Everyone is well aware of the vibrancy of the iPhone App Store. While there are legitimate concerns over Apple's control of what apps can be published, there is no denying the financial success of many iPhone titles. Independently developed titles, often created by individual programmers, are earning their creators as much as a quarter of a million dollars (or more). The 70/30 split, net 30 day terms and the 'meritocracy' of the App Store have been well documented.
Given this background you would expect Google to have paid attention and they have.
Taking note of the concerns about Apple's oversight of apps, Google will have no approval process for the software, creating an open content distribution system. Opening Oct. 22, initially all applications will be free. Developers can submit apps without the requirement of a business relationship with Google. It will be interesting to see if carriers will maintain a hands off approach to all free apps, given restrictions that TMobile has imposed on VOIP apps in
Germany, to cite a recent example. So the question is, what will be the policy for paid apps?
mocoNews is reporting in an article titled:
G1 Live: The Android Market Is No App Store For Better And For Worse the following:
"It will purely be an arrangement between the carrier and the mobile app developer. It is unknown what the revenue-share agreement will be between the carrier and a developer.”
Traditionally carriers have taken 45% to 50% of content transactions. T-Mobile has been quoted, in reference to it's own "App Store" for other handsets:
“A baseline for the developer’s initial cut is 50 percent, and then based on certain perimeters, it may increase to 70 percent (remember, the App store currently has an across the board 70/30 split with developers). First off, the revenue split is determined by the amount of bandwidth the applications use, but developers can boost up their percentage by abiding to a couple of rules. The first is by providing customer care through at least two access points, such as a phone number and email. Another way is by supporting at least 10 TMobile devices, two of which being the most popular in the network.”
(@CTIA: T-Mobile USA Details Dev Program; Android, Sidekick Not In Plans At Start)
Much of that isn't relevant to the Android phone, but we can assume that T-Mobile is also aware of Apple's 70/30 split.
The problem isn't just the revenue share. It's that Google, by handing off the sale of paid apps to individual carriers, have added an element of 'friction' to the entire publishing process:
With existing content sales carrier terms are typically net 60 to 90 days.
What's more if you sell in multiple territories, then you will have to deal with multiple carriers.
Also, while there is an unfettered process for free apps, paid apps will certainly be subject to a review and approval process if for no other reason for issues of insuring appropriate content. What will that approval process entail?
So has Google missed the mark here? Well, one can see some benefits here. While every iPhone customer is signed into Apple's iTunes billing system, this isn't the case with Google's phone. Billing to the customer's phone account does solve that problem.
What Google needs to do is to reduce the uncertainty facing developers by addressing some of these unknown issues; revenue share, approval process, terms of payments, etc. The carriers have never had a reputation of being easy to deal with, but given the example set by Apple there are strong incentives for them to match the deals and terms set by Apple. Still, multiple territories will require additional work compared to the single-point-of-contact Apple is providing.
The more 'low-friction' publishing opportunities there are for developers, the better. I'm sure Google recognizes the value of a vibrant market, it will be interesting to see how they addresses these issues.
