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PlayPhone: The app store alternative coming to a carrier near you

Startup aims to take advantage of social media and carrier billing
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Consumers usually want the same things from their carriers: fair prices, good wireless coverage, a wide selection of cutting-edge smartphones and customer service lines that won't leave them near tears. Few of us look to carriers to provide the best apps, too.

A new frontier: Phone companies as app providers

PlayPhone's mobile gaming service boasts more than 350 titles.

That failure to see phone companies as app providers, combined with the dominance of Apple's App Store and Google Play, may help explain why it's been so hard for established players in telecom to get much traction in one of the most lucrative areas of mobility. Verizon, for example, finally shuttered its V Cast app store early this year after much criticism. Vodafone's AppSelect app store suffered a similar fate not long before. There's still T-Mobile's T-Mall, perhaps, but what may be increasingly common on many handsets in the near future is an alternative app store called PlayPhone that's managed to form partnerships with a number of the major carriers.

PlayPhone describes itself as a social gaming service with more than 350 titles from Big Blue Bubble, 11Bits and several other independent developers. The company has signed up Verizon Wireless and most recently Sprint to offer its store pre-loaded on select Android smartphones. PlayPhone has also partnered with AT&T on an HTML5 store. Those who use it will be able to purchase apps via carrier billing, meaning their payments will simply be added onto their regular phone bill rather than being managed as a separate credit card transaction via a more traditional app store account.

Bhaskar Roy

According to Bhaskar Roy, PlayPhone's chief product officer based in San Francisco, the "frictionless" element of carrier billing is one of the most compelling reasons why the concept of owning an app store--even if it's just a white-labeled version of PlayPhone--remains attractive to major carriers.

"Typically technology always happens in a couple of waves. There was Yahoo and then others that started with search until Google took it in a different direction," he said. "In social media there was Friendster, and then later there was Facebook. In the first wave of app stores, carriers were looking at how they could bring it in-house. They built the server farms in-house, got all the games themselves, and tried to do it end to end. But those are pretty big costs. What we provide is software-as-a-service, in the cloud, thereby they can get economies of scale."

Roy said that beyond carrier billing, one of PlayPhone's major advantages is its recommendation engine, which is based directly on what others are playing within its service.

"Most of the users and gamers find most of the games in two ways: word of mouth of what they're doing, and the second part is going to the top of charts and seeing if that's what they want to play," he said. "We've tried to take that word of mouth and build it into the platform, so you can very easily view what your friends are playing and what they're saying about it."

PlayPhone offers an SDK to developers that includes access to the carrier billing features as well as integration with its social capabilities. All apps are vetted before launching on the service, but Roy said the company was trying to position itself as easier to deal with than the review process apps or games typically go through with Apple or Google.

"We want to keep the process lightweight, but still have a process," he said. "Gamers want the quality there."

New services won't challenge industry giants--yet

Brian Blau

According to Brian Blau, an analyst with Stamford, Conn.-based market research firm Gartner who recently published a report on the growth within major app stores, services like PlayPhone have potential but are unlikely to unseat Google Play any time soon.

"These alternative app stores are more popular in Asia than in the U.S., and they're almost always on Android. They're not going to be on iOS, so it's a limited segment of the market," he said. "There may be some impact over the long term, but it won't be significant for the next couple of years."

Having either experienced failure with their own stores or watched those of their competitors implode, carriers seem wary of saying much about their relationship with PlayPhone.

"This is the Games App, exclusive to Verizon customers, and available on select Android devices," wrote Verizon Wireless spokesperson David Samsung in response to an inquiry from FierceDeveloper, referring to Verizon's brand for PlayPhone's service. "I can't speak to PlayPhone...but I can say that gaming on 4G LTE phones is very popular. Games gives mobile gamers access to free, premium, subscription, a cloud gaming all in one location. The app is free but data charges apply."

Though ForbesAllThingsD and others reported that PlayPhone will be available on Sprint phones, the company demurred. "We actually haven't announced a partnership with PlayPhone so it isn't something we're interested in an interview about," a spokesperson said.

"These relationships take time to build," said Roy, who said PlayPhone is also working with Claro Brazil. "We'll be working with other carriers to provide an experience globally." At the moment, however, he believes PlayPhone's existing partnerships give the firm access to four out of five smartphone users.

Blau said carriers probably aren't expecting to see any major advantages over Google Play but want to ensure they aren't perceived as being on the sidelines in mobile gaming. In that sense, working with services like PlayPhone may be more about marketing than anything else.

"When you think about what they have to do as a whole, carriers are going to have a multi-channel strategy. This is an engagement technique that they can use with their existing customers to stay inside of their circles," he said. "They know their customers are still going to go to the big app stores."

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