Friday, 26 March 2010

Mobile Phone App Stores - Handset Manufacturers vs Cellular Operators

The following post is my own opinion, not necessarily the opinion of my colleagues or anyone else at Tesco. I should also point out that I am project lead for R&D (Research and Development) at Tesco.com, not all of Tesco as some of the media have stated!

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Now maybe it's just me. Maybe I don't "get it". Maybe someone could enlighten me?.. but..

What is the point of a mobile phone 'app store' run by a cellular operator?

As we build up momentum with our mobile strategy, you can imagine that our primary focus is ensuring that our web site will work on the majority of mobile phones. I know that's stating the obvious and I hope to goodness that if you're a web site owner you have a similar strategy in place.

On the other hand, there are a few web site services at Tesco.com that deserve the 'special experience' that a fully-formed application can bring - Grocery and Tesco Clubcard being prime examples. The decision to write a fully-formed app rather than adapt the web is based around how important it is to create a best-of-breed experience on mobile phones that takes account of the challenges of being mobile. For example, the grocery application will be useful because it will allow customers to build up a basket without needing a constant internet connection (say, on a train journey with those annoying signal-free tunnels).

If we write an app rather than adapt the web, then we need to code for particular makes and models of phone, because each handset can have a different operating system, screen size and shape, and amount of processing power. Yes there are 'app adapters' where you write an application once and it can be compiled to work on several handsets, but if we are going to make the 'app' effort then we may as well do it properly and write well-targetted code.

So, we need to work with the manufacturer of each targeted handset model to perform the development process, from obtaining the software development kit right through to placing the finished app in their App store.

The nice thing about this process is that we also get engagement from the handset manufacturer and can access technical support (and I dear-say some marketing opportunities too). The real 'win' is that we can then reach any customer using that particular handset, on whatever cellular network they reside.

All handset manufacturers have - or are getting - this development / support / marketing infrastructure in place, visibly seen by customers through App stores - Apple App Store, Nokia OVI, Android Market, and others.

All this is great: If we want to target, say, a Nokia N97 because we like the interface and think customers would get an engaging experience with a Tesco application on it then that's a decision we can make, and work with Nokia to ensure that all customers who have an N97 can get the app and enjoy a great experience. Placing the app in the Nokia OVI store seems obvious to us - it will reach all Nokia customers with N97s across the UK on whatever cellular network they happen to be on. "Lesser" phones won't see the app on OVI because the system detects their phone and filters out apps that won't work.

So please, help me understand why we would even think about putting an app into a cellular provider's app store?
  1. Why would we only target a certain cellular provider's users? We want to reach all customers! Do we then have to go round to all stores? Yes - but would be easier targeting the one store created by the handset manufacturer.
  2. What about new unlocked handsets (not tied or branded to a cellular provider)? They only have a choice of their handset manufacturer's store anyway.
  3. What if customers change cellular provider? Do apps downloaded from one store get barred from working? Even if they do keep working, is there a possibility that a customer may think they will stop, so feel they are locked in to their current provider (and maybe resent us for apparently forcing this situation?).
The fact is, you need a handset for mobile communication so why not work with the people who built that handset? App stores provided by hardware manufacturers offer a simple message of 'these apps will work on your phone - and we know it because we built your phone and we've tested the app!'

I think cellular providers' app stores will confuse the message for customers and I'm prepared to say so publicly because I'd like to see a debate started somewhere so I can understand whether cellular app stores are any more than a desire by providers to somehow get in on the game for the sake of it.

In my opinion, cellular providers don't want to see the elephant in their room which is that they are becoming just a way of connecting to the internet. They're trying to think up ways of being more than an internet service provider but actually that is what they are. The 'power' is in the handset app/web browser and the content service providers offering web sites and services.

It's not the first time they've tried this - in 2005 I was invited to speak at a conference about mobile payments (where you pay by mobile phone and it goes on your cellular bill). I warned the organisers that I'd be a black sheep and even forwarded the slides of what I was going to say, but they accepted me anyway.

I told the conference that Tesco has a perfectly fine payment system in place on the website already, nice and simple for customers to understand and that all that was needed was to have an internet connection from handset to our web site and customers can type in their credit card just as they always have. Oh, and that every single shopping website in the world works like this - no need for any cellular financial intervention, thank you.

I'll never forget spotting the furious shaking of the head from the back of the room from one of the sponsors of the event. Everyone else was nodding.

I said it then and I'll say it now: All customers need on their handset is an internet connection between their app and our service - and nothing more.

I'll add: Given apps need to target a particular handset model, who is best able to get that app to all customers in the lest confusing manner - a cellular provider or the actual manufacturer of that handset?

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If you are a cellular provider with an App Store, I would be happy for you to guest-write a post for this blog with your counter argument which I will publish un-edited (unless it's an ad of course!). Contact me at nick@lansley.com to take up this opportunity.

3 comments:

  1. I agree with you. I think operators want their own app stores because in a sense they had the first app stores. They were usually called storefronts and sold ringtones, wallpapers and java games. These storefronts are obviously in decline so they want to revitalise them by calling them app stores!

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  2. I think the answer is simple, it is all about the £££. Operators have seen how many millions Apple has made from its app store (it was estimated to be between $25m to $40m in May last year - http://brainstormtech.blogs.fortune.cnn.com/2009/05/14/how-apple-profits-from-the-app-store/), and they want a piece of pie!

    Regarding mobile payments, I partially agree with you. For large companies such as Tesco, Amazon, etc who already have a large customer base there is no need to change to a different payment platform, you already have perfectly good infrastructure to handle it. But what about the smaller companies who don't? They can either build their own system, or use an existing mobile payment platform (which at most will require a weeks worth of integration), then start selling. No need to worry about security as it is handled by a third party.

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  3. Hi its really very nice i enjoyed a lot to visit..latest mobile phones

    ReplyDelete

As this blog grows in readership - and because it carries the Tesco brand - I have had to become more careful about the sort of comments that are acceptable. The good news is that I'm a champion of free speech so please be as praising or as critical as you wish! The only comments I DON'T allow through are:

1. Comments which criticise an individual other than myself, or are critical of an organisation other than Tesco. This is simply because they cannot defend themselves so is unfair and possibly libellous. Comments about some aspect of Tesco being better/worse than another equivalent organisation are allowed as long as you start by saying "in my personal opinion.." or "I think that...". ... followed by a "...because.." and some reasoned argument.

2. Comments which are totally unrelated to the context of the original article. If I have written about a mobile app and you start complaining about the price of potatoes then your comment isn't going stay for long!

3. Advertising / web links / spam.

4. Insulting / obscene messages.


Ok, rules done - now it's your go: