The bit pipe nightmare has lurked in the industry’s sub-consciousness for many years now. The threat stemmed from how the Internet would merge with mobile communications, smashing down the traditional operator and subscriber relationships. So far this threat has been contained. Mobile operators adopted a walled garden approach where they aimed to hold on to an exclusive relationship with their customers and gauged their value by the money spent directly with them. And, despite the proliferation of viable mobile broadband, subscribers haven’t strayed very far from the walled garden. That is until now.
In July 2009 the Apple Apps Store will be a year old. Its effect on the operators’ relationships with their customers is profound. Already 500 million iPhone applications have been downloaded from the Apps Store. Other handset vendors like Nokia and RIM are re-modelling themselves as app and media service providers with varying success. As a result, these brands and businesses are developing a myriad of direct relationships with operators’ customers through these new app storefronts.
Given this scenario, which is shared with many households other than mine, it is natural that the mobile operators are now keen to offer similar storefront offerings to their customers. But is this enough? And how can they re-capture the initiative?