On Tuesday, BlackBerry owners were able to start buying and downloading applications after Research In Motion launched its highly anticipated application storefront. Immediately after, the handset-maker started making 20 percent of each transaction, while developers got the remaining 80 percent. The carriers? Nothing. Zilch. Nada.
The proliferation of app stores are coming into direct competition with one of the carrier’s largest business — selling content. While some of the storefronts choose to share revenues with the carriers, like Google’s Android Market, others like Blackberry and iTunes don’t use the carrier’s billing systems — and therefore don’t have to share the revenues. For instance, BlackBerry uses PayPal. At CTIA, I was able to ask AT&T (NYSE: T) and Verizon Wireless (NYSE: VZ) whether they viewed the app stores as a threat. Both carriers essentially waived it off, and hinted that carrier billing may be coming.
Verizon Wireless: Ryan Hughes, vp of business development, partnerships and innovation for Verizon Wireless: Are app stores a threat? “No, although some could be. It depends on what degree they live on an island.” He said if the handset maker is not open to carrier participation, and keeps all the revenues, then yes, it could be. But carrier billing is easier, and therefore “those conversations are taking place.” At the same time, he said “we aren’t going to force RIM (NSDQ: RIMM) to re-architect the store. That’s counter to everyone’s interest to make them do things.” He said what they are interested in is not only attracting developers to the Blackberry platform, but attracting developers specifically to BlackBerry phones sold by Verizon.
AT&T: Ted Woodbery: Are app stores a threat? “Not at all…We want to support our partners…Part of why we are successful is that we sell these devices.” In a Q&A following AT&T’s press conference, I asked whether AT&T would integrate billing into app stores, such as BlackBerry’s App World. David Christopher, AT&T’s chief marketing officer: “They are major partners of ours. We want them to be successful. We want to participate. We think carrier billing is extremely important and we think it adds a lot of value.”
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