Software in focus in battle for mobile customers

By Tarmo Virki and Georgina Prodhan

BARCELONA (Reuters) - Telecom industry leaders including Nokia, China Mobile and Microsoft raced to announce online software stores on Monday in a drive to find new sources of revenue and please consumers.

The success of Apple's AppStore, which lets iPhone users download thousands of small software programs to personalize the way they play games, listen to music or find directions has inspired admiration and envy in many rivals.

As phone makers and carriers rack their brains for ways to stimulate demand and differentiate themselves in a depressed market, the value of software that is easy and inexpensive to access and quick to respond to trends has come to the fore.

The industry is also embracing open operating systems such as Google's Android and the LiMo consortium's Linux platform, which are attractive to innovative developers, at this week's Mobile World Congress, the industry's biggest gathering in Barcelona.

"The tremendous success of Apple's AppStore has underlined the importance of this distribution channel," said telecoms research firm CCS Insight in a recent report.

Nokia said it would open an online store for software and media under its "Ovi" brand in nine countries in May, with partners including social networking sites Facebook and MySpace and Microsoft also announced a revamped online store.

China Mobile, the world's biggest mobile carrier by subscribers, told the GSM Association's Mobile World Congress Daily freesheet it planned to launch its mobile market applications store in two phases within the year.

Korean phone maker LG Electronics and France Telecom's Orange said they also planned similar stores, while Samsung Electronics and BlackBerry maker Research in Motion have already announced such plans.