What Verizon’s planned proprietary app store tells us about the iPhone switching carriers

Tue, Jul 21, 2009

Analysis, News

Last week, Verizon announced plans to leverage its position as the top US carrier and enter the online app business by building a Verizon app store for mobile phones.  It’s even holding a Verizon Developer Community Conference later this month to promote its new endeavor.

But Verizon has been on the receiving end of a lot of bad press because phones on the Verizon network will only come equipped with default access to Verizon’s app store.  This means that BlackBerry owners on Verizon, for example, will have to pro-actively go ahead and download the BlackBerry World app store onto their device.

Could this be any more confusing for Verizon customers?  Two app stores on their phones?  Seems like the CEO of Verizon is probably wearing a pair of “bad idea jeans.”

What this tells us about bringing the iPhone over to Verizon

While the iTunes App Store surges past 65,000 apps and 1.5 billion downloads, the rest of the market is fragmented as everyone else is struggling just to remain relevant.  The Palm Pre has an app store, BlackBerry phones have an app store, Windows Mobile phones have an app store, Nokia phones have an app store, and now Verizon will have an app store as well.  If you’re a developer, would you even take a look at those other app stores?

Verizon’s attempt to leverage its 70 million strong subscriber base as a means to make a quick money grab in the burgeoning mobile app store market seems to imply that Verizon lacks the ability to see the big picture.  Instead, the thought of emulating Apple’s app store success has Verizon seeing dollar signs that in the long run, it’ll realize, are just mirages.

By now it’s well known that when Apple was shopping around the iPhone, its first choice for a mobile carrier wasn’t AT&T, but Verizon.  Verizon subsequently didn’t want to hop into bed with Apple because they weren’t comfortable with the amount of control demanded by Apple.  Apple, of course, prefers to do things its own way, everybody else be damned, and it now seems that Verizon operates under the same principle.

Agreeing to Apple’s terms and conditions to sell the iPhone 2 years ago was undoubtedly a risky proposition for Verizon.  After all, why would they bend over for Apple when there was no way to predict just how successful a product the iPhone would be.  Famously, it’s been reported that AT&T executives never even saw the iPhone until Steve Jobs unveiled it to the public at Macworld 2007.

But now that the iPhone is an unqualified hit, consumers fed up with AT&T are praying that the iPhone will soon find its way over to Verizon’s more reliable network.  The problem is that Apple will once again demand strong concessions from Verizon such as high subsidies and complete control over the product (i.e no Verizon app store, no Verizon logo on the iPhone).

Verizon would have a lot to gain by striking a deal with Apple, but its recent announcement of a proprietary app store leaves us wondering if landing the iPhone is even on its radar.

FastCompany hits the nail on the head when it writes:

This is Verizon clinging on to an old business model, one where networks dictated the user experience and the handset software coming from their phone manufacturers. By launching its own app store, the company’s desperately clawing at the idea of making money from selling apps, and keeping control of the situation. But times have changed–smartphones are now so powerful that it’s the phone itself that rules the roost… And, speaking of the iPhone, is this move an indication [that] Verizon’s never going to sell iPhones?

That might very well be the case.


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4 Comments For This Post

  1. DRayMIS Says:

    One has to wonder how Verizon’s app store is going to work considering how many different phones they carry, each with it’s own unique hardware specs & OS.

    How the heck do they begin to narrow down for the consumer what apps will run on what phones?

    This is challenging for even for the most recent smart phones, are they going to have a section each for the Blackberry Storm (v1 & 2), Palm Pre (when Sprint’s exclusive deal runs out next year)?

  2. Anonymous Says:

    Verizon has proven they are the number one carrier in every angle with out one phone, but with several phones for different people. Its all about their strong network, and from what i am hearing they will get the iphone, which will give att no chance at all.

  3. Martin Hill Says:

    Do you really think that Verizon with its dreadful history of disabling features such as Wifi, Bluetooth and GPS on phones it sells in order to force customers to pay through the nose for crappy Verizon versions of the same will cede that level of control to Apple? The iPhone demands the Carrier be a dumb pipe but Verizon is still stuck in the AOL-style walled-garden past and will be loathe to let Apple do it’s thing.

    Then there is the problem with the old CDMA tech that Verizon uses (LTE is still several years away) which is different to the rest of the civilised world and which doesn’t even let you browse the web or receive email or do anything else on the internet when you are on a call. So much for looking up info while talking to someone hands-free on the phone.

    No, I can’t see it being an easy marriage.


  4. J Says:

    LTE is hardly “several years away” and I don’t ever remember a time with integrated hardware features such as WiFi, Bluetooth, or GPS have been disabled on any Verizon phone I’ve purchased and I’ve been a Verizon customer since they appeared in the midwest. Regardless of what they may or may not have done in the past they do make good business choices and getting the iPhone is a good thing, not just for thier customer base either.

    As far as the app store goes, i don’t see having 2 app stores as being confusing. People buying smart phones aren’t idiots, they can read icons and make decisions for themselves, if they couldn’t then app stores wouldn’t be successful because people wouldn’t know what to do with all those icons on their screen. When it comes to a single app store for multiple platforms, that would seem easy enough. The software on each phone has a unique identifier that the app store can pull from the phone over the network, and based on that it can present options for available/compatible software.

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