App Stores: A Handmark perspective

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With all the coverage of recently launched manufacturer’s application stores it’s easy to forget that there have been several companies working in the application store space for a number of years. AAS talks to Eric Pfeifer, Content Acquisition Director at Handmark to find out what an independent aggregator has to offer.

Handmark has been in business for around 9 years and currently employs about 190 staff. The company started out creating its own content for Palm PDAs and sold its titles through retail outlets. Predominantly a games developer, the company broadened to online channels when it introduced Pocket Express, an application that provided infotainment, news, and mobile information while also acting as storefront for Handmark’s own software. Pocket Express has over two million active users, mainly in North America. Handmark then added third-party content to the Pocket Express channel, eventually broadening out to offer storefronts for operators and OEMs, at the same time as it expanded its activities outside the US. Today Handmark operates stores for the likes of Sprint, Telus, Alltel, and the Orange UK games channel.

Richard: Application and content stores are all the rage at the moment, with manufacturers offering high profile channels. How is this affecting your business?

Eric: For a company like ours, that has been operating mobile content stores for several years, it’s interesting to hear so many commentators talking about the birth of application stores. We prefer to think of it as the start of the second stage in content store growth. It’s certainly driving demand for stores from both manufacturers and operators. The main change, from my perspective, is that manufacturers now see these stores as an opportunity to sell more handsets and this is definitely changing the game.

Handmark is well positioned to take advantage of this growth. OEMs are good at handset development, but application shops are not something they've been in the business of doing, but we have. As more manufacturers consider opening application shops, they are coming to us because we have the experience and expertise in the processes and functions needed to run a shop: content QA and support, product descriptions, billing, e-commerce, refunds, and alike.

Of course these new shops also provide us with a distribution option, as we still develop our own content through Handmark Studios and under the Astraware brand. So, even if we're not involved in the storefront, they are creating opportunities for us. Because we develop our content cross-platform, we are also able to take advantage of almost every store.

Richard: Do you think Handmark offers any special value to developers, compared to the high profile stores?

Eric: One of the key benefits developers can realise when working with us is that we can help them get into multiple channels, the channels we manage. We remove the complexity of developers having to deal with the varying requirements for things such as content presentation, preview image sizes, and signing requirements. We believe this aggregation of channels, not just aggregation of content into one channel, makes it much easier for developers to go to market. They can come to Handmark and do all the setup work for several major operator and manufacturer stores just once. We also provide additional value from the strong relationships we have with manufacturers and operators. This means a developer has the opportunity to work with Handmark to obtain better placement within various stores, early access to device specifications, additional APIs, information on testing requirements, and support from our QA among others.

Richard: How do developers find out which channels you are supporting?

Eric: When a developer approaches us with content, one of the first things we will do is talk to them about the channels that are suitable for their content. We don’t however publicly disclose details of all the channels we manage.

If a developer should enter through one of our managed channels, without knowing its Handmark behind the store, we will also make them aware of the other opportunities we offer.

Richard: One of the big gripes from developers has always been the revenue split. Are you seeing any trends across the stores you manage?

Eric: We are seeing a general trend towards providing developers with a greater share of revenue, however the nature of the revenue split depends an awful lot on the billing mechanism. You can see shops offering PayPal giving developers 80% of revenue. Where credit card billing is used 70% is most common. However, the most effective payment method for conversion to sales remains operator billing. The splits for operator billing can be anywhere between 40% and 70% of revenue. But we know, from channels where we have activated operator billing, there is a four to five fold increase in the volume of application sales. So, while there is a larger revenue share taken by the operator, developers will more than make it up on the volume.

Richard: You mentioned earlier that Handmark helps with signing and testing requirements, what does this entail?

Eric: Firstly, we know which channels require signing and which don't. We can help developers find channels even if they have a reluctance to consider getting their application Symbian Signed. However, we are finding that most channels want to avoid that installation warning message, but Express Signing is sufficient in most cases and much more accessible and cost efficient than the original program. If a developer approaches us early enough we can help by QAing their application and offering advice on changes they should make to ensure their application is signed first time. This can result in a considerable saving for developers in both time and money, by reducing the need to resubmit software for signing.

Richard: Do you offer this QA to all developers?

Eric: Our policy is to QA every piece of content that comes through the door. We believe this is an important differentiator: Handmark may not necessarily offer the most content items in our managed stores, but we will provide the highest quality content. So you won’t see five or ten poker games in our stores, but the top two or three.

We believe this gives the user a much better experience, not having to wade through hundreds of similar items, and is much more likely to result in sales. Another advantage is that developers of niche or unusual applications are far more likely have their application discovered, downloaded, and purchased in one of our channels, compared to cluttered ‘open’ stores.

Richard: Does this mean developers would do best to avoid bringing you applications where there are already a number of competitive products?

Eric: No, but it does mean they need to do their market research before starting development, to determine what features consumers want and which of those features are missing from existing offerings. As a general point, I would encourage any developer to research the marketplace before embarking on their development. There is already a lot of mobile content out there and any newcomer needs to ensure they either deliver something new or something that goes well beyond the features and functions of any similar applications.

Richard: From the point of view of what’s new and in demand, what trends are you seeing?

Eric: Social networking is on fire right now and one of the strong growth areas. Some recent statistics suggested that almost a quarter of mobile web traffic was associated with social networking. I would recommend every developer should consider what social networking features they can incorporate into their applications. Social networking features also have a knock on marketing effect too, if the user is updating their Facebook or MySpace accounts using a mobile application that fact can be seen by other network users.

We are also doing more and more on S60 and have new manufacturer storefronts, which will be demanding Symbian content, in the pipeline. Another area we expect to see growing is native Symbian games: games that can make full use of the device features. While most games to date have been delivered in Java we're seeing something of a push to native applications and I’m expecting some stores to be looking exclusively to these high end native games.