Vodafone Announces App Store

Vodafone aims to outdo rivals in mobile-phone applications by spurring creation of software downloads that can be charged to customers' bills

By Kerry Capell

On May 12, Vodafone (VOD) unveiled plans to launch an online mobile applications store that will let the network operator's customers around the world easily download a rich assortment of software programs onto their cell phones. By joining the ranks of other companies such as Apple (AAPL), Nokia (NOK), and BlackBerry maker Research In Motion (RIMM) that have also launched "app stores," Vodafone is aiming to stay in the game—and to best rivals with distinctive features.

Starting this summer, Vodafone—the world's top mobile service provider by revenues—will release to outside developers a software toolkit that lets them write programs for the Vodafone app store. By yearend, apps will be available for download in eight European countries: Britain, Germany, Greece, Ireland, Italy, the Netherlands, Portugal, and Spain. The service eventually will be available to all 289 million Vodafone customers in the 27 countries where the company operates, and later could be offered through some of Vodafone's 40 worldwide network partners, potentially including Verizon Wireless in the U.S., of which it is half-owner.

Vodaphone's Advantage: Geo-Targeting

Vodafone is just the latest entrant in the race to grab a piece of the fast-growing market for mobile phone apps, which range from nifty little utilities and games to blogging tools and online shopping services. Since the debut of Apple's wildly popular App Store in July 2008, rivals have piled into the business, including handset makers Nokia, RIM, and Palm (PALM); mobile operators such as France's Telecom's (FTE) Orange unit; and software companies Google (GOOG) and Microsoft (MSFT).

British-based Vodafone claims that its big advantage over handset and software company rivals will be its ownership and control of the mobile network. Unlike app-store providers such as Nokia or Apple, that means Vodafone will be able to pinpoint the whereabouts of customers when they're using programs on their phones, which should allow developers to create apps keyed to geography. A longtime holy grail in the mobile industry, such "location-based" services could open up a wide range of innovative new wireless Internet capabilities.

Third-party software developers are likely to welcome Vodafone's support for geo-targeting. Indeed, many have complained that one of the biggest obstacles to creating groundbreaking mobile apps is that operators usually keep tight control over information about subscriber location. "All the mobile operators have talked about the need to avoid becoming the 'dumb pipe' to the Internet," says John Delaney, research director at IDC Europe. "But Vodafone has consistently put its money where its mouth is."

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