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Apr. 5, 2010

So far, more than 140,000 mobile apps have been developed for the iPhone, and the number is growing rapidly. And since Google and Microsoft have now entered the mobile phone market as well with the Android and Windows Mobile 7, there’s just no telling how much faster the number of mobile apps will grow to.

With all these new apps, wireless carriers will need to adopt an approach that takes into account the fact that data will also be the primary driver of revenue in this market for the foreseeable future.

One of the most heated debates at this year’s Mobile World Congress in Barcelona was around the role of the wireless carrier in an app store world, and it’s a conversation that isn’t likely to go away soon. Gartner earlier this year forecasted that consumers across the globe will download approximately 4.51 billion mobile apps in the coming year, up approximately 2 billion from 2009’s numbers.

Gartner also predicts that app store revenues will grow to almost $7 billion in 2010, but that free mobile applications will still represent well over 80 percent of downloads this year and is expected to approach 90 percent in less than three years from now.

But for now, it’s still unclear how the app store revenue model will ultimately shake out between the major platform players, OEMs and wireless carriers, but one thing is clear: carriers will never be comfortable with merely being the pipeline for the data, and they shouldn’t be.

Today's major players in the wireless industry are going to have a difficult time accepting this, as Google, Apple and Microsoft will all want to be considered the primary enabler of applications on their respective platforms and design their own revenue models as such.

However, with mobile service providers offering a vital means for consumers to receive these applications, ultimately, there will have to be a revenue-sharing model that enables all these parties to benefit. Right now, there is none and this is exactly what worries so many industry observers.

And while wireless carriers are working toward hammering out this revenue-sharing model, they can also be focusing on providing services and data options that allow consumers to view them as the gateway to the ultimate apps world.

Lately, the app data deluge has made network bandwidth a really serious problem for carriers, forcing mobile operators to significantly reduce so-called "all-you-can-eat" data plans and even incentivize their customers to use less data.

However, some observers now agree that operators will most likely solve these bandwidth issues, as they have in the past.

And once they’ve done so, the next step will be to develop revenue models that enable them to leverage the burgeoning data market in the way that makes them the most essential to their wireless subscribers.

Enabling cross-platform application sharing is a service that the carriers can really provide, and something that needs to happen sooner rather than later.

Some feel that this should be implemented at the handset level, but not everybody agrees. But it sure is one way that wireless carriers can make themselves essential to their subscribers in a way that keeps them relevant in the app store world.

It will be interesting to see how all of this pans out in the next 3 to 6 months, and to see if the trend continues in the same direction. We will keep you posted.

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Source: WBG.