It’s finally happened, a few months ago AT&T’s CEO, Ralph de Vega was talking about how AT&T would have to eventually branch from their exclusivity from the iPhone (our blog). At this year’s CES, AT&T shocked critics with the announcement of supporting webOS devices on their network. The two webOS devices will be running on three handset manufacturers namely, Dell, HTC and Palm.
New devices for AT&T network
The focus will primarily remain on Dell and Palm. Both device manufacturers have recently entered the smartphone market with new devices clamoring for the same type of attention as the iPhone. Dell has entered the market after a long hiatus while Palm’s Pre and Pixi have been needed the endorsement of a growing network. Although already overloaded with the iPhone, it seems that the addition of the new webOS devices will add much needed diversity to the network. Although AT&T’s network has been facing issues iPhones utilizing the data bandwidth, the Palm Pre and Pixi less data hungry in comparison; a good point in comparison to the existing iPhones. The exclusivity component still remains for AT&T due to the exclusive launch of the Dell Mini 3 along with the agreement with Palm.
Network improvement
The AT&T Developer Summit re-emphasized the focus on how AT&T plans to improve their network with increased partnerships and cell phone tower construction. Ralph mentioned how quickly the mobile app market was growing and as a result there was a need to ensure a better 3G network for users.
Apple’s App Store has passed the 100,000 app mark within 16 months
Congratulations are in order for Apple; Apple’s App Store has passed the 100,000 app mark within 16 months. This is no small achievement considering that the concept of an app store along with the product life of the iPhone has been a few short years in comparison to some industry giants such as Nokia, Palm, Samsung, LG, and Sony Ericsson.
The number is milestone considering the tough review that most apps go through when submitted to Apple. With a wait time of weeks to months, Apple’s iPhone is a consumer success along with the App Store that created a massive storm of developers moving into to develop apps.
However, the competition is heating up with Google’s acquisition of specialist social media and web design companies. Clearly, the Android Marketplace seems like it will get a revamp to ensure that it can compete with the integration of iTunes-App Store. The social media will probably integrate with Google searches ensuring that the developers and Marketplace both receive webtraffic.
Secondly, Palm’s holding a conference soon in an effort to attract more customers to its webOS. Interestingly enough, Palm has a number of high-quality apps that have been developed by specialist firms already available. As mentioned previously in the blog, Fandango has its own version available for webOS, which helps build customer trust in the platform itself. The Palm Pre and Pixi will help spread the word of webOS, provided Palm markets them aggressively on Sprint’s network.
Palm WebOS Development Conference in December 2009
Working overtime to push their smartphone OS into the open market, Palm has decided to organize a conference in December 2009 in an effort to lure developers to its platform and begin developing apps to market on their Open Catalog e-commerce program. A key development of this conference will ultimately be how Palm decides to charge developers and provide a business structure acceptable to all parties concerned. Palm has stated that,
“(It) will offer developers choices for getting their applications to market, as well as a transparency into the process that will help them promote and grow their businesses.” – eWeek
Previously the apps offered at the store were free, however, realizing that the iPhone OS along with Android and RIM’s BlackBerry OS were quickly gaining ground over webOS; Palm decided to increase its marketing and get support for webOS. Currently, Palm’s store had apps for free in their app store, which was a reason for some of the excellent home-brew apps that were available to customers. Secondly, Palm’s strategic decision seems to be changing; currently the webOS was only available on the Pre and the Pixi. Unfortunately the problem with luring developers now is that the profitability factor of the Pre is compromised.
Already Apple has created a competitive situation where it has successfully captured a number of developers. By allowing developers to keep 70% of the profit margin by taking a 30% royalty along with a $99 developer fee, Apple has created a very strong incentive for developers to move to their platform – (Source). Since the success of the app along with the overall marketing push of the app is from the developer side, most of the work is done by the developer and by letting developers retain profits; they market their app themselves. Currently, Nokia, RIM, Symbian, Qualcomm all charge heavily for developers to access their OSs’ and SDKs’; in comparison to the structure offered by Apple, they are rather draconian in nature.
Apple’s commitment to quality is reflected via the total control they exercise over the submission and review of apps. Not only do they maintain a standard for apps, but similar to any licensing authority, they have the ability to screen out potentially malicious developers who could exploit the iPhone SDK and OS. In retrospect, this is probably why there have been very few security breaches on the iPhone while other developers have used financial clout to screen developers. Although in the long run, it will become difficult to screen what could be potentially millions of apps, it will at least ensure that apps available for download are safe.
Coming back to Palm, they are in a key situation where they can clearly see how draconian approaches will result in poor support for webOS or could help lure developers away from a fairly crowded market into a lucrative business venture. This is dependent on two things:
1.Palm creating a development program that provides a similar incentive to Apple’s program while streamlining the overall development process,
2.Marketing the Pre more aggressively and ensuring that consumers start to realize the full potential of the phone.
Although the Pre is exclusive to Sprint’s network, recently Verizon and Google have teamed up to launch Android compatible phones on Verizon’s network. The Pre has some serious competition now in terms of AT&T’s and iPhone alliance along with the Google-Verizon collaboration. It seems like that the Palm team is at a crossroads, a careful long-term strategic decision here can definitely change the path of the Pre and Palm’s profitability or it could doom the Pre to the depths of obscurity.
What do you think? Will Palm emulate Apple’s current market structure or will it follow the routes of RIM, Symbian and Nokia? Leave your thoughts and comments below.
Hot on the heels of the new iPhone 3GS, Palm released the Pre, another intensely anticipated phone. Within hours of it being released, the usual community of developers had already flashed the firmware and created another homebrew application scene for the Pre. Eagerly anticipating the potential growth in the applications but more importantly media support with iTunes, the Pre managed to access iTunes in a manner that Apple calls illegal, developers call questionable and consumers call “unique”. Resultantly, a slew of corporate press releases and open threats ensued between Apple and Palm.
The core issue that Apple is contesting with Palm is that the Pre accesses iTunes by mimicking the software identity of a standard iPod. Apple has openly claimed that this means is illegal. Palm’s response is that Apple’s rather draconian actions will hurt consumers overall as they will be denied a “seamless synchronization experience”. After trading many barbs and considering that former Apple employee, Jon Rubinstein, is now currently the CEO of Palm; tensions are running high. Apple’s response has been to immediately block the Pre from syncing with iTunes, while the Pre development community has refused to update iTunes and resultantly began looking for hacks to bypass the new update. (continue reading…)
