Answer: Easy payment system for a start would go a long way.
The proof of the pudding is in the eating of course. Launched in February, the Airtel App Central, the first big scale carrier app store in India, has been a big success with 13 million downloads in 4 months (averaging around 1.2 downloads/sec) with about 32% downloads paid for. What’s their secret? I believe it’s something quite simple – their payment system – you can buy apps with one click and the amount gets added to your bill (postpaid users) or deducted from your balance (prepaid users). It’s a simple system, and it works flawlessly.
A lesson to learn for the smartphone app stores perhaps?
So, is there a lesson here for the smartphone app stores such as the Nokia’s Ovi Store and the Android Marketplace also? I think there is. If these app stores can work out a revenue sharing arrangement with the network providers (who already have a billing relationship with the customers), they will make it much easier for people to buy apps.
In fact, I will venture out to say that this can be that critical tipping point for smartphone app stores, something that can bring a lot of people out of their inertia and encourage them to experiment with paid apps on their phone for the first time.
Nokia’s Ovi Store
The opportunity hasn’t gone unnoticed. Nokia has already implemented integrated carrier billing with the Ovi Store in 22 countries (as on May 24, 2010; via). What is surprising is that most of these are developed countries, where the advantage provided by having a non-credit card based payment system is relatively less. The two biggest developing nations – China and India, both among the top 9 countries by Ovi Store downloads, seem to have been ignored.
Well, not really. Recent events are throwing light on the likely reason why Nokia has not pushed ahead with carrier integrated app billing in India – it is interested in launching its own mobile payment system in which it has big investments (Read: Nokia’s Mobile Money Service in India) and India seems to be the focus market right now (the company behind the system, Obopay, in which Nokia is an investor, has systems in place in US, Kenya and Senegal, apart from India).
So, Nokia, possibly, has taken a strategic call to not get into integrated carrier billing for apps in India right now.
Android Marketplace has implemented carrier billing with T-Mobile in the US since the end of last year (via CNET), but it remains to be seen when they will get operators in other countries on board (Qn: How to setup Merchant account for Android Marketplace in India?].
Again, Windows Marketplace has also implemented carrier billing with AT&T in the US but again it’s not clear how long they will take to get operators in other countries on board.
Blackberry App World
BlackBerry is adding support for carrier billing in the new version of its app store – BlackBerry App World 2 (via intomobile) – so there might be a few carrier billing arrangements in place by end of this year.
What does all this mean to smartphone app developers?
Essentially, it means that as smartphone app markets add carrier billing support in more countries, you can expect to see large increase in uptake for your apps. Of course, the carriers will take some revenue share, but in the overall analysis, your total revenues should definitely increase (There is a fear among some that carriers will try to take an inappropriately large share, but I think this is unfounded, if this were to be the case, then the app stores will not agree for such an arrangement, and the carriers will lose out on the extra revenue they would have got – so I think all parties will be sensible about this). In fact, there is always the option of passing on the cost to the consumer – in effect every app can have a base price and an extra markup if the consumer wants to pay via carrier billing.
So what do you guys think? Can carrier billing be the big growth driver for paid smartphone apps? Is it time that the app developers start putting greater pressure on the app stores to work out carrier billing arrangements in all countries?
[Guest article by Sahil Bajaj, Founder of Phonecurry]