The challenge will be for OEM’s and operators to focus on their core competencies in doing what each does best.

Operators traditional strengths lie in building / maintaining networks, the billing relationship with consumers and in providing consumers with trusted, solid communications services (mobile and in some cases broadband). However, when you look at Comscore data and see that after 5 years mobile games penetration on average is still not higher then 5% penetration, you come to the conclusion – as many carriers have done – that content management isn’t their forte.

OEM’s face similar dilemmas. Although they understand what consumers look for in handsets and with regards to handset functionality, they have never been able to successfully integrate content with had their hardware (Apple is an exception but also isn’t a traditional OEM). Nokia tried with N-gage and well as Mosh and Downloads and has been unsuccessful with these (hence another attempt using Ovi as an umbrella service that captures all the others).

Sony Ericsson is a good example of an OEM that makes both an excellent product and also has established a strong partnership to help it manage content. Although PlayNow Arena focuses on premium content which SE continues to manage directly, they recently teamed up with GetJar to help with developer submissions and to leverage GetJar’s long tail of free content. This was a smart move and allows them to focus on their core business and premium content while outsourcing the more complicated / messy parts of free content to someone else.

As more carriers and OEM’s look to get into the app space they should realize they can’t do it all. The smart ones will focus on their core competencies and partnering with strong 3rd parties who complement their strenghts. The others will spend a lot of shareholders money doing too many things and will repeat some of the mistakes we saw in the dotcom era.

Patrick.