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U.S. customers wanting to use Nokia's upcoming over-the-air application store will need to have a credit card, as the cell phone maker said it won't have a carrier billing option.
The move could be a blow for Nokia because carrier billing would have led to a seamless way to quickly purchase apps. While users will likely only have to fill out credit card information once, every barrier to purchase could lead to fewer sales. The cell phone manufacturer hopes its Ovi Store can help it gain a wider audience in the United States, where it trails Apple, Research In Motion, and Palm in the smartphone market.
Mobile apps have been around for years from places like Handango, but there has been increased interest because of the success of Apple's App Store for the iPhone and iPod Touch. One underrated aspect of the App Store is that its billing infrastructure is tied to iTunes, and many iPhone and iPod Touch users already had billable accounts there.
As competing application stores arise, it's unclear how big a role the payment system will play. Microsoft has yet to officially announce what payment system it will use for its Windows Marketplace for Mobile, but the company said it's mulling carrier billing.
Google went in-house for its store, as Android Market users have Google Checkout for payment. Research In Motion chose PayPal for payments for its recently launched App World for BlackBerry smartphones. The companies haven't released download statistics for paid apps yet, so it's unknown if these third-party payment systems have been a help or a hindrance.
Nokia users in eight other countries will be able to bill their carriers for apps when the Ovi Store launches in May. The company wants to differentiate its app store offering by integrating social networking and location-based information. For example, if a user gets off a plane in New York, the Ovi Store will utilize that geographic data to recommend location-relevant apps like local restaurant review programs.
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