Summary:

Nokia (NYSE: NOK) is bringing in-app purchasing and advertising to apps downloaded from its Ovi Store, as the handset maker tries to increas…

Nokia N8

Nokia (NYSE: NOK) is bringing in-app purchasing and advertising to apps downloaded from its Ovi Store, as the handset maker tries to increase revenue to developers and itself from the apps craze.

It also says it will itself absorb the cost developers usually incur for “signing” submitted apps.

In-app purchasing could be used to buy game levels or news subscriptions and will start with a closed beta, with add-on birds available to buy in the Angry Birds game.

Nokia says it will also bring an ad platform to Ovi Store apps, giving developers an analytics dashboard to check performance. Nokia’s Navteq will be the primary partner selling display and location-aware ads. Again, this will be in closed beta.

“Yes, in-app purchases is (just) table stakes in the app store stakes,” Nokia’s media VP George Lindaros told Nokia World in London on Tuesday. “But what’s not is — our in-app purchasing will be integrated with our operator billing. Nobody else in the world can do this — our competition is not there. This is an incredible opportunity for our publishers to make money.”

Ovi Store was already allowing app customers to pay via their mobile bills in up to 91 countries, Lindaros said. It is the chosen payment method in two out of three Ovi app downloads, ahead of debit/credit cards: “We see a 13x increase in transactions by enabling operator billing — it dramatically improves the revenue opportunity in all these markets.”

Publishers will get the lion’s share of a 70/30 revenue split. With Nokia no longer taking a credit card fee, developer payments will go up, Nokia says. “On average, it’s 50 percent more revenue to publishers,” Nokia’s director of media product marketing Scott Jensen told delegates. “If you saw $1 before, now it will be $1.50.”

Rival app stores lack the ability for carriers to bill for app downloads. “You’ve probably heard from some of our competitors that operator building is coming — but this is where we are today,” Jensen said, showing an example of buying a $9.99, one-year subscription to a fictional news app.

With the likes of Apple (NSDQ: AAPL) pressing ahead in mobile app advertising via its iAds service, Nokia will make its in-app ads programme, which will include a performance analytics dashboard, will be available on an invite-only basis to Qt and WRT developers. “The market is accelerating — we need to step up and keep pace — we want our partners to do the same,” Jensen said.

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