Another one bites the dust
T-Mobile USA recently announced that they will shut down their mobile developer programme. Developers are now asked to use existing platform app stores; in particular Android Market, BlackBerry App Store and Microsoft’s Windows Marketplace for Mobile. One convenient conclusion from this could be that T-Mobile has thrown in the towel in the fight against the established apps stores.
What I think we are witnessing here is not really giving up, it’s the brave move by an operator to admit that they are not the ones best suited to run a developer ecosystem. Just because Apple succeeded in creating huge momentum with their App Store, it’s not that easy to copy the recipe and hope for success. We witnessed the same chain of events with mobile music stores a few years ago after iTunes Music Store had proven the way to online music sales. Too many decided to set out on the same journey without properly answering “why” and “how”. Most failed to create sweet music on their income statements.
In contrast, when launching Android Market, Google seems to have done their positioning homework. Apple upset some developers – the suppliers – with a proprietary, closed operating system and a strict application approval process. Android offers open source and virtually anything to be published on Android Market (though here we have some other concerns, soon to be published on the blog). Google also saw that there was demand among consumers for devices that had great user experience but weren’t necessarily an Apple product. Realizing the unbalanced supply and demand opportunity, Google could successfully move into the market.
Nokia’s Ovi needs to be mentioned as well. Ovi’s lack of real success is likely due to bad experiences both from a consumer and a developer perspective. It simply was, and perhaps still is, too cumbersome for people to download and buy applications. If consumers (demand) are not impressed you will soon run into trouble attracting the developers (supply) due to lack of market, thus making it very hard to get momentum.
The question now remains how the rest of the app stores should position themselves for survival. Will operating system specific app stores stay as the dominant players? Do initiatives such as the Wholesale Application Community stand a chance? Regardless, a developer programme or app store must carefully serve both the supply and demand side. Suppliers, the developers, need enough and constantly updated features to keep them happy and productive while differentiating the programme from others. Demand is created by consumers who want easily accessible, high quality applications with a consistent user experience. If you cannot keep a good supply/demand balance, your developer programme risks failing.
T-Mobile should be credited for pulling the plug on a venture that would likely not receive the attention needed, internally or externally, to stay competitive and profitable. To compete with the industry leaders you need not only be very quick and innovative in the applications field, something that mobile operators are not geared up to. You also need to have great reach and scale, something a mobile operator typically does not have with its shared national or regional footprint.
The way we see it, operators shall first and foremost do what they do best: coverage, quality and operational excellence (see our December 2009 blog post Prediction #3 – Shoemaker stick to your last). This is the uncompromisable base for a healthy business in the longer run. There are several value adding roles for operators, but being an app store is probably not one of them.