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Before and after the App Store: The changing fortunes of mobile operators

Digital content and applications have long been in mobile operators’ sights and its ecosystem is still an important element in operators’ m-payment strategies. However, the ways in which they address the content opportunity differ significantly and depend on various country-specific factors, such as smartphone penetration, iPhone penetration and availability of local content, according to Pyramid’s upcoming report From Digital Content to M-Wallets: M-Payment Strategies for Operators.

Prior to Apple’s launch of the iPhone and then the App Store, mobile content was generally distributed through a mobile operator portal, and the operators’ control over the value chain enabled them to gain very large shares of the revenue, typically 50 percent or more. They would either aggregate the content themselves or work with specialist aggregators to offer ringtones, games and information services. The mobile application market was then blown open with the launch of Apple’s App Store, and its unique model of taking a 30 percent cut and insisting on payment through a debit or credit card continues to shape the industry nearly five years on.

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