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Slow demand for paid phones apps

Slow demand for paid phones apps

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Shoppers check out smartphones at a vendor's stall in Phnom Penh's Chamkarmon district. Photograph: Pha Lina/Phnom Penh Post

Smartphones and the accompanying online stores that sell applications for them may be gaining ground across emerging markets, according to a study conducted by a London-based telecommunications research and analysis firm, but Cambodia’s market is limited by a lack of places to legitimately purchase apps, and by low disposable incomes among most Cambodians.

“Smartphone penetration in emerging markets is expected to dramatically increase from 2013, and this will have a significant impact on the app store dynamic," Richard Hurst, the senior emerging-markets telecom analyst at Ovum, said.

"The availability of low-cost Android, RIM [Blackberry] and Nokia smartphones will see app stores becoming an increasingly important element of the distribution chain.”

For Cambodians, the only alternative is to turn to mobile phone stores and vendors who provide the apps through legitimate or illegitimate means and place themselves, as Hurst said, “as the leading providers of apps in emerging markets, emulating the position that they [app stores] occupy in developed markets. However, in countries such as China, India, Brazil and South Africa, MNOs [mobile network operators] with strong app store propositions will fight to defend their positions.”

Hurst did note that “the majority of applications in emerging market app stores are free or low cost as consumers have shown an unwillingness to pay for applications”, and with regards to Cambodia, “given the low penetration of credit cards in the emerging markets there exists a great opportunity for the mobile network operators to enter into operator billing”.

One salesperson, who wished to remain anonymous, from the plethora of shops at Phnom Penh's Sorya Shopping Centre that offer to “jailbreak” smartphones and upload apps, music, games and dictionaries for a nominal fee said: “People come here because they do not have a credit card to buy from the app store. If they buy from the shop, it is less expensive.”

For free apps, like Angry Birds, Cambodians turn to the app stores, but otherwise customers come to shops like his “for paid apps. Every one is between $1 and $1.50. In the app store, they're sometimes $20.”

The average price among the five stores on the Sorya Shopping Centre’s third level for MP3 music files was 500 riel (US$0.125) per song, with MP4s averaging 1,000 riel per song, and dictionaries were $5, according to Vatanak, a salesperson at Top Tech Accessories.

WING, which has an electronic payment gateway in the works for 2013, could not be reached for comment on whether customers would be able to make purchases from app stores once the new service is launched, nor could a mobile network operator be reached for comment.

To contact the reporter on this story: Gregory Pellechi at [email protected]

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