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Verizon courts developers too late?

GigaOm’s Stacey Higginbotham interviewed Verizon’s Ryan Hughes yesterday about the mobile application store that Verizon is building.  Developers will be able to build applications for whatever platform they want from Windows Mobile, Palm, Android and BlackBerry and receive a revenue share for whatever is delivered on the Verizon network. 

The carrot? Developers can also tap into Verizon subscriber data for location or to bill a customer for example.  And the stick? Verizon’s store will be the only marketplace on devices sold by the carrier.  Yes, customers will be able to download the RIM BlackBerry App World or the Windows Mobile Marketplace, but the default store will be Verizon. 

That’s gotta feel like a toe to the ’nads if you’re RIM and have just invested in bringing BlackBerry Storm to the Verizon network. 

More to the point, as a developer would you invest energy in the Verizon store?  We are not currently delivering Calliflower on any platforms except the web and iPhone.  However, I would have to think long and hard about committing to a carrier specific store.

  1. Committing to a carrier specific strategy means negotiating with hundreds of carriers around the world for distribution.  Imagine, as a small vendor, trying to launch a product in that environment!  Working with the handset manufacturer’s store means dealing with (at most) a half dozen handset vendors, who handle the carrier relationships on my behalf. Best of all, if the developer chooses to execute a rolling launch where each handset port is delivered separately from others, they only deal with a single entity at a time.
  2. While at one point in time, the inarguable benefit of carrier subscriber data was a powerful carrot for developers, the carriers failure to act has led to others providing similar benefits.  The benefits of customer subscriber data, location, and billing have all been delivered at this point by the handset manufacturer stores and devices, and in some cases better than the carriers can deliver it.  For example, location is an especially weak benefit when acquired from a carrier.  The location data provided by the carrier is the lowest quality available.  See my piece on iPhone location services and SkyHook Wireless for more details.

I can’t help but feel that the carriers missed this train.  Many of us were calling for them to do exactly what Verizon is proposing, years ago.  2005’s Voice 2.0 Manifesto said, in part:

Fundamentally, this turns the service provider value network on it’s head.  In today’s world, the network operator aggregates services from a number of vendors, and then delivers them to the customer.  Tomorrow, the customer will buy the services they want from whomever they want, and the service provider will deliver a portion of that revenue to the owner of the platform component.

Led by Apple, the handset vendors have stepped into the vacuum with powerful end user devices and commerce platforms.  It’s difficult to see how Verizon can set the clock back now.

{ 3 comments… add one }

  • Roger Toennis July 14, 2009, 7:33 am

    Apple is the modern day Pied Piper who convinced one of the big carriers (ATT) to let it come into it’s walled city in Telco-land. Apple, in concert with it’s app developer minions, started playing pipe music (Free and paid apps in App store) to entice the residents to keep paying pay their rent/taxes. Many Verizon and Sprint residents heard about this sweet music and moved to ATT’s city. ATT, fat and happy with its plan, fell asleep. But by the time it and Verizon and Sprint wake up, all the residents will be spending all their cash on the Application concerts and demanding that rent/taxes to live in the cities be free. Self-Commoditization is always the most rapid way to slash your margins.

  • Alec July 14, 2009, 7:48 am

    Granted Roger. And in a world where commoditization may be inevitable, perhaps it’s better to proactively commoditize than to be commoditized.

  • coldbrew July 14, 2009, 8:27 am

    The details aren’t clear enough to make an informed judgment, but as long as: 1) the APIs are simple enough 2) the application process is simple and ‘fair’ 3) the revenue split is competitive (i.e. 70/30) 4) the process for adding the OEM’s stores is straightforward for the tpical end user, then this is the best I would’ve expected from VZ. While the motivations are quite obvious, the details will make all the difference and it isn’t clear if VZ understands that the success of their store will be tied directly to the success of developers and satisfaction of their customers.

    From a practical perspective as a developer, it doesn’t appear that the work involved to get into the store will be cost prohibitive or cause high overhead to manage. I’ve handled ~40 vendor relationships for a 5 person embedded systems company w/o any issues. An office manager can easily be handed these tasks once the process is in place.

    Or, you can advise people to participate in the silliness that I do and carry a 3G>wifi+ipod touch+battery (yes, I carry a purse now). :)

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