Market Watch

Nokia and Orange Join App Store Efforts



World leading handset manufacturer Nokia and mobile operator Orange have formed a partnership that will give Nokia-using Orange UK and France customers easier access to mobile content from Nokia's Ovi mobile applications store.

Orange and Nokia are working on creating a single-sign in service that will allow Orange customers using Nokia devices that are  part of the Orange Signature range of handsets to access Ovi content without the need for extra registration or separate billing.

In addition, Orange will add selected apps from its own Orange Applications Shop to Ovi Store as it aims to provide its customers access to more local content.

Analysis
Partnering network operators to provide integrated operator billing is vital to Nokia's chances of success with its Ovi Store. Apple, the standout leader in the mobile applications store market, was able to tie its App Store customers into its existing iTunes ecosystem and billing platform. Other stores, including those from Google (with Android Market) and Research In Motion (BlackBerry App World), have struggled to develop a similar billing relationship with consumers - focusing on credit card billing, third-party solutions such as PayPal or their own services such as Google Checkout. Nokia's own research shows that operator billing is the most popular payment method for its consumers, with two thirds of users opting for it when available.

Despite a slow start Ovi Store's popularity is growing; the number of daily downloads has doubled to 2m since the beginning of the year. Developers will welcome deals with network operators that expand the audience for their content. However, Nokia does not yet have the right combination of attractive hardware and compelling content to take a lead in the Western mobile applications store market. Its focus on scale will see it compete in emerging markets, where feature phones and lower quality smartphones still dominate the high-end segment.

This is not the first deal between Nokia and Orange; in April 2009 the two companies partnered to offer Nokia email and messaging services on Nokia Orange Signature devices.

The agreement will enable Orange to promote its own applications and services via Nokia's store to its own Nokia-using customers. It has already developed its own applications for iPhone and BlackBerry.

Network operators have thus far lagged behind mobile handset manufacturers and platform providers in the mobile applications store market. Operators, though, have been keen to fight back; in 2010 a group of network operators (including France Telecom-Orange) representing more than 3bn subscribers formed the Wholesale Applications Community that aims to provide developers with a single point of access to operator application stores.

Orange has had a varied approach when it comes to mobile applications and content. Orange offers its own Orange Application Shop, available to its non-iPhone smartphone customers including Symbian and Android users. These efforts, though, have not been as aggressive as competitors such as Vodafone (in the UK) which has been keen to promote its own Vodafone 360 range of content and services.

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