In Apps World, Divide and Conquer Carries Risks
By Kevin J. O’Brein
February 16, 2010
Barcelona — In the world of mobile phone applications, Apple, Google, Nokia and their competitors seem to have only their differences in common.
The players in the field who are attending the Mobile World Congress here this week are each holding a conference to educate software developers about the idiosyncracies of designing apps for their phones.
Most mobile software works on only one type of device, or for one network operator. An iPhone application will not work on a Nokia phone, and neither would work on Google’s Android system or Microsoft’s Windows Mobile.
The state of play, experts say, is a cacophony of incompatible, competing software that threatens to slow the growth of the mobile Internet.
“These are all proprietary systems,” said Michael O’Hara, chief management officer of the GSM Association, the London organizer of the Barcelona event, which is the industry’s biggest trade show. “For consumers, they aren’t portable. We are creating islands of applications out there that can’t communicate with each other.”
The competition is similar to what happened in the early days of the computer industry, when pioneers like Microsoft, Apple and International Business Machines tried to foist their own designs and digital quirks on the public in a battle for market share.
But consumers grew tired of being locked into one company’s products and prices, and over the past decade, open standards and products that can be used over a series of devices have come into vogue.
That is one reason why Microsoft — which was forced by European regulators to make its ubiquitous Windows operating system compatible with other products — will distribute the Web browsers of rivals in Europe this year, and why I.B.M. has become one of the biggest sellers of “open-source” software for business.
Such an accommodation, however, appears to be a long way off in the apps world.
Most companies are hoping to mimic the success of Apple, whose proprietary iPhone elevated the obscure field of mobile applications into a multi-million-dollar enterprise.
Last year, $4.2 billion in mobile applications were sold, almost all of those iPhone applications, according to figures compiled by the research firm Gartner. After splitting the revenue with developers, Apple pocketed about $1 billion in sales in 2009, based on industry estimates.
But Apple — which is not attending the Mobile World Congress — no longer has the field to itself. With sales of mobile applications expected to rise 62 percent this year to $6.8 billion, according to Gartner, its rivals are elbowing their way in.
Nokia, the leading cellphone maker, said consumers were downloading more than one million applications a day from its Ovi online business. Samsung, LG, Research In Motion, maker of the BlackBerry, and Google have all reported strong traffic on their newly created application stores.
Big network operators are also forging alliances to push their own technical standards. But perhaps the most unlikely entrant in the field is Alcatel-Lucent, the maker of network equipment, like Alcatel-Lucent.
In December, Alcatel-Lucent, based in Paris and New Jersey, began hooking up network operators with software developers and retailers to build mobile applications for multiple networks and operating systems. More than 50 operators have expressed interest in the program, according to the company, and applications are in development.
In Barcelona on Tuesday, Alcatel-Lucent announced that it was expanding its role as an application broker by setting up a cloud computing-based development laboratory it called a “sandbox in the sky” to speed development of broader applications.
The company also began an exchange to meld existing applications into new ones, drawing in third-party investors who help finance the creative process.
“We’re in this to help everyone in the application ecosystem make money,” said Johnson Agogbua, who is in charge of the application program at Alcatel-Lucent.
Mobile operators are also organizing among themselves. Last year four operators with a combined one billion customers — China Mobile, Verizon Wireless, Vodafone and SoftBank Mobile of Japan — formed the Joint Innovation Lab, or J.I.L., to develop applications for handsets sold over their networks. The group has published a specification for a mobile “widget,” which is a simple type of phone application that displays real-time updates of limited data, like the current temperature.
LG, Samsung, R.I.M. and Sharp are making phones using lab’s widget specification.
“We believe this will be good ultimately for the consumer because it will give them more choices,” said Peters Suh, the J.I.L. chief executive. “It is also an opportunity for operators to take back the initiative.”
But the alliances, which are proliferating, are also complicating matters.
On Monday, 20 operators, including AT&T, Sprint, Orange, Deutsche Telekom, América Móvil, NTT Docomo of Japan and Bharti Airtel of India, created the Wholesale Applications Community, another group with the aim to develop common standards. The four operators in J.I.L. also joined, but both efforts will continue to run in parallel, at least for now.
Some question whether close U.S. rivals like Sprint and AT&T, which pay developers to create applications unique to their networks and phones, will end up using a common standard, which could allow customers to more easily change carriers.
“Most operators are selling the same phones for roughly the same price,” said Thomas Kaehler, the founder of Communology, a mobile application developer in Cologne, Germany. “They seek unique applications for differentiation but it has fragmented the market.”
Besides joining the new operators’ alliance, Sprint is also participating in Alcatel-Lucent’s cross-platform initiative. Sprint was the first U.S. wireless operator to develop its own set of mobile applications, using a stable of independent software developers.
But the demands of sustaining the solo effort became too great.
“We are now no longer a walled garden, but an open marketplace,” said Len Barlik, a Sprint vice president for product development. “We can’t do it all ourselves.”
© 2010 The New York Times Company 
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