HomeMobile EuropeOperators urged not to chase the app opportunity

    Operators urged not to chase the app opportunity


    Telecoms service platform provider OpenCloud has conducted research which it claims shows a slackening of appetite for mobile apps – and has implications for operators chasing the app dollar.

    OpenCloud’s My Mobile Lifestyle 2010 survey, conducted by research agency Loudhouse, looked at consumer attitudes to mobile phone usage beyond just voice calls, in particular apps, and the types of services they desire. The company claimed these findings are “a warning to operators who have been tempted by the siren call of the ‘App Store'”.

    Although this is just one survey of a thousand UK consumers, OpenCloud makes some big claims based on its findings. It finds that,
    1. Core functions still rule. Text is by far the most used functions (83%) with only 39% of those who can downloads apps, regularly doing so.
    2. Appetite for apps is waning (unless you have an iPhone). The average user has only downloaded 14 apps and a fifth have never downloaded an app at all. Furthermore, 43% of smartphone users are not planning to download any more apps.

    Additionally, most apps “seem to be downloaded for free” or downloaded and then discarded. Users get a phone, download a load of apps, then never use most again, concentrating on just a few apps that are of use to them

    OpenCloud’s the conclusion is that the industry needs to find ways of creating revenues from within these few apps, rather than chase the app store as a means of attracting customers and generating ongoing revenues.

    “This research indicates that mobile operators need to look at their mobile and smartphone strategies. We know that consumers are increasingly savvy with technology and, in particular, their use and expectations of mobile phones. However, apps are not the reason consumers buy their phones, and they are certainly far from being the ‘cash cow’ operators hoped for,” said Jeff Gordon, CEO at OpenCloud.

    It also said in a release, “It’s clear that apps themselves do not influence mobile users in their decision making process.”
    And yet OpenCloud’s own research found a different story when it came to the iPhone.

    70% of iPhone owners are regularly downloading apps against 42% of consumers overall, its own report said. Nearly half of those questioned said they bought an iPhone in order to be able to buy apps. Not only that, but they are also more likely to use all kinds of apps – including social networking, games, music, maps, and so on and so on.

    To interpret the first part of the results – poor download rates, mostly free and discarded apps –  as an indictment of apps themselves as a strategic priority seems to ignore the second part of the results – which is that when apps are delivered well they are popular, and do indeed drive handset choice.

    Granted, operators have plenty of strengths playing to the “core” services the deliver, but it seems early to write off the apps opportunity on the basis of this one report – especially when the report itself shows that when the apps experience is delivered well it does indeed drive usage, and influence the “decision making process”.

    Now, the question of whether operators can deliver that engaging apps experience is another question, but I don’t think OpenCloud has made the case that they should not attempt to.