Verizon Pitches New VCast App Store to Devs

Carrier billing, network APIs and the marketing muscle of its Web portal are among the highlights for mobile app makers that Verizon announced at its first developer conference being held today.

Dubbed the VCast App Store and slated to open in Q4, Verizon (NYSE: VZ) courted the coding community by putting forth its agenda for creating a mobile app storefront, emphasizing marketing, support and protocol plans it believes are more open and reciprocal than “the competition” (which surely includes Apple’s market-leading iPhone App Store).

In the past, mobile operators traditionally tightly controlled developers access to their network and software, and offered a limited selection of apps in their stores, but Verizon wants to break way from that model.

“Our future success is no longer to be ours, inside the walled garden. Our success is tied to you in the room, and you watching on the Internet today,” said Verizon President and CEO Lowell McAdam.

The VCast store will join a crowded field — Apple’s (NASDAQ: AAPL) pioneered a consumer phenomenon in mobile applications with its App Store, and was followed by Google’s (NASDAQ: GOOG) Android Market, Research In Motion’s (NASDAQ: RIMM) BlackBerry App World, and Microsoft’s (NASDAQ: MSFT) store due out later this year for Windows Mobile.

Yet Verizon believes it will entice developers by waiving fees for developer registration and for app testing and certification. It will also open “innovation centers” on both coasts with dedicated support teams to keep dialogue open between developers and key Verizon staff.

Verizon reiterated it plans to stay out of the developer language business while providing a 14-day approval process from submission to publish date. It will also offer carrier billing, considered to lower obstacles to purchase because charges show up on a user’s wireless bill as opposed to using a credit card online.

John Sutton, chief marketing officer for Verizon, warmed the crowd up by announcing developers would get 70 percent of revenue, and received cheers and applause, though that’s standard in the industry with only RIM offering an 80-20 split.

He said Verizon customers will be able to purchase the apps on their devices, as well as on its Web portal,, to bring a ready-made audience to mobile applications at the store.

“The Verizon Web presence is substantial, is the twenty-sixth most-visited site, with 60 million users, half of which come to the site every month, so there’s lots of visibility, you don’t have to create it, we’ll have ratings, reviews. There’ll be fusion between devices and the Web site,” said Sutton.

Next page: Opening the network for innovation

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Kyle Malady, vice president of product development and integration, said Verizon will open its network to developers to spur innovation.

“In the past, we locked it down, sometimes to our detriment…Our goal today is simply to open relevant network functions to allow developers to (do their job) and to foster the development of innovative applications,” Malady said.

Verizon and RIM, happy together

RIM CEO Jim Balsillie put to rest any fears that the BlackBerry maker would balk at Verizon’s app store being the only one pre-loaded on future handsets it sells.

Balsillie, citing how smartphones have grown from single-digits to 40 to 50 percent of its product mix in the past few years, wholeheartedly threw support behind the VCast App Store, saying it will work in conjunction with the BlackBerry App World.

He said that RIM realizes more download activity on Verizon than on any of its 500 networks worldwide, and views Verizon’s app store as another “channel” for delivering BlackBerry apps.

In what was perhaps a veiled jab at Apple’s boasts of over a billion and a half downloads and over 60,000 iPhone apps, Balsillie said quality and “stickiness” is what matters when it comes to being successful.

“I’m into stickiness, substance. Titillation is just phase one, we’re about richer substance, not having 30 or 40 downloads from someone who never uses them again,” Balsillie said. “The benchmark is stickiness, whether the app is free or not free, there’s always a business model in these things so there’s really no such thing as free, but that’s O.K. I’d rather have 1,000 people love me than have 100,000 like me because you can build a business on love.”

Verizon also promoted its membership in the nascent industry consortium, the Joint Innovation Lab, created to develop a single development platform for mobile widgets. Members include China Mobile, Vodafone and SoftBank, and Verizon signed on earlier this year. The organization works with other standards groups such as the Open Mobile Terminal Platform and OneAPI.

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