Has the Power Shifted Back to Operators?

Over the past few years, we’ve seen the OEMs (including platforms) take a more and more facing role to end-users. The OEM controls the App Store; the OEM has the direct consumer app billing relationship; the OEM is launching new services that often are in direct conflict with existing services that operators have managed for years; the OEM is dealing with customer service directly (ie call ATT regarding the iPhone and you are directed to Apple customer support) – the list goes on. Ask any developer today where do they go to build and distribute their apps – they go to the OEM for development support, for distribution and most importantly, for their checks!

With that being said, ATT’s and now O2’s recent announcements of moving to metered data plans has created a potential shift-back in control to the operator. In Google’s perfect world (although not admittedly), operators are dumb pipes, building infrastructure to enable voice and data services. Operators focus on their networks, leverage their phone retail distribution channel and deal with billing and customer service as it relates to voice and data. For services, the OEM takes charge – part of a broader concept that in the new world order, OEMs will pay operators a percentage of their services revenue and not vice-versa (a la Blackberry receiving a percentage of operator’s data revenue).

In any case, with operators imposing data tariffs (expected for quite some time), app developers may now need to rely on the operator more than ever. If I have a data hungry app (eg Qik), I want to sell that app with unlimited data. To include features that tell my users to curtail their usage because of data caps is a non-starter. Does this mean smartphone apps could be sold with data packages (eg when you buy Hulu later this summer on your iPhone for $10/month, it includes unlimited data?) – that’s a deal that can only be done with the operator putting them front-and-center again.

This is not a first, premium feature phone apps on operator catalogs have often been zero-rated (made data-charge free) but most feature-phone apps never consumed that much data to begin with. If the next generation services are expected to be data-heavy, it’ll be interesting to see how OEMs and operators deal with special data privileges for certain apps (ie are we returning to the walled garden?)

Author: mobileraj

Mobile!

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