Nokia unveils changes to app developer revenues

Nokia has changed the revenue split between Nokia has changed the revenue split between applications developers and app store owner from the usual 70:30 respectively to 60:40, but says developers will take home about 40% more money.

Nokia has changed the revenue split between applications developers and app store owner from the usual 70:30 respectively to 60:40, but says developers will take home about 40% more money.

George Linardos, v-p for product marketing at Nokia, told developers at Nokia World on Tuesday the usual 70:30 split was calculated after operators subtracted their costs. Nokia was subsidising developers by taking care of part of the operators' charges with the extra 10% it took from the sale price, he said.

Fixing the network operators' take also meant developers knew up-front precisely how much money they were getting from a sale. This enabled them to plan their cash flows and make more sustainable business decisions, George Linardos said. "We estimate that developers will make about 40% more money that before," he said.

Linardos said Nokia was looking for developers who wanted to build sustainable businesses developing apps. "We don't think that getting lucky or gaming the system is a sustainable business model," he said.

He acknowledged criticism that Nokia had been slow to compete with Apple's App Store or respond to Google's support for Android developers. But the market was global, and local differences mattered hugely for developers, he said. This added complexity, which meant it took longer to built the right store.

He said Ovi Store was now the only app store to support payment via network operators' billing systems, as well as by credit card. This would make a material difference to sales in countries like Germany, where credit card penetration was only 30%, he said.

Linardos said when users were offered a choice, two-thirds preferred to pay via their operator accounts. When the facility was switched on, sales had leaped 13-fold, he said.

Referring to the recent acquisition of analytic software house Motally, Linardos said Nokia wanted to improve the amount and quality of user information available to developers. It wasn't enough simply to track downloads, he said, developers needed to see how users used their apps to understand the relationship they developed with it.

Motally would also reveal unfulfilled product searches, he said. This data pointed the way to unmet demand and potential new products.

In designing the new Ovi Store, Nokia had paid attention to small, "pixel-perfect" details, Linardos said. "Moving the 'buy now' button a few pixels had led to a 6% rise in sales because it was easier to use, he said.

Linardos also said Nokia was going to stop charging publishers for signing off their software. This was to lower the barriers for publishers and content providers in making their material available on Ovi Store.

Linardos criticised the business models adopted by Apple and Google with their stores. He said Nokia saw itself as the medium between publishers and consumers, whereas the App Store was Apple's way to sell more devices and Android drove search revenues for Google.

"Device sales are important to Nokia too, but the Ovi Store is a true media distribution business," he said. "We are in the middle of the supply chain between the publisher and the consumer."

Apps progress
 Nokia's Ovi Store has had a rough press, but it has evolved into a serious platform for software developers that see their futures in writing apps, say company executives.

The availability of apps, small software programs that run on smartphones, is what has driven the hype over Apple's iPhone and Google's Android mobile phones. Although it invented the smartphone, Nokia was seen as behind the curve because writing apps for its devices was hard, and its store was not user-friendly.

That's in the past; the juggernaut is moving, says George Linardos, v-p for product marketing at Nokia.

Since its redevelopment Ovi Store was now serving two million apps a day in 30 languages to 120 device-types via 91 operators in 190 countries. Some 85% of buyers were return purchasers who averaged 2.6 downloads each. More than 90% had bought through their local store rather than the global store.

Offscreen Technologies, an app developer, had seen 43 million downloads of a total 2,500 apps it had developed. Tunewiki had been downloaded by users in 133 countries in just three days. And a comic book publisher had achieved a distribution footprint unmatched by either Marvel Comics or DC Comics overnight.

Linardos claims he doesn't care how many apps the store hosts; what he does care about is that what's there works for people, preferably daily. "This is a proper media play," he says. "You wouldn't dream of asking a radio station how many tunes its has; you'd ask if they are playing the right ones at the right time for their audience."

So too with apps, he says.

Satellite navigation for pedestrians 
 It's hard to get lost indoors, right? Well, try finding the right meeting room at London's ExCel exhibition complex when you are in a hurry.

If only ExCel had installed the indoor location system that Nokia Labs is developing, I might have had a chance.

The system depends on a transmitter tag that broadcasts the wearer's location to receivers stored in the ceiling. The system maps your position to a stored digital map, and broadcasts your position relative to objects noted on the map, such as meeting rooms. It can also plot the most efficient route to your destination.

As you walk through the complex, it updates your location in real time. It can also broadcast your location to other receivers, such as mobile phones, allowing others to know you are on your way.

Nokia is presently piloting the system with a supermarket group. The supermarket has tagged trolleys and linked them to a shelf advertisement-serving system. For example, it suggests adding yoghurt to the trolley as it passes the milk counter.

 

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