It continues to be interesting watching the new “app economy” develop.
As we’ve discussed before, the new mobile application ecosystem — largely the iPhone app store right now but with Android, Nokia, Microsoft, Palm and other app outlets in the offing as well — has the potential to change the telecom playing field (for instance, it seems to be breathing new life into VoIP).
New developments: word of iPhone app ARPU (average revenue per user, a classic telecom metric), more app approvals and some worrisome rhetoric about operators taking it on the chin when it comes to the app ecosystem bottom line.
Here’s what we’re following:
- A survey of 1,200 iPhone owners by app-enabling vendor AppsFire claims that the average owner has downloaded 65 apps for their device, spending around $80 in total.
- The iPhone app for darling streaming music service Spotify (no U.S. version yet) was approved and is now in the iPhone (and Android) app store, ostensibly competing with Apple’s own iTunes store. There are some rather significant caveats: 1) the app won’t work in the background (unlike iTunes) meaning you can’t listen to Spotify while doing something else on the device; and 2) users have to pay for the premium version to use the mobile app, the ad-supported free version of Spotify isn’t supported.
- The Spotify approval made some wonder whether Apple was further relaxing its rules for approving apps that duplicate key iPhone functions. But like the iPhone Skype app (which only works over wifi), the Spotify app isn’t all it could be. And we’re still waiting to see whether Apple approves the GoogleVoice app, not to mention Rhapsody. Meanwhile Apple has approved a location-aware app from Loopt (but seemingly only because partner A&T charges for it while free location app Google Latitude is still awaiting approval. So maybe Apple’s approvals aren’t loosening at all.
- Finally, some mixed news on the AT&T/Apple-iPhone-partner front. The iPhone apparently remains AT&T’s best-selling device, although a study claims that operators offering the iPhone have more hurt than helped their bottom line. The report, by Denmark’s Strand Consult, said “we have not found one operator which has created shareholder value with iPhone. Said one unnamed chairman of an international operator pithily: “the iPhone effect is the effect that comes from moving our management’s focus away from the 99% of our customers that generate the cash flow that pays our bills.”
- UPDATES (Sept. 10, ie, one day later): The iPhone Rhapsody app has been approved, bringing 8 million streaming songs to the iPhone in competition with iTunes, at a price of $15 per month). A good iPhone experience but a different music experience, we’ll see if users bite. But it does represent another step towards a more open, competitive iPhone apps environment.
The iPhone ecosystem remains the biggest threat to the mobile industry status quo, so such data points — even minor ones — represent key pieces in a larger puzzle.
Conclusions? Apple is feeling its way around what parts of this ecosystem it must control — and can profit from — and which parts it can open up to partners — and yet still profit from. The scary part is the degree to which operators seem to be merely along for the ride.
Are operators getting hijacked by Apple? Let us know what you think in the comments below.
