Did your application get rejected by an App Store? Is it a monopoly case worthy of DOJ and EU?

App Stores – Rejecting many apps
The rise of app Stores like Apple’s AppStore, Microsoft’s Windows Marketplace, Nokia’s Ovi and others from different mobile platform companies has been a boon to software developers as it offered a cheaper way of distributing applications. With 25,000 apps approved by Apple, I hear a very large number of apps are also stuck in the Apple approval queue.  How big is this issue – worth 3M pages on Google. I came across one great postindicating all the unofficial reasons for rejection of iPhone apps. In this business, application delayed is application rejected because the more you are delayed the more the chances of a competitive app being in the store and hence negating your app.

App Store rejections – Is there a reason?
Is there a criterion for rejecting an application? One common cause for rejection seems to be that it competes with what is already bundled with the platform like a dialer or browser. None of the vendors are explicit about the criteria they use for rejecting apps until Microsoft took the lead and actually published its criteria. Bravo, Microsoftand hope others will follow you so that some of the arbitrary rejections can be controlled. Google, with its Android is an exception as it seems to accept most apps but that might change over time as Android becomes more popular. Has your app been rejected by an app store and do you know the reason for it? Please comment here for others to understand and see.

Criteria for Rejection
In studying through Microsoft’s criteria here are a few key themes that emerged
If you compete with what we have bundled, no matter how bad, we can reject your application – last time I checked Microsoft went to great lengths to defend a law suit like this for Internet Explorer’s bundling on the PC.
If you compete with the channel we aim to please, we can reject your application. Is that legal?

Is it time for DOJ and EU to step in?
I am not a believer of wasteful regulation or litigation but it does smack of anti-competitive behavior against smaller companies/developers and above all for consumer who are deprived of many choices. Do you agree? I just hope that platform companies publish their criteria, act fairly and swiftly now when it is too early in the cycle so that we don’t see waste of our tax dollars in DOJ, EU and other authorities bringing law suits against these companies like it has happened to IBM, Microsoft and Intel.

Let me know what you think?

R. Paul Singh

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In light of App Stores, Do Mobile Operators have a role to play in the Mobile VAS market?

It is widely believed that with the success of Apple App Stores and launch of new App Stores from all of the handset manufacturers, mobile operators have no role to play in VAS markets. (For the purpose of this article we will only look at applications that need data channel whether it is GPRS, EDGE or UMC and specifically exclude WAP and SMS type services.) The statement above has different applicability depending on the type of handsets and the markets.

The pricing for any data applications = Application subscription fee (one time or monthly) + data charges.

As long as mobile operators hold the key to data charges they will continue to have a role to play in the Mobile VAS market.

For  Android, Blackberry,iPhone,  and Windows Mobile phones, mobile operators have much less control because:

• Generally some minimum data bandwidth is included with the basic service and so leverage of data pricing from mobile operator is non-existent
• Users of these phones tend to be more savvy about uploading apps over the air and using it
• Users of these phones are more likely to own a credit card; a currency for buying from App Stores

In addition, mobile operator have very little leverage in markets where:

• Aggressive unlimited data plans have been offered like in the US where $20 buys you unlimited data plan on most phones
• SMS spamming of users by the operator is not acceptable like in the US and some Western European markets
• WAP portals of mobile operators never really attracted a whole lot of attention from its users like in case of AT&T in the USA

So, is there any market where mobile operators have leverage? Look at the case of a photo and video sharing application on a Nokia N Series phone. If a user uploads about 20MB worth of media a month and is charged per MB, the cost adds up and user is unlikely to use the app from Nokia’s Ovi App Store when their monthly bill arrives or when their pre-paid account dries out. This is where an operator can offer a zero rated plan and charge a fixed price for the app irrespective of the data usage.

Bottom line is mobile operators can continue to play a role in VAS markets where:

• They can control and bundle data and app pricing in a unique way
• When the app extends to wider phone types and choices beyond iPhone, Blackberry and Windows Mobile. Examples include Nokia Series 60, Series 40, Sony Ericsson and others
• Credit cards are not readily available and Pre-paid is the dominant platform as operators can act as currency brokers
• Can access and get their users to act in a cost efficient way like SMS and WAP
• Mobile operators subsidize handsets and can bundle any app wherein discovery problem can be addressed inexpensively

So before pundits declare death of operator VAS markets they need to look at each individual market before making a generalized statement based on iPhone App Store or only the US market.

I invite you to share your experiences from different markets here for others to learn from!

R. Paul Singh

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Finally some good news from MWC 2009 — Can we now build $100M Mobile VAS companies?

One of the significant news from MWC 2009 (mobile world congress) was the culmination of rumors with official announcements of app stores. Now we have a long list of Application Stores including:

• Apple is the innovator and king of this and called it Apple App Store
• Google called its app store as Android App Market
• Nokia extended its service brand Ovi to Ovi application store
• Microsoft may call its service SkyMarket and its own service as My Mobile for Windows Mobile phones
• RIMM called it Blackberry Application Store Front
• Samsung for its smartphones created Samsung App Store

Why is this significant for the Mobile VAS (mobile value added services) market?

Until now, Mobile markets have suffered from 3Ds:

• Distribution
• Discovery
• Dollars or whatever Currency you prefer

Theses announcements solve two of the problems -  that of Distribution and Dollars.

With smartphone sales estimated at over 60M units in 2008, it is clear that software developers only working on smartphone now have access to a large market. Should VAS developers even bother with lower-end phones? We will tackle this in a later blog.

How did we reach the 60M units number – based on many articles and estimates with the best one from Eric Zeman at Information Week.  Here is the breakdown which may cause many arguments and surprise many:

• Apple shipped 14M in 2008
• Microsoft shipped 20M in 2008 – yes more than Apple
• Nokia shipped 18M in 2008 with N and E-Series counted as smartphone
• RIMM shipped close to 14M in 2008 of Blackberry Curve and up

With an average price of $20 per application/application pack for the life of smartphone, there is room for many $100M software companies in the mobile VAS space with focus only on smartphone. No need to have large expensive sales forces calling on many mobile operators worldwide as distribution is now possible from the app stores which in most cases give 70% of the revenue to software developers rather than 20-50% which operators are giving to the software developers. So what does this mean for Mobile Operators – relegation to being a dumb pipe or? Of course, it is different for different geographies – we will tackle that in a later blog.

Now comes the third problem something that has plagued most application stores including that of facebook, myspace and hi5. Yes that is the problem of discovery and this is where virality, usefulness and marketing becomes ever more important. We will tackle this in the next blog.

R. Paul Singh

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