Lebanon's touch launches an app store; can it succeed where others have failed?

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Yesterday, touch, one of Lebanon's two major telecom companies, announced the launch of its Android-compatible app store, aimed at serving local developers looking to release apps “relevant to the Lebanese market,” says Ghady Rayess, Managing Partner at FOO, a local app development company that will manage the store.

The touch app store, the first of its kind to be launched in Lebanon, will also allow Android customers to bill their app purchases directly to their phones, eliminating the hassle of dealing with payment gateways over Google Play, and it will also offer developers a chance to have their apps marketed by touch itself, over various channels.

For now, the app store is only available to touch's near 1 million Android customers, says Rayess, but in the future will be developed for Blackberry and Windows applications, to reach touch's smartphone users, which number approximately 1.2 million.

For developers, its rates won't differ from those of the App Store and Google Play; touch will charge a 30% commission from developers on Android app sales.

The advantage for local developers, says Rayess, aside from direct billing, is the power of touch's app store to help reveal apps to local customers. “On the touch app store, touch will market your app for you. If you have an app on Google Play, you’d have to search to see it. On the touch store, you’ll have more of a chance of becoming visible.”

The move to launch an app store is fitting given the recent rhetoric in Lebanon lately about bringing the country into the digital age, yet it also follows a regional and global trend. As SMS, MMS, and other previously lucrative services dwindle and app revenues soar, telecoms the world over are looking to grab a slice of the app (or should we say Apple) pie; the Apple Store, after all, topped $10 billion in revenue last year. 

In the Middle East, several other telecom companies, notably Mobily and STC in Saudi, Vodafone in Egypt, and Orange and Zain in Jordan have jumped on the bandwagon and launched their own app stores, or local versions of gloabl operator app stores. In more insulated markets such as Saudi Arabia, the idea seems to have traction; Mobily's app store, has logged 3 million total app downloads since its launch last year. 

Yet overall, operator app stores are tough to maintain. Thanks to Google's open structure, most of these stores are based around Android apps, which developers know are less lucrative - by far - than iOS apps. Although Android has a whopping 80% of the mobile market share, iOS still brings developers five times more revenue per download than Android. 

For these reasons, many app stores, both localized and international, have failed, including Telefonica, which launched in 2009, as well as Verizon and Vodafone.

Even if operator app stores aren't historically very lucrative, stores will at least facilitate sales of more 3G data bundles. In the broader picture, that may not alleviate the fear telecoms have of becoming "dumb pipes" for data, yet it does boost their bottom line. 

For touch, selling more 3G bundles may make sense; only 60% of its subscribers are currently smartphone users. Launching a store featuring apps developed specifically for the Lebanese market may help both developers and users after all, if mobile users find good apps and developers gain more exposure locally than they would otherwise. It may come down to touch's ability to market and display those apps well.  

Nina Curley contributed to this report.

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