Updated: T-Mobile USA Will Ditch The Traditional Deck To Mirror Apple's App Store
Monday, August 11, 2008; 2:00 AM
Starting this fall, T-Mobile USA will take the extraordinary step of ditching its traditional deck on the phone and replacing it with a platform that's open to almost any developer, multiple sources have told us. Think of *Apple's* App store, but for the entire carrier's handset line-up from smartphone to feature phone. As one developer, who was briefed on the matter, said: "The App store was a big deal, but that's one phone. This is an entire carrier." In other words, we are talking about T-Mobile's 31.5 million subscribers today vs. the 10 million iPhones Apple ( NSDQ: AAPL) expects to sell by year-end (granted, the iPhone users tend to be more engaged as early adopters). The impact of this move by T-Mobile could set off a wave of changes in the industry, as other carriers feel pressure to offer new applications on their networks. Clearly, for this to happen, T-Mobile will have to follow through on its promises to encourage developers to participate. We are waiting for a statement from T-Mobile and will update when we have it.
Here's the details: Developers will submit their applications online; the revenue-share agreement will be based on how much the application uses the network; and the applications will be presented to the user in order of popularity, not according to T-Mobile's preferences. It's all pretty straightforward, but the more interesting aspect is that this will apply to all the carrier's platforms from upcoming Android to Java to Sidekick and Windows Mobile. And, when it comes to revenues, it will be almost as easy as Apple's 30-70 split. T-Mobile will take a percentage of revenues based on bandwidth, so if it's a streaming video application, it will take more. Still, one developer called the baseline "very generous." Right now, there's not many details on the certification process, which will be the most important aspect. If developers have to jump through a lot of hoops, the system won't be truly open. It's also unclear how free apps will be handled (for instance, Apple doesn't take a cut in that circumstance).
Lots more after the jump?
Stacking up to the competition: Over the last year, AT&T ( NYSE: T) and Verizon Wireless ( NYSE: VZ) have said they are committed to being open, but has done little to back it up. At the same time, T-Mobile has been quietly been building up infrastructure of its own, starting with a Web site launched here. It also recently partnered with Device Anywhere, which allows developers to rent lab time to test applications on the T-Mobile network. And, it alludes on the site to upcoming changes. It says in addition to submitting applications through an aggregator or directly to a T-Mobile manager, it says: "In the coming weeks, T-Mobile will be offering new ways to go to market." It also gets credit for being one of the first carriers to join Google's ( NSDQ: GOOG) Open Handset Alliance to support the Android operating system, which is also expected to give developers a more direct path to subscribers. T-Mobile is expected to launch an Android handset this year.
T-Mobile needs a gimmick: As the fourth largest carrier, T-Mobile's continued to add subscribers year-on-year, but is behind in launching 3G and is losing subscribers to AT&T as people flock to the iPhone. The weakness is starting to show. In Q2, T-Mobile USA added 668,000 net subscribers, a 22.1 percent drop from the 857,000 added a year ago, which at the time was described as low.
Updated T-Mobile declined to comment on specifics, but issued this statement from Venetia Espinoza, T-Mobile's director of Mobile Applications and Partner Programs: "T-Mobile is working with the industry to foster an open wireless services platform which will provide developers with the tools and information they need to make new, innovative experiences available to T-Mobile's more than 31.5M customers. The devPartner Community site, which is in its alpha stage, is just a taste of what T-Mobile has in store and we encourage you to stay tuned for more details in the coming weeks."