Apple vs MWC: Battle of the apps

Apple's domination of the mobile phone applications market is under threat from a new alliance of networks and manufacturers. Nick Clark reports
Click to follow
The Independent Tech

Apple tends to ignore the Mobile World Congress (MWC), the industry trade show that kicked off in Barcelona yesterday, but its spectre looms as large as the towers of the La Fira exhibition centre which hosts the event.

Rivals have been playing catch-up since the iPhone was launched in 2007, and the MWC is often where they announce their latest initiatives to win share from the Californian giant.

While a series of partnerships, handsets and software was announced yesterday, the talk was dominated by the rise of applications, and a significant announcement from the industry that it was to challenge Apple on its heartland.

The GSM Association (GSMA), an industry body, announced that 24 telecoms operators have teamed up to form the Wholesale Applications Community (WAC), an alliance that could bring the next generation of apps to 3 billion mobile phone users around the world.

Vodafone, Orange, T-Mobile and O2 have all signed up, AT&T, Verizon Wireless and Sprint are members in the US, as are China Mobile, China Unicom and India's Bharti Airtel. The GSMA added that three of the world's largest device manufacturers – LG Electronics, Samsung and Sony Ericsson – are to support the move and expects more to sign up as the momentum gathers.

The WAC has been created to unite the fragmented apps market "and create an open industry platform that benefits everybody – from applications developers and network operators to mobile phone users themselves". It will create one marketplace for apps, which will then be able to work on the devices run by all the operators involved, regardless of the handset or the software that runs on it. Rob Conway, the chief executive of the GSMA, said: "This is tremendously exciting and will serve to catalyse the developments of a range of innovative cross-device, cross-operator applications."

Geoff Blaber, director of devices and software platforms for research group CCS Insight, said it was a "major development", adding: "In the mobile industry there are many different standards, and this is looking to bring them all together. The motivation is to bring some consistency to the industry by creating one development platform."

Currently, apps are mainly downloaded on to smartphones, which make up 18 per cent of the total mobile market. The WAC plans to bring them to a huge range of other devices as well, opening up the opportunity for mobile users to gain access to a vast range of games and services. "This isn't just about smartphones," Mr Blaber said. "It is relevant for many other devices. This move brings applications to the mass market."

He added that operators were trying to "reassert control" over applications after being outflanked by Apple. "Apple gave applications mass market visibility. The operators originally looked to control distribution and limit it, which didn't work. Apple opened it up. But if you look at it, there are still a small proportion of consumers downloading the apps. This could really see it take off."

The key is the content, and encouraging developers to create the latest apps on the new platform. Jonathan Arber, a senior research analyst at IDC, said: "Attracting and retaining developers is vital for any application store offering to succeed." He added that mobile application developers have steered away from the operators because they "face a high level of fragmentation in the industry, in terms of both technology platforms, and individual operators' working practices".

Nokia, BlackBerry, Google and Microsoft all have their own app stores but it was Apple that harnessed the concept. The interest in downloading tabs that can access anything from train times to computer games has taken off spectacularly, with more than 3 billion downloaded in the past 18 months on Apple's App Store alone.

It took the industry by surprise, and even Apple's chief executive, Steve Jobs, who said shortly after the launch in 2008 that "we've never seen anything like this in our careers".

The operators will be keen to lift their game over apps because it brings in customers and revenues. Apple does not reveal how much it makes off apps, and while many are free, it receives about 30 per cent of revenue from those sold.

The research group Gartner said the total revenue for apps hit $4.2bn (£2.7bn) last year, rising to $6.7bn this year. In 2013, it predicts 21.6 billion apps will be downloaded, generating $29.4bn. Money transfer, mobile search, health monitoring, instant messaging and music applications will be among the most popular apps downloaded in the next two years, Gartner added.

The WAC hopes to have created a platform for apps within the next year. However, bringing together 24 heavy-hitting mobile industry players will still be a challenge, Mr Blaber said. "They know the issues and are hopeful that the vision should see them through. The reality is that it will prove very challenging for a wide range of players with competing interest."

Mark Newman, chief research officer at Informa Telecoms & Media, agreed and questioned whether developers will throw their weight behind the idea. "They are more interested in developing apps for Apple and Android and have historically distrusted operators because of the unfavourable revenues share deals that have been on the table. A number of the developers that we have spoken to would rather operators keep out of the applications development community entirely."

Nokia yesterday announced an initiative which caters to the development of apps. It has teamed up with Intel to merge their Moblin and Maemo software platforms to help develop applications for smartphones and other devices. It made the move to create MeeGo in a bid to "accelerate industry innovation and time-to-market". It plans to launch devices with the software later this year.

Comments