Mandalay parlays Appia buy into tighter carrier relationships

Contact: Scott Denne

Mandalay Digital Group makes its most ambitious deal yet with the $65m acquisition of Appia in its drive to carve away at the dominance of Google, Apple and Facebook in the application discovery and installation business. Mandalay has accumulated tools that enable wireless carriers to get back in the app distribution game – a market they were essentially booted from with the launch of the iPhone and the growth of the smartphone sector that followed.

At first glance, the idea that carriers could carve away at the dominant app distribution channels seems like a long shot. And in the US, it is. In emerging markets, however, carriers have an advantage as they have existing payment relationships with customers who often lack credit cards and rely on carrier billing to buy apps and content.

Since its acquisition of Digital Turbine Group, Mandalay has built and bought tools for carriers to get their cut of the app industry, such as payments, app marketplaces and preloaded apps. With Appia, it adds a mobile ad network with an app-install focus to the mix. Mandalay expects the deal to boost both businesses as it can bring Appia’s gains in exposure to more carrier-specific channels, such as preloaded apps and carrier app stores. Mandalay also obtains another monetization channel to offer carriers.

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