Well the fact that the web site you cited contains vergage that is almost exactly that used in the PR lends credence to concluding that you have identified it. Just compare the list of platforms. Cut-n-paste???
It sounds almost to the word. There are no coincidneces of this type, IMHO
I also found GetJar as a very likely candidate for the partnership deal with Metatron, and if so, this is good, very good news. Let me explain why… but don’t hold to much importance on what the name of the company really will be. There aren’t many mobile content distributors around, and GetJar simply serves as a very nice example of why Metatron is about to undergo a game changer …
Why GetJar could be a likely candidate, because GetJar is like the PR states a:
- Mobile content distributor “GetJar is world’s second largest app store with over 1 billion downloads to date, second only to the Apple App Store” - Award winning: “GetJar won the Meffy, Tiecon50 and Mobile Excellence awards for its achievements and products” - GetJar is a game changer: “cfr. Q&A – How is GetJar a game changer?” - …
So how big would the name be?
This is a question a lot of people on this board would ask, even if it would be another company. But then ask yourself, how many names could you come up with in one of today’s (if not THE) most hottest software industry? Could you come up with some market players, horizontally or vertically, besides your daily household names like Apple and Google Android? Not many, and I don’t have to say that this billion dollar industry (which btw will grow five time its size by 2015!) is not only driven by a handful of top tier companies. Let me make it more clear by sharing you some DD numbers which you don't easily come across:
Between 2009 and 2010, Apple’s market share (by revenues) dropped with 3,2 % in a market which grew (in one year) more than 300%. Analysts expect that Apple’s market share will continue to drop at a pace which is higher than what we saw between 2009 and 2010. So in a market where Apple and Google Android had both 64% market share in 2010, it is predicted that other independent (and open app storefronts) will increase marketshare (from already more than 20% today) at the cost of Apple which will fall below (and probably continue to fall below) 50%. So conclusion being, don’t underestimate the power of other market players. And oh yeah, before I forget, GetJar is second largest next to Apple, strange how you haven’t come across a name like that …
So what could be the impact of such a partnership deal? Or what is meant with a game changer deal? Well let GetJar explain it for me:
“GetJar is the largest cross-platform, independent app store and not tied to a particular carrier or handset maker. As such, applications can be delivered to market within 24-48 hours. Moreover GetJar believes openness is the key to ruling the market. The app store with the largest scalability is most likely to exceed. GetJar has the broadest scalability supporting over 2,300 handsets as opposed to just one like iPhone”
– I will elaborate on this a bit later but this is exactly what I would call a game changer, because you are simply changing the rules of the game. A game which was dominantly played by Apple but unfortunately it is no longer theirs. The time to market as well as the cost/revenue stake for developers is incredibly lower than with Apple. The two key concerns of any developer.
Also don’t forget that it is a game changer through the eyes of Metatron, thus much easier to understand why since they are so close to the industry. Hence, why many investors don’t realize or understand its significance.
Why is this one of the best (if not the best) strategic options for building a foundation to boost future revenues?
The key behind this game changing deal is that it significantly drives down the time to market for many developers. Also, developers will keep a significant larger part of the revenue income generated by their apps. You understand why, when you understand GetJar’s business model of making money:
“GetJar generates revenue through its PPD (pay per download) system which allows developers to get premium visibility in GetJar’s store and distribution partners by bidding for ad slots. Developers can geo-target campaigns by country, carrier and/or handset and bid whatever amount they are prepared to pay for each download. A daily maximum budget gives developers a way to control their costs and developers only pay for the downloads they incur. Additional products like Application Download Page and Apps Catalogue Express (ACE) in addition to partnerships with carriers and OEMs contribute to GetJar’s reach and traffic and as a result help generate additional revenue.”
Again, it could be that it isn’t GetJar with whom the deal is closed but most other storefronts (although a bit smaller) have a similar business model in place.
So how does this translate into higher revenues?
Well, remember how Metatron drove up its daily revenue income with more than 50% in January 2011 as opposed to December 2010 (not to even to mention the much higher percentage if we compare with previous months)? Metatron grew a higher customer base (because of the holidays which gave the company more exposure)but in particular because of the 100+ apps they were able to release in one month! So imagine what Metatron could achieve when it would release all of its current and future applications on GetJar’s storefront. Theoretically speaking they would minimally double their revenue income by only realizing their current app base with the same exposure they would get from the Apple’s store. Other storefronts like GetJar have by the way many mechanisms and functionalities in place which allow for much more visibility than with Apple’s storefront. And remember, you can make as many apps as you want but you won't get any revenue if you are not able to market them quickly and efficiently!
Now what I just outlined is only a consequence of being present on another storefront, it doesn’t really include any corporate business deal.
So what could the business deal be about?
Next to the typical elements like customer base etc, it would include:
- Time to market which is higher (compared to other developers on Getjar) because of their business partnership; - Higher revenue share because of the trust relationship - Access to A LOT MORE programmers for a competitive price - A lot more visibility, because I expect that GetJar (or another name) would expose Metatron as being one of today’s largest mobile application developers around - Access to the company’s resources (GetJar is backed by a top tier Venture capitalist !!! ) - Business partnerships with content providers (GetJar could for example outsource content deals to Metatron…) - And I could go on…
I see a lot of investors discuss on why this PR has been set up as it is. But I believe it has been done so for a reason, one being because of the mutual legal agreement which allows for certain disclosures at certain moments. Another being that it allows for future PRs with some profitable business deal disclosures…
Some food for thought
I would consider, IMHO, a deal between Metatron and GetJar (or another important mobile content distributor) something like a deal between:
*a small beverage company closing a deal with Pepsi where Coca Cola would be market leader; *a small retailer closing a deal with Carrefour or Tesco where Walmart would be market leader
So what do you think would happen with the PPS of the smaller company when its products successfully start to sell over time?
So as with other industries we are looking at a vertical business deal where Metatron is in essence (for now) a relative small producer and where storefronts are today’s retailers like Walmart or Tesco. The retailer/FMCG industry was once an industry led by producers, but this has changed dramatically. It is today one of the toughest markets around where you have more competition upstream (i.e. between producers and retailers) than among producers horizontally (because as with apps, they succeed in differentiating themselves enough). But as with this industry we will see major consolidation waves take place which I believe will be in the market of mobile applications at a much higher speed. The markets is indeed much more fragmented and lacks of a decent market structure making developers low priced candidates for buyouts (also 2011 and 2012 will be years with a lot of M&A activity taking place).
So bringing everything together, I think we can understand why we are looking at a real green game changer…
As a last note, I would encourage you to read more about GetJar, because it really gives a good insight on what I have been explaining. One thing that really stood out for me was a press release by the company’s CEO on his view on the mobile application industry. I highlighted what I found particulary very interesting. It will really make you understand why Metatron is really well positioned to become the upstream market leader in app development.
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