Red Zen Marketing

Belly Up To the Buffet?
Ever since the legitimization of Napster and the introduction of the Zune (put jokes back away, we're moving on), why have smartphone makers failed to see the elements of success in business models used by these adjacent markets? Now, I grant that these folks have not overturned the iTunes/iPod market share dominance, but that is not to say that the lessons to be learned could not help. Rhapsody, Napster, and the Zune all took a different approach to their market in order to compete, and it bears some examination.

Think of it as not a one-at-a-time app store, but an AppBuffet, in which owners could try out (there's a concept, Apple!) the full inventory of applications available, and simply pay a tiered monthly fee based on how many applications they leave installed after X number of days.

The iPhone AppStore has shown--through 990,XXX,000-odd app downloads to date--that there is revenue to be found from getting customers engaged in other uses for their phone than simple voice, texting and checking sports scores or news headlines. So, this shows the power of a single location, and on-phone app browsing. But there is so much potential for competitive advantage in taking on Apple by approaching the question in a different way, and moving beyond what has already been done to foster an even more thriving developer base.

Making it Happen -
What would need to be done by a device maker and carrier to create this scenario?  A few obvious things occurred to me:

1. Think about the full solution. This is what makes the iPod/iTunes/iPhone/AppStore product offering so compelling to so many. It's simple. It's integrated. Too often, third party developer support is something that is thought about far too late in the game, and rarely is the ecosystem creation, maximization of developer revenues and full business model design something that is discussed at the point of device product development. If it's true that the more developers supporting your platform, the stronger your position, there's room for competitive advantage here in taking a different tact.
2. Incorporate great categorization and search capabilities to allow customers to find solutions they would like to try out on their phone. Anyone who has struggled to find a particular application for a particular need in the iPhone AppStore understands the value of this. There are lessons to be learned from Handango.com in this respect.
   
3. Incorporate the subscription and DRM protection technology layer as a part of a systems thinking approach.  For those applications that participate in the AppBuffet, there is full control of the user sales/installation experience and the business outcomes are shared, within a Darwinian approach that rewards the best participants. Those developers whose products don't measure up will drop out based upon their business requirements. The desired uniform sales experience for customers is preserved--as provided by Apple--but a much larger number of solutions gain exposure as a result.
   
4. Build the necessary community for owners to share their experiences with apps, make their comments known, and ensure this is available on the PHONE. Excitement about a new cool phone and the things that can be done with it is the perfect reason for people to want to share their experiences with others. Heck, Amazon taught us long ago that it's a best practice to allow peer testimonials to help drive sales. Apple has completely ignored this aspect of their marketplace for some reason. There is a real opportunity to bring Social Media elements to this part of the user experience.
   

It's my expectation that a potential outcome of this approach would be a) more applications and greater variety of applications tried, b) revenue shared to a broader array of developers, making the platform more attractive for solution development, c) facilitated word-of-mouth and greater niche identification of great solutions, and d) a higher quality of applications being achieved, sooner than via other mechanisms.

What do you think?  What device maker and/or carrier would take this on? What would stand in the way?

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