The tightly controlled carrier-based US content biz is being tested by Apple and Google.
Apple's App Store is here, Google’s Android is coming – and the US on-deck content sector may never be the same again.The big four carriers have traditionally held the content business in a vice-like grip, with only giant publishers getting placement, and everyone else sent to aggregators. Even D2C firms need approval before they can use the networks.
Now, observers are asking how long the centre can hold as consumers glimpse the alternative offered by the iPhone, and particularly Apple’s App Store, which promises thousands of intriguing applications delivered seamlessly.
It’s proving just as compelling for developers, who love the business model and the smooth ecosystem.
Content providers can smell change. Greg Ballard, CEO of games publisher Glu Mobile, told ME: “The Apple model is fundamentally different from those carriers and publishers have used to build the industry thus far. The ripple effect this creates will be the focus of our attention in months – and presumably years – to come.”
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The numbers say it all: the App Store shifted 60 million downloads in its first month, generating $30 million. This puts Apple on target to gross $360 million a year.
According to the Venturebeat blog, this embarrassed US carriers, which managed just 60 million downloads between them in 1Q 2008.
Carriers are already responding. T-Mobile USA is preparing to replace its portal with a meritocratic and open app store available to almost any third party.
Venetia Espinoza, T-Mobile’s director of mobile apps and partner programmes, said: “T-Mobile is working to foster an open wireless services platform which will provide developers with the tools they need to make new, innovative experiences.”
T-Mobile is also expected to be the first operator to launch a Google Android device, the HTC Dream. The arrival of so many web-originated Google applications on handsets should escalate the demand from users for a more open mobile experience.
This is bound to put pressure on the other carriers. AT&T has experimented with more openness via its Beyond MEdia Net platform, which speeds up access for third parties and makes apps more discoverable.
Last year Verizon said it would open its network to multiple apps and devices, but nothing concrete has happened since. Analysts believe the project may be re-ignited with the unveiling of an Android phone.
