It's hard to get noticed on Apple's App Store now that there are 55,000 apps jostling for attention. SingTel believes it has the solution, at least for local iPhone developers.
In return for tying up with SingTel's App Zone, which is the telco's soon-to-be-launched, platform-agnostic App Store, SingTel will provide marketing support. The cost? 30 percent of your App Store revenue.
The cost seems high as after both SingTel and Apple take their share, the developer is left with just 40 percent of total sales. Chordica developer Joash Chee believes the deal makes sense though, and has become one of the first iPhone developers to join the programme.
"The essence of being a partner is not limited to just publishing apps," says Joash. "It's really about collaborating with a considerably large and able tech and telco company. Developers with an eye only on the revenue stream can consider it like budgeting a fixed percentage of earnings to marketing. The best part is that you get the marketing without paying anything upfront. And since the amount scales in proportion to your total earnings, you can say that the marketing dollar carries its own equivalent weight.
According to Joash, under the agreement with SingTel, the developer gets 40 percent of sales unless revenue breaks $10,000. After that, the percentage becomes smaller.
IPhone developers interested in joining the programme should contact SingTel via email at g-singtelpp@singtel.com.
11 comments:
This seems like a step back into the old cost structure / value chain where the telco got 50% for putting product in their store (but not doing very much), your publisher took 25% for managing the telco relationship, and the develop got 25%. That value chain didn't work! Mobile downloads in this old model were low, the market was fragmented, and no one made any money. And developers mainly stayed away because it wasn't worth developing apps for a single telco and getting such a small portion of the resulting revenues.
I guess that you'd only sign up to this if you think that SingTel is really going to double your sales for you. I just wonder what the are going to do for that (other that just list you in their store).
I don't see the value add here.
My immediate reaction was the same. Too expensive. Won't work. Thinking it through though, I think I was being too pessimistic (and not being smart about it). As you point out, the question is simply -- will your increase in sales cover the cost of marketing?
I think that if you play your cards right, it can. The good news is that you can actually dip your toe in the water and work with SingTel on an inexpensive app that will allow you to get more visibility and then drive traffic to the App Store for your more expensive apps (that aren't in the App Zone). That is the advantage that the App Store (and possibly) Android stores have. Unlike the bad old days, you are no longer entirely hostage to the telco.
As for what SingTel can do, I've received SMSes from Singtel promoting different local iPhone apps in the past. If SingTel did more of those, it would definitely be good exposure for developers.
Joash is a smart guy. I'm sure he's thought it through!
We develop the SG apps and Singtel get to market the iPhones, with the appsolutely fantastic taglines, and sell more iPhones! If they share the revenue from selling iPhones with me, I will join them! :D :) :p
What about free apps anyway?
What about free apps? Very good question. I don't know. Ask and try!
@Junda good point there. Singtel uses local app to market iPhone. Developers get nothing from it.
Anyway, Singapore market is too small, and Singtel can only market it locally. It is not profitable in the first place to make a local app, makes less sense if SingTel takes a big bite.
I'll wait.
Download does increase when an app appears in SingTel ads, but only for 2-3 days, and not a lot if it is a paid app.
Maybe it'll be more effective if they are doing a different form of marketing than what they are doing now.
@honcheng. As @allenri points out, this deal only makes financial sense if thanks to Singtel's marketing, your sales double. Anything less and you make a loss (your marketing costs exceeds the return).
Agreed that local market is small. However, SingTel can also promote in its other markets, like Oz, via Optus. That's a consideration too.
It all boils down to what SingTel will do/is willing to do. They do have the money (see F1 sponsorship). Whether they will spend it is another matter.
It's up to SingTel to prove to developers that it's worth it to sign up with them. As @junda said, if SingTel shares its iPhone revenue with developers, they will be a long queue outside its door!
another thought is "why would an iPhone user be browsing on the SingTel AppStore anyhow"? Why would I shop or look for an app on a store that only has a very limited sub-set of Singapore-only apps on it? One of the benefits for customers (and developers) is that you get everything available in one place - both local and global content. I can't think why i would start looking for content at SingTel, rather than on AppStore.
This seems to make a lot more sense for non-IPhone apps than it does for iPhone apps. Sorry SingTel, but Apple has already done a pretty good job at disintermediating you -- and not many people miss you in this equation - especially with you taking 43% of the developer's revenue for doing not-a-lot.(43% = 30/70).
Sorry - just an additional thought here...There is a fundamenal flaw in the logic here. When this only has a few developer's signed up, they will get some advantage because they will get a high% of SingTel's marketing $ for this program. However, at this point, the SingTel appstore is pretty uninteresting to customers because the choice of apps is feeble compared to the Apple store. But once lots of developers sign up on the SingTel store, you are back to the same problem of being one app amongst a large crowd - and it is difficult to stand out again. Only this time, you're stuck back in a crowd giving away 60%, instead of 30% of your revenue.
@alleri. Good points both. It will all depend on what SingTel does. But as you point out, if the App Zone becomes very popular, you have the same problem you have with the App Store, too many apps vying for attention. If SingTel just relies on the App Zone, as a developer, you're screwed.
Maybe the solution is to get in early, use the exposure to get attention for your cheap apps, but make sure you have the ability to cross sell and up sell apps that aren't published by the App Zone.
The one consolation is that at least you don't pay any money upfront...
I am more with Jimmy here. Think of it this way - your app appeared in 2 stores, one you got 70% but never got noticed, and one you get 40% and get some marketing. As long as it is not exclusive to Singtel, this can only be good thing.
In the long run, if more people knows about your product (maybe because of Singtel), the more chances that they might get it from App Store which you keep 70%.
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