Vodafone's App Store: Bigger than Apple?

It was only a question of time before the first carriers would release themselves from the iPhone-imposed stare and come out all action, and the biggest of them all (by sales), Vodafone, has now raised the curtains on its very own app store. It is the biggest app store to date: Vodafone has more than 289m customers who will - eventually - all be able to access the store (which makes it a cool 8x or so larger than Apple's). Unlike on Apple's App Store, you also do not need a credit card (which, however, you are likely to have anyway when you can afford an iPhone) whereas Vodafone, being a carrier, will bill to their customer's phone bills directly. Very, very cool, huh?

So imagine the power of an app that would go live on Vodafone's carriers all at once. But before we get carried away, let's have a look at the numbers:

Orange UK (in its recently released Digital Media Index; see here) suggested that 4.87% of its users downloaded one game in 2008 (770,000 downloads p.a./ 15.8m users) but this is without an app store but with the traditional catalogue-style offerings.

For Vodafone Group, this would equate to 38,500 downloads per day (289m x 4.87% / 365). If (or when) it includes this offering beyond its own 27 local carriers to its 40 network partners (including Verizon Wireless!), one would be looking at North of 1bn users and, hence, 100,000+ downloads per day. Now, with an app store, this should - theoretically - be further boosted, let's say doubled, arriving at 200,000 downloads per day.

How does this compare with everyone's darling/nemesis (delete as appropriate), the iPhone: I had previously calculated that Apple's app store sees some 4,000 per minute or 5.7m per day... This however includes all those free downloads (about 22% of all apps are for free), so let's say the ratio is 1 paid: for 40 free (which is on the high end of assumptions) or 1:15. This would equate to 144,000 to 380,000 paid downloads per day. So Vodafone's 200,000 wouldn't look completely out of order, would it?

There's even more: Vodafone's decision to bill to the phone bill is only one potential booster since it minimizes friction for the user (Apple: credit card/iTunes account, Blackberry: PayPal, Nokia Ovi: a mix?, etc). The other - and longer-term potentially even bigger one - is geo-awareness: since Vodafone owns the network, it knows where any of "its" users' mobile is at any given time. Now link app usage with geographical location and you could be on to something fairly unique. There is little in the market so far but then: had Apple run its campaign of "bettering life's little problems" in June 2008, it would have looked fairly bleak, too!

So: huge potential but where are the pitfalls?

There's UI and handset fragmentation, if I dare say so. Even though it probably hurts by now, let me repeat: Apple has one model and one deployment method and it nailed content discovery (not perfectly but better than anyone else). Job done. Vodafone has hundreds of handsets on its "to be supported" list. Some are like the Porsche's of their trade ("first available on s60 devices"; ooooh), others are the equivalent to a pedal-powered toy car. The costs for developers to support all these is significant, the cost of management is arguably, too.

Most importantly though, it takes the simplicity and thus ease of use out of the game. And I would posit that this is a big contributor to the (Apple) app store's success: simplicity from entry (ingest an app into the store), management (price, etc) to consumption (download and active use). This will be a tough one for Vodafone to overcome, and it is indeed the one point where OEMs have much better opportunities to "get it right". That the relationship between carriers and OEMs is not always without strain has only recently been proven again, sooooo: the jury is probably still out on that one.

Having said this, Vodafone is better positioned than most carriers though because of its sheer size and footprint. Smaller carriers might struggle to offer developers similar incentives to support their respective offering because they don't scale as well.

For Vodafone, I am concerned that the multi-level complexities they have to deal with (number of handsets x number of operating companies x number of languages x all additional info [geographical and otherwise]) might pose a strain on its ability to roll out quickly and decisively. It might not be as huge and life-changing as Apple's app store but it would certainly lift the "mainstream" of app downloads to whole new level. I am an optimist, so, come on, Voda!

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