Posted by: Olga Kharif on September 18, 2008
T-Mobile USA just announced the financial terms that will govern its new developer’s program. Applications submitted through the program will be featured in an app store, due to come online in the fourth quarter. But developers can already use T-Mobile’s special revenue calculator to figure out how much money they will earn.
We already know that all developers of paid applications featured in the store will get a cut of at least 50% of the apps’ sales price. But this cut may rise to up to 70% if the developers meet four conditions:
1. They adapt each application for use with at least 10 T-Mobile devices, including two best-sellers.
2. They offer customer care. Developers have to provide ways for consumers to contact them via the Web, e-mail or phone. If T-Mobile receives what it deems an excessive number of customer care calls concerning a certain application, its developer may be penalized as well.
3. Developers have to follow T-Mobile's content protection guidelines, which extend well beyond industry-standard.
4. The new app has to encourage use of the T-Mobile network.
Of all these points, I consider the second and the fourth to be the most significant and game-changing. Let's first talk about customer care. Today, whenever users run into a problem with their mobile phone, they call their carrier. But T-Mobile is attempting to train consumers to call the developer, instead. And why not? If the Word program on your PC stops working, you call Microsoft, not your Internet service provider. If this same approach takes off in mobile, it has the potential to reduce T-Mobile's customer care costs associated with applications.
Now, let's look at condition No. 4. T-Mobile wants developers to create apps that encourage customers to use its network in profitable ways. That makes a lot of sense. If a social-networking app encourages me to make more calls, I may purchase a wireless plan with more minutes. If an app requires heavy use of SMS, I may purchase a texting monthly plan. Again, a smart move by T-Mobile's team heading this effort, Venetia Espinoza and Ian McKerlich.
I think other carriers need to follow suit and start giving their developers more guidance and incentives, so the programmers create more applications and services that are profitable for the carriers involved.