A number of companies including Truphone, iSkoot, mig33, Fring, Eqo have all built mobile applications with the intention of providing low-cost calls to their users. Now, margins on that business model are shrinking, and pressures to make money are growing. So the question is: How can those guys leverage their install base and technology to find new revenue models?
Truphone and iSkoot show us two possible approaches. From a recent GigaOm post called Mobile VoIP Startups Looking Beyond Cheap Calls:
By supporting Skype, Twitter and other communications services, Truphone is hoping to become the default (or at least the most used) communication application on the iPhone, which would allow it to generate more call-out minutes and also open up other e-commerce opportunities…
[iSkoot’s] funds are to be used to develop a new platform for AT&T that would allow Ma Bell to offer iSkoot’s myriad services to its customers…
I commented on the post that this is essentially a race to become a next generation “WAP store” for the carrier and at the same time, an answer to Apple’s AppStore.
AppStore showed us how compelling it is when you can discover, download and play apps from your device. Carriers have seen how much it lifts their data usage (iPhone trippled AT&T’s data traffic) and they already know how profitable it can be to take a cut of apps and digital goods (they made a fortune off of ringtones).
So the carriers that don’t have the iPhone want something similar for their flagship phones. And all carriers want to extend this concept to their lower priced phones.
But the AppStore experience that Apple delivers is a combination of a mobile client and a desktop client (iTunes) and that’s a lot of software to write. Carriers can’t build credible alternatives because they simply don’t have the development skills in-house, so answer is to bring in a 3rd party that has a system where games, chat, digital goods can be delivered to feature phones with a good user experience.
It’s not how high the wall, it’s how green is your garden?
In a related post, GigaOm said: “I wouldn’t be surprised if [carriers] use technologies like iSkoot to create a new walled garden, though one with a perception of openness.”
Agreed, but hey, AppStore is a “walled garden” too: They decide who gets in and doesn’t and they take a cut of all sales. Walls aren’t simply open or closed — it’s all about the nuances. Some amount of wall (e.g. limiting malicious or buggy apps) benefits the consumer and makes the garden greener. So far, developers have voted loudly that they are happy to deal with Apple’s walls to get into the iPhone garden.
Blackberry Desktop Manager vs iTunes
I also mentioned in my comment that “Blackberry can’t make an AppStore either… comparing Blackberry’s Desktop Manager to iTunes is like comparing Notepad to Word” which drew some criticism from my twitter friends. I didn’t mean that as an insult. After all, Notepad is an excellent text editor. But Word’s proprietary format and extensive features gave Microsoft monopoly status over office applications whereas Notepad is easily replacable by any text editor.
Similarly, iTunes is the hub for a user’s music, movies and podcasts, and the most popular store for online music (by far). It gave Apple a huge advantage in introducing mobile applications to the user because iTunes is a “key app” for Mac users and iPhone users. Blackberry’s Desktop manager does a good job of syncing calendars and contacts, but at the end of the day, it’s mainly something that sits in the system tray and doesn’t get attention until something goes wrong.
The search is still on
Apple has shown the way that a mobile store should work. But it’s limited to their (admittedly awesome) hardware. The search is still on for the how that experience can be brought to other phones, especially lower-end models.
iSkoot have the robust ability to route your Skype calls over the voice channel that your Skype calls sound matches the quality of your normal phone calls. This is the reason why i like it most.