Up until recently, AT&T was the exclusive carrier for the Apple iPhone in the USA. During that three-year period, AT&T didn’t have a bad word to say about Apple. However, it now looks like things have changed.
Speaking at MWC 2011, AT&T’s CEO Randall Stephenson criticized both Apple’s App Store and Google’s Android Market, claiming they are bad for consumers. He suggested that we should have a system where carriers sell the apps to customers.
You purchase an app for one operating system, and if you want it on another device or platform, you have to buy it again. That’s not how our customers expect to experience this environment.
The Economics Behind App Stores
AT&T’s stance on app distribution is not just about consumer convenience; it is also deeply rooted in economics. When apps are sold through Apple’s App Store or Google’s Play Store, these companies take a significant cut of the revenue—typically around 30%. This means that for every dollar spent on an app, only 70 cents go to the developer, while the rest goes to the platform owner. If carriers like AT&T were to sell apps directly, they could potentially take a slice of this lucrative pie.
For instance, if AT&T were to implement their own app store, they could negotiate different revenue-sharing agreements with developers, potentially offering better terms. This could attract more developers to their platform, thereby increasing their app offerings and, consequently, their revenue. However, this would also fragment the app market further, making it more complicated for consumers to find and purchase apps.
Consumer Experience and Market Fragmentation
One of the main criticisms of having multiple app stores is the potential for market fragmentation. Currently, consumers enjoy a relatively seamless experience when purchasing apps from a centralized store like Apple’s App Store or Google Play. Introducing carrier-specific app stores could complicate this process. For example, a consumer might find an app available on AT&T’s store but not on Verizon’s, leading to confusion and frustration.
Moreover, the current model allows for a unified update and support system. When an app is updated, it is pushed through the same platform, ensuring that all users receive the update simultaneously. Carrier-specific stores could disrupt this uniformity, leading to delays in updates and inconsistent user experiences.
AT&T’s argument that consumers should not have to repurchase apps for different platforms is valid to some extent. However, this issue is already being addressed by many developers who offer cross-platform licenses or cloud-based services that work across multiple devices. For example, popular apps like Spotify and Netflix allow users to access their services on various platforms without additional charges.
I guess AT&T would like all apps on their network to be purchased through their own store. Of course, they would take a percentage of the sales, and this is probably what is behind AT&T’s statement. Rather than thinking of consumers, they are likely considering the millions of dollars a year in revenue they are missing out on.
Have a look at our article on Android vs iPhone to see which smartphone and mobile platform is best for you.
via TFTS
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