Market Watch

Mobile Operators Pursue App Store Plans

July 29, 2010

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The Wholesale Applications Community (WAC), the collaborative effort between network operators designed to offer a unified mobile applications platform, has formed a corporate entity, appointed a board and outlined its plans for the next 18 months.

WAC was first announced at Mobile World Congress 2010 with the stated aim of building a single applications platform for developers and opening the mobile applications market to as wide a group of developers and consumers as possible. WAC will not offer its own application store, instead it will promote the use of standard technologies enabling developers to distribute a single application to all platforms and provide a system for developers to monetise their apps.

WAC has formed a London-registered corporate entity and appointed a board comprised of representatives from leading network operators including: Orange-France Telecom, Vodafone, AT&T, China Mobile, NTT Docomo, Telefonica, Softbank Mobile, Deutsche Telekom, SK Telecom, Verizon and Telekom Austria. The operators signed up to WAC boast a combined subscriber base of more than 3bn customers.

In September 2010, WAC will formally merge with the Joint Innovation Lab (JIL); the developer initiative led by Vodafone Group and associated companies (Verizon, China Mobile and Softbank Mobile).

WAC plans to release an SDK (software development kit) to app developers in the latter half of 2010. The first WAC apps are expected to launch by February 2011, with a full commercial roll-out in mid-2011.

WAC will rely on operator partners to continue to distribute apps using their own stores and agree revenue shares with developers. WAC will take a share of developers' revenues to cover its operational costs but is not designed as a profit making company.

Currently focused on network operators, WAC has said it is open to collaboration with non-operator application stores, including those run by device manufacturers or platform providers such as Apple, Research In Motion and Google.

Developers would welcome any initiative that enables them to reach a wide audience as simply as possible. Questions remain as to whether WAC will be able to achieve this. Merging with JIL will give it access to an established network of developers. Though in comparison with other platforms, JIL has struggled to gain significant traction among developers. It currently supports 8,000 applications and 9,000 developers. Apple's App Store features more than 200,000 applications and Google's Android Market has over 70,000.

To succeed, WAC needs scale. And it needs to scale quickly. Screen Digest remains skeptical as to whether such a large group of network operators, each with its own aims, will be able to get a compelling service to market quickly enough to attract developers.

Currently focused on apps based on web protocols, the applications offered by WAC are unlikely to be able to compete with many of the high quality apps that have proved popular on the latest Apple, Android and RIM smartphones. As with any service that starts out aiming for scale, WAC will face significant difficulty in providing high quality content to all devices. A potential danger is that it will end up aiming for the lowest common denominator, rendering it irrelevant in the face of high quality competition.

Operators are understandably keen to try and wrest back some of the control they have relinquished to hardware and software players in the mobile content market. But the structure of WAC is likely to prove cumbersome in comparison with the agility shown by Apple and Google, organisations that have the ability to move quickly to innovate and grow the applications market.

A key indication of the limitations of WAC is that it plans to launch without support for some of the most vital features of applications on other platforms such as mobile advertising, in app purchases and location based services.

WAC's main strength will be its ability to serve universal widget information type applications to lower-end feature phones that are not currently served with quality native applications and lack browsers capable of supporting advanced web-apps. However this will only be a short term advantage as smartphones gain greater mainstream popularity.

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