"It is clear that many smartphone users are not yet fully aware of the additional applications and content they can run on their phones," says Jens Greve, head of Sony Ericsson Developer World. "While we are making progress, we would like to see many more users adding applications and content to our UIQ phones."

The foundations are already there. Research by SymbianOne suggests a typical UIQ smartphone user adds more applications, in terms of value, than users of the world's most popular smartphone platform, S60.

"One of our main challenges is reducing the cyclical nature of application and content sales," says Jens, who was until recently content acquisition manager for productivity applications for Symbian and Java phones at Sony Ericsson. "Today we see sales of applications and content linked to the release of new models. As new models are released sales surge, but then slow between releases."

Sony Ericsson has implemented a number of strategies to overcome this. In conjunction with Motricity (the company providing the ecommerce engine behind Application Shop) regular newsletters are now being sent to people who have registered on Application Shop, making them aware of new and updated software. Another approach has been the inclusion of a "more applications" shortcut on the standby screen of the P1 and forthcoming W960, which leads the user to free applications, try and buy applications, and the mobile version of Application Shop.

"There are only five shortcut buttons always visible on the standby screen, so we had to work hard to convince the product planners of the value in a 'more applications' shortcut," says Jens. "But making the link so visible is an important step in helping users realize that they can enhance the features of their phone with new applications and content at any time, not just when they first buy it."

Even with this elevated profile, Jens does not see the mobile version of Application Shop necessarily being focused solely on becoming a lucrative sales channel. "We are seeing a clear reluctance by users to buy relatively expensive applications via the mobile portals," says Jens. "This appears to be due to concerns about using their credit cards over the Web from a phone, even though the mobile shop has the same security as the desktop Web version." Jens notes that the same situation does not apply to content and Java games, were users can purchase with premium SMS directly from their phone and do so regularly.

Despite this apparent barrier the mobile version of Application Shop is contributing to sales. "While users are not buying from their mobiles, we can see that they are exploring the application catalog from their mobile device," say Jens. "They then come to Application Shop on their PC to make a purchase, once they have decided which application they want."

Like so much of Sony Ericsson's experience with UIQ over the last two years, Application Shop has not been without its challenges. During the initial implementation Motricity were in the process of merging their ecommerce systems in the US and Germany. Many developers found issues at that time. "I spoke to several developers last year who were having difficulty getting their applications set up correctly in Application Shop," says Jens. "Coupled with the issues we were having with the migration to UIQ 3, I know it was a frustrating time for developers. However, those problems are now solved. An illustration of this is that we now have over 500 UIQ 3 applications in Application Shop and almost 400 application profiles have been updated for the P1."

Overall Jens sees "more applications", the try and buy program, and Application Shop being as much about educating users as it is about selling applications. "We have never seen Application Shop as 'the one and only' channel for selling applications to UIQ 3 users," says Jens. "Many of our developers are reporting healthy UIQ 3 application sales from their own shops and portal. We applaud these developers for the work they have done in building their channels and believe that Application Shop has been an important catalyst in helping users become aware of these developers."

There are still challenges ahead for Sony Ericsson. "We know that users of devices like the P990 and P1 are good at finding new applications for their phones," says Jens. "However, as we build our range of UIQ 3 devices to target other users, such as music lovers with the forthcoming W960, we are looking for ways to ensure these users adopt the same habits as P series users." One way Sony Ericsson is doing this is by working closely with operators to ensure they have applications and services ready for these new UIQ 3 users.

While UIQ 3 device owners have an appetite for third-party applications, Sony Ericsson's biggest challenge is simple: device volumes. The sheer scale of S60 shipments now means (despite lower per user sales) that UIQ is no longer the top revenue earner for developers as it was two or three years ago.

Sony Ericsson has aggressively built its featurephone range and as a result become one of the top four mobile phone companies. With the issues around migration to UIQ 3 in the past, a good foundation for third-party application sales, and an education orientated approach, the prospects for UIQ 3 application sales hinge very much on Sony Ericsson paralleling its success with featurephones shipments in its UIQ 3 smartphones.

With Sony Ericsson planning to have five UIQ 3 phones in the market during the forth quarter (the M600, P1, P990, W950, and W960) the foundations are being laid for a broad smartphone offering. Joining these phones could be two UIQ 3 phones from Motorola, the Z8 and rumored Z10. With the early indications suggesting that the UIQ 3 "platform promise" - of enabling developers to target phones with a touch screen or keyboard interface (such as the Motorola Z8) with a single SIS - is proving to be well founded, the opportunities for UIQ application developers look set to improve significantly heading into 2008.