Are Carrier 'Apps Stores' Destined to Fail?

Although they've had mobile applications for some time, US carriers are now trying to raise their apps profiles more formally -- most visbly Verizon and AT&T. Yesterday AT&T introduced a meta-social networking app:

AT&T today announced the availability of AT&T Social Net, a free mobile social networking application that combines access to Facebook, MySpace, Twitter and customizable news feeds within a single application.

“Five of the top 10 searches on our mobile Web portal are for social networking sites, a clear indication of the growing popularity of mobile social networking,” said Mark Collins, vice president of voice and data products, AT&T Mobility and Consumer Markets . . . 

Through a single carousel menu, users can view and manage their social communities, communicate and track events in real time, and get live news feeds from over 35 leading news, sports, and entertainment sites. Once a user populates the application with his or her information, users can see and respond to tweets, status updates, wall posts, profile comments, photo activity and friends’ news feeds across their communities. Users can also access new or unread articles from their customized content feeds.

And yesterday also at its developer conference, Verizon Wireless formally launched its Vcast application store. The store will open in Q4 of this year. It will mimic the 70-30 payment split that Apple uses, with 70% to developers. RIM has also announced that it will support the VCast store. (The repositioning or expanded positioning of VCast suggests that the mobile TV service is not doing well.)

Carriers have access to customer data and have a billing relationship with subscribers. This gives them some "built in advantages." However I have doubts whether carrier apps stores can duplicate the success of the iPhone or Android. They might enjoy modest success, but carrier apps stores are probably better suited to lower-end handsets rather than smartphones.

Ironically carrier apps stores are party of a "dumb-pipe" avoidance strategy re smartphone owners -- to make them relevant to users beyond the billing relationship. However, smartphones minimize the carrier relationship with the subscriber. The device OEM is at an advantage with smartphones. And all the major smartphone OEMs are in various stages of launching their apps stores. So the question, for me as a consumer, is why would I buy from VCast if I can buy from BlackBerry Apps World directly? 

The reasons would be:

  • Payment: it's quicker and eaiser to buy the app through Verizon
  • Unique: it's an app that's not in Apps World
  • The overall Verizon apps store experience is better 

The fragmentation of the smartphone market will be reproduced for developers within a single carrier apps store because they will have to be available for multiple handsets with multiple operating systems. Developing for VCast means dealing with Windows Mobile, BlackBerry and so on.

If I were developing apps for the BlackBerry I would develop first for Apps World and second, if at all, for VCast (unless the financial deal from VCast was better than Apps World). If my app could go both places for more exposure, so much the better. Thus the carrier apps store potentially becomes a secondary marketing vehicle for the developer.  

Finally, the carriers are just not good at user experience design. Collectively all these variables and factors make me believe that they're not going to be able to pull this off and the handset based apps stores will largely prevail.