing, he pointed out that rivals Apple, Google and Research In Motion (RIM) have yet to integrate operator billing services into their app stores. Google and RIM, though, are currently working to offer such arrangements, he said.

Kenny Mathers, head of developer relations at Forum Nokia Asia-Pacific, who was also present at the briefing, noted that two out of every three consumers will choose to pay for their downloaded apps via their operator rather than through their credit card. "The convenience that consumers experience through an operator billing-integrated app store will result in 13 times more the volume of sales than credit card-based app stores," he said.

Nokia has also been proactive in increasing the revenue margin for developers, Mathers highlighted. He cited the example of Singapore where, in a carrier-run app store, the mobile operator takes 50 percent of the total earnings each time an app is purchased and billed through the telco. While developers take the remaining 50 percent, their cut has to account for bad debt and local sales tax, resulting in lower revenue margins overall, he said.

Nokia, however, has "simplified" its revenue-sharing system to assist developers that might not have the experience of dealing with such billing complexities. This system, which the Finnish handset maker describes as "flat-rate revenue share", ensures developers take home at least 60 percent of the gross price of an app after even local sales tax has been deducted.

Mathers said: "With this program, developers stand to benefit from [receiving] over 50 percent more revenue share [compared to a carrier-run app store]."

Going 'ultra-local' to drive apps
Besides touting potentially higher revenue streams, Nokia has also been enhancing its "ultra-local" strategy to create additional value for developers. This strategy leverages the company's global marketing reach to bring local apps to an international audience as well as increase the visibility of local apps according to the user's location, said Chris Carr, Nokia Southeast Asia-Pacific's vice president of sales.

He explained that Nokia has implemented location-based features into its Ovi Store to help mobile users discover locally relevant apps much easier.

Mathers added that this is done through the company's TopApps tool which will push local apps to users based on the country they are in. Ovi Store, which is preinstalled in Nokia devices, will also showcase a "local apps" tab to improve the app discovery process, he said.

Newly-appointed CEO Stephen Elop last week revealed that Nokia will streamline the development process of its mobile platforms by making its Qt software development kit (SDK) the default coding tool for internal and third-party developers.

Savander said there will be migration tools, online and hands-on training and improved SDKs to aid developers in the transition from Symbian-based tools to Qt.

Additionally, since Qt is "a lot more modern and similar to the coding language of iOS and Android" compared with the "cumbersome" native Symbian tools, he noted that the transition is likely to be smoother. Generally speaking, developing on Qt will require 70 percent less lines of code than native Symbian tools, he said.

Developers will also stand to benefit from the shift to Qt as they are coding not only for the current Symbian operating system (OS) but will also be able to port these apps onto the MeeGo platform once it is launched in 2011, Savander added.

Elaborating on the company's strategy for the Intel-partnered MeeGo OS, he said Nokia intends to use the OS in "very high-end smartphones" in which the device's primary concern is "functionality and innovation".

The Symbian platform, on the other hand, will straddle the middle-ground between high-end smartphones and the low-end S40 device range.

Savander acknowledged that the repeated delays in launching MeeGo has given its rivals "oxygen to breathe" in the competitive smartphone arena. However, Nokia believes it is imperative that it refrains from "talking too early" about a product, as highlighted by CEO Elop last week.

"We'll not bring out MeeGo, or any other product, until it is great. Not good, but great," he said.

The Finnish company last week also announced plans to slash 1,800 jobs as part of efforts to simplify and integrate operations involving product creation on its Symbian mobile platform, services and certain corporate functions. Asia-Pacific will not be much impacted by these job cuts, though, the company told ZDNet Asia.