The relationship between carriers and app developers is an evolving one. Carriers have increasingly opened up their APIs to developers – even if a developer is offering an application that overlaps with a carrier’s feature. The trend is prominent in the rapidly growing family safety application market, where several startup developers have built apps that overlap with services from AT&T, Sprint and Verizon. However, when taking a closer look, there are many positives for the carriers. So what are those positives? And, just what does the future hold for the relationship between carriers and app developers?
App developers help carriers sell smart phones and data plans
Let’s take a look at the market from the carrier’s perspective. A carrier’s main focus is not making the “hottest” application; carriers are more interested in selling smart phones and data plans. Mobile applications, and more specifically location-based services (LBS) applications, are a strong reason to upgrade to smart phones. Because LBS require smart phones to operate, this in turn increases revenue for carriers through data plans. While carriers may not focus on creating applications themselves, they still need to satisfy the significantly large portion of the population that is interested in having the best applications in order to stay competitive. It is the emergence of the next big application that can make smart phones relevant for the non-tech savvy consumer – which in the end benefits carriers with an increase to their bottom line.
For example, my company, Life360, provides a family safety application that utilizes the geolocation capabilities of smart phones, and has benefited from promotions with various carriers. In fact, our users have told us about sales people at Verizon retail stores using our app as an incentive for parents to upgrade their entire family to smart phones. This helps carriers like Verizon sell more high-cost plans, while app developers also get the benefit of increased adoption. It’s a win-win for everyone.
Carriers in action
Carriers are already placing tremendous value on the relationship with app developers. Again, Verizon is just one of the carriers doing so. The nationwide provider has opened up several of its APIs to developers, making it easier for them to create applications using the subscriber’s location as part of their service. Not only does this demonstrate the value in the carrier and app developer relationship, but it also shows that carriers understand the developer perspective, and are willing to work closely with them in order to be successful.
As you can see, carriers are moving away from viewing data as something that must be stonewalled. Rather, they are opening up their data to developers to use in compelling and responsible ways with applications. Everyone benefits, particularly the carriers – they are opening up the opportunity to become more profitable through their data without having to expend the resources of creating applications themselves.
Nurturing the carrier-developer relationship
As the relationship between carriers and developers becomes increasingly important for the mobile industry, both sides will need to take steps to nurture the dynamic – and we’re optimistic about the future.
As an app developer, we support the notion that carriers should continue to take advantage of the growing market by opening up their APIs and becoming more accessible. Developers should understand that this relationship is a two-way street, and make efforts to strengthen it by creating applications that provide high value, which will lead more customers to purchase data plans.
The result will be positive for both carriers and app developers. In order to best serve their customers, carriers benefit by working hand-in-hand with application developers. By doing so, they are giving their customers a key element to long-term satisfaction – enhanced functionality. This puts carriers in a strong position to keep customers happy, and generate more profits.
Chris Hulls, co-founder and CEO of Life360, an application developer.
