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The Android Marketplace for free apps will go live Monday and will find itself facing competition from other pay sites before too long.

Everyone wanting to be taken seriously as a handset manufacturer is getting into the retail game these days. RIM announced an application store last week, to go live come March next year, and Samsung told us to expect a branded store pretty soon also.

Smartphone applications have always been something of a niche product - limited functionality and a small market size discouraged much interest in the business. As one executive stated in the early days: "The only reason we sell [smartphone model] is because the kind of person who buys one is the kind of person who makes a fuck of a lot of international phone calls."

That inattention allowed Handango and Motricity to build up a useful duopoly, while no one else seemed to think there was a market to monopolise. Even when operators did get involved they generally outsourced their application provision to one of those companies, who take about 40 per cent of every application sold.

But Apple demonstrated that handset vendors can get into the retailing game, though in Apple's case it cheated slightly by making application provision a monopoly service. Nokia's Ovi, Android's Marketplace, RIM's effort and Samsung's unnamed service won't be monopolistic in that way - all of them are going to have to compete with the incumbent duopoly, while Nokia and Samsung could even end up competing with each other to provide Symbian applications.

This means not only competing for customers, but also for developers who will have a choice of shop fronts. RIM has even stated it'll only be taking a 20 per cent cut from sales, which should attract more developers to the platform, though company-provided BlackBerrys will remain under company control - no installing unapproved applications on company time.

Android will start offering paid-for apps next year, and will charge developers an up-front fee of $25, but is only taking a 30 per cent cut on sales. Google claims this gets passed on to the network operator, after transaction costs, and Android won't be making any money at all. That's fine when you've only got one network operator, but when there are a myriad of Android devices, with users changing networks in the time it takes to switch a SIM, it's going to get more difficult - especially if the user is coming in over Wi-Fi or similar.

Samsung's operation is very much an unknown at the moment. The company won't say much beyond their commitment to end-to-end application development and delivery, so we don't even know if the promiscuous handset manufacturer is even going to sell Windows Mobile applications alongside Symbian-based ones. T

It certainly won't be supporting Windows Mobile Developers, who will have to continue relying on Microsoft. Samsung happily admits that "Mobile Innovator" is largely a response to Forum Nokia and intended to prevent developers getting technical support from the competition.

With all this attention it's clear that the industry expects people to start picking their handsets on the basis of what applications they run, and is prepared to spend money to make sure the greatest applications work on their devices. What those applications will be, and if the masses really want them, remains to be seen. ®

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