Ovum: Let OS-makers run app stores

Operators should leave running of mobile app stores to platform makers, advise analysts, who identify Orange and China Mobile as players that will succeed.
Written by Victoria Ho, Contributor

Leave the running of mobile application stores to the OS-makers, Ovum advised in its latest statement.

Following a string of recent app store-related announcements, the analyst firm released a report commenting on the recent trend of mobile operators setting up online application marketplaces.

For most operators, running a mobile app store is a "bad idea", Ovum said.

"Deploying an application store is about creating a whole ecosystem to support, develop and provision applications both online and at the device level, including discovery." Except for a few operators, most do not have the vertical integration to achieve success in this aspect, said the report.

Ovum singled out China Mobile and Orange as the two operators that stand a chance. China Mobile aims to launch its app store this year, and Orange intends to extend its existing store to support more operating systems.

"China Mobile controls the value chain in its home market... [Orange] has a well-established mobile developer community and online portal strategy, of which the application store is a natural extension," explained Ovum.

Nonetheless, other operators "need to embrace" this trend in order to capitalize on benefits including "increased data traffic, revenues from premium applications and possibly a share of the revenues from ad-funded free applications", according to the report.

It recommended a combination of alternative methods, including partnerships or outsourcing.

For example, T-Mobile recently revamped its app store, but included search elements from Medio Systems and Yahoo.

T-Mobile also recently announced a partnership with device-maker, Nokia, to allow customers to download widgets from both T-Mobile and Nokia's marketplaces.

Outsourcing to third-party platforms is also another option, said Ovum.

On the OS-maker end, Microsoft recently announced plans for an upcoming Windows Mobile application marketplace. Google is doing the same for its Android OS, as is Research in Motion for its BlackBerrys. Palm plans to do the same for its Pre device.

However, a device-maker jumping on the bandwagon recently was Samsung. It announced earlier this month a store for apps based on Windows Mobile and Nokia's S60 platform, a move Mobile Crunch said could lead to the segmentation of an "already messy market".

In line with Ovum's advice on achieving vertical integration, the report recommended app stores achieve unity through alliances. "One store, one common interface, one thing to pitch to consumers as the place to go," it said.

One device achieving such integration is Apple's iPhone, also the first to set up a central marketplace providing access to apps from within the device.

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