BW Exclusive: Verizon Wireless: An App Store to Take On Apple

Check out the top of my BusinessWeek scoop on Verizon’s new wireless application store.

Verizon Wireless: An App Store to Take On Apple
The carrier is joining with Vodafone, Japan’s SoftBank, and China Mobile to grab a piece of the mobile-software market from the phonemakers

By Spencer E. Ante

In a move that could rattle the wireless industry, Verizon Wireless is gearing up to challenge Apple (AAPL) in the market for software applications that are downloaded to cell phones. Verizon, the top U.S. wireless operator, plans to preview its software store on July 28 and is pouring substantial resources into the effort. But it will be a struggle to catch up to Apple, which has built broad support among software developers and customers in the year since it launched its App Store.

Software apps are all the rage in wireless these days. Customers are flocking to devices such as the iPhone that offer myriad programs, and developers are cooking up software to meet the demand. You can use an iPhone to look for jobs, read golf greens, tune into digital radio, or play games. Juniper Research estimates sales of mobile applications could hit $25 billion in 2014, up from $5 billion this year.

What’s yet to be decided is who will control this market. Wireless carriers have long been the gatekeepers for what people do with their phones. But phonemakers, led by Apple and Research In Motion (RIMM), have grabbed an early lead by creating software stores that are easy for customers to use and profitable for developers. Apple says 100,000 developers have created more than 65,000 iPhone applications so far, and customers have downloaded those applications more than 1.5 billion times. “It is going to be very hard for others to catch up,” boasted Apple CEO Steve Jobs in a July 14 press release.

To get into the game, Verizon is crafting a strategy that’s more open and global than it has ever used in the past. It is teaming up with Vodafone (VOD), Japan’s SoftBank, and China Mobile (CHL) to create a common software foundation. Developers will be able to write applications for the standard, which the carriers are calling the Joint Innovation Lab (JIL). When the store launches in the fall, it could reach as many as 1 billion customers, the combined total for the four operators. “I am not here to bash anybody, but if I could write one application that could touch every iPhone customer or one billion customers, who am I going to write for?” says Verizon Wireless CEO Lowell McAdam.

Click here to read the rest of the story, along with a video.

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2 Responses to “BW Exclusive: Verizon Wireless: An App Store to Take On Apple”

  1. Joseph Engo Says:

    LOL! What we are witnessing is an epic fail in the making. Good luck!

  2. Spencer Ante Says:

    That could very well be Joseph. As my story suggests the odds are stacked against the telcos. But you have to take their effort seriously given their clout and reach.

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