Carriers Want Their Share of Billions in Apps Revenue

During this year's Mobile World Congress, the biggest trade show in Europe devoted to mobile technologies, the best time slot for holding a press conference was given to the WAC organization, i.e. Wholesale Applications Community, formed at last year's gathering of the telecommunications elite in Barcelona. The congress organizer, the GSM Association, did its best to make sure that WAC is the subject which would be most talked about, given that it is mostly financed by membership fees from those who care most about popularizing WAC -- the carriers.

WAC was created during the 2010 MWC after the initiative of a dozen world's biggest carriers, with the aim of developing mobile platforms that would enable developers to make applications independent of the operating system of mobile phones.

The platform and the organization share a name, while applications written for WAC should be available to all smartphone owners through an app store which will be jointly offered by carriers associated in WAC.

WAC's first anniversary was marked in Barcelona this year, and about 80 exceptionally successful carriers from all corners of the globe have joined the organization, including Verizon, Vodafone, AT&T, Smart, China Mobile, Orange, Telecom Austria Group, ZTE, Deutsche Telecom, Telefonica, NTT Docomo, Telenor and others.

They have obtained the support of devices and equipment manufacturers, including Samsung, LG, Sony Ericsson, Huawei, HP, IBM, Intel, and more.

There's Money To Be Made
If it were not for such respectable companies backing it, it would seem like a utopian dream to ever hope to create a developer's platform for generating applications that work on phones with Android OS and those with iOS, as well as on BlackBerry, Windows Phone 7, Bada OS and Symbian OS. Still, the motive for setting up such a platform is anything but idealistic: profit. Carriers have realized that vast revenue is slipping through their hands from the sales of mobile applications.

Apple's App Store for the iPhone has proved to be very successful, and the idea of an on-device software store was copied by Google, Microsoft, RIM and others in time. As a result, billions of dollars from mobile app markets are being funneled through a few companies which take approximately 30% of income from every application sold.

In doing so, carriers only profit from download traffic created by smartphone users buying applications through a 3G connection, not Wi-Fi. Actually, less is made on 3G traffic, because of favorable flat data plans which they are forced to offer to the market.

Furthermore, nearly all companies behind the existing app stores are in U.S.A. or Canada, leaving Europe and Asia out in the cold, giving the imbalance regarding the mobile applications trade on a geographical level as well.

The Carriers' Solution
WAC is an opportunity for carriers to take a tasty slice of the mobile applications cake, and for Europe and Asia to start making money on mobile applications. But there's a critical question to be asked first: is it possible to create an application that would work on several different operating systems?

The answer is logical -- make the app into a web runtime application, created according to standards supported by Android, Symbian, iOS, MeeGo, webOS, etc. An official list of operating systems which these applications would run on has still not been revealed, but WAC regularly uses absolute terms, mentioning "all" smartphones, "all" platforms, "all" devices, etc.

It seems it is impossible to create a web application on the same level of complexity as an app made by using the API of a specific OS, but WAC is based on up-to-date technologies like HTML, JavaScript, CSS and the BONDI project, JIL API and OpenAPI. With a well put together WAC SDK (available at www.wacapps.net), it is actually possible to offer useful software.

Does It Have a Chance?
With support given by smartphone manufacturers who are prepared to add the WAC app-store to their devices, and a promise to developers that their applications would work on far more devices than the ones they are creating for a specific operating system, a good prospect for WAC is also ensured by a relatively high annual membership fee being posted by everyone in the organization (150,000 Euros for regular membership, and 300,000 as a Board membership fee).
There's even the PR, which was done by the GSM Association during the MWC.

As a smartphone user, I would personally love for WAC to succeed, simply because there would be more software available. I would also get to keep some of my favorite apps if I wanted to switch to a new phone with a different operating system.

But the case wouldn't be the same if I were a developer -- my intuition tells me that I would make more money if I envisioned a good game or a useful application specifically for iOS, Android or Windows Phone 7.