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Despite its co-dependent relationship with the iPhone, O2 UK plans to launch its own developer community and app store next year, which could put non-Apple handsets in a better position to compete with the iPhone and its App Store.

O2's Litmus project

The project, called Litmus, will offer developers virtual access to 40+ handsets in the O2 portfolio (though not the iPhone of course). They will be able to develop, trial and monitor applications to run across some or all of the phones, improving the efficiency of their efforts, and they will also be able to sell apps and content online or over the air. This looks similar to T-Mobile's plan to create its own software store, allowing developers and consumers to work across all its high end and midrange phones, rather than targeting each one separately.

The two initiatives show another way that European cellcos in particular are looking to establish a strong position in the mobile web value chain, by creating a single source for mobile content that is associated with their brand and network, rather than a phone maker's or internet player's platform. This will not only help them attract and retain high value, web savvy consumers, but should enable them to command a better slice of the revenue pie.

Speaking at the Mobile 2.0 conference in San Francisco, O2's head of product development, James Parton, said that Litmus will offer developers the tools to work collaboratively with selected customers in a live virtual laboratory, so that community members can build on one another's ideas and pool skills and experience. They will also be able to trial important parts of the O2 infrastructure, like messaging or billing systems.

Although Litmus seems to be envisaged mainly as a testbed at first, to encourage the creation of new applications for the O2 network and devices, it should quickly evolve into a fully blown store to compete with App Store, Android Market, RIM BlackBerry Store and others.

T-Mobile's initiative

In September, T-Mobile USA said it would launch its own applications store, despite its own close ties with Android Market. It released the beta version of its new devPartner Community program, which is expected to evolve early next year into a full blown content download portal and store, unified by the T-Mobile network and brand but available on all its supported handsets.

The initial point of the devPartner initiative is to provide developers with an easier and more efficient channel for dealing with T-Mobile. Many third party applications providers complain that they are deterred from working with carriers because they have too many restrictions, or are complicated to work with. This makes them more easily attracted to services run by vendors, which usually have more experience of working with developers.

Speaking at the CTIA Wireless IT and Entertainment event last week in San Francisco, T-Mobile USA's director of mobile apps and partner programs, Venetia Espinoza, said the devPartner Community model will enable developers to market their apps directly via the carrier's deck. They will earn between 50 per cent and 70 per cent of the revenues from the software, and will have the right to determine their own premium download pricing. From this week, the devPartner site will provide partners with rate cards and clickthrough agreements outlining the standard business arrangement with T-Mobile, which will also offer technical support, apps trials and a virtual laboratory.

Apple's store, despite popularity with consumers, is still criticized by some programmers for being over-controlled and mean with the revenue split so there is still an opportunity for operators to outshine it. The advantage large cellcos will have over Apple is their market reach. T-Mobile has 30 million subscribers in the US alone, three times the number of iPhones that are expected to be in use by the end of this year.

AT&T seeks unified midrange platform

Many operators are likely to concentrate their apps store efforts on midrange phones and the lower end of the mobile web spectrum, leaving the power users to shop in the heavily branded and marketed stores from smartphone vendors. AT&T's head of wireless and consumer businesses, Ralph de Vega, said at the recent Web 2.0 event in San Francisco that the operator saw the first step being to unify the operating systems running on lower end devices, in order to create a mass platform to attract developers. He did not say which systems AT&T was considering, but it wants to phase in a single software platform for handsets that fall below the smartphone category with full OSs like Windows, but are still able to support a web experience.

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