PocketGear acquires Handango, becomes third-largest app store

The world’s largest independent application store got even bigger today. PocketGear, which trails only Apple (NASDAQ:AAPL) and Google (NASDAQ:GOOG) in size, announced today it has acquired Handango, the second largest independent app store. The companies are combining to increase their scale and become a more attractive alternative for wireless operators and handset makers looking to compete in this crowded space.

PocketGear and Handango have been direct competitors since PocketGear was spun out of Motricity, where both Handango CEO Alex Boom and PocketGear CEO Jud Bowman previously worked. Bowman co-founded Motricity and led the acquisition of PocketGear from its parent company in June 2008. By combining the two companies, they will have a better shot at competing with Apple and Google with their open app-store ecosystem and goal to support every device, every app and every wireless operator. According to Bowman, the acquisition was about creating scale and expanding its global reach for its developer community and, in doing so, increasing the company’s focus on carriers and handset makers.

“We are giving handset makers and carriers one company to work with and rapidly get an app store deployed on a carrier-grade platform,” Bowman said. The companies have some impressive statistics to back them up. The companies app stores supports more than 2,000 mobile devices and every major operating system with more than 140,000 paid and free titles from 32,000 developers. Their business spans 175 countries. Handango and PocketGear combined have generated more than $400 million in mobile-app revenues.

PocketGear also provides the technology platform behind more than 40 storefronts, including for handset makers Samsung, LG, Sony Ericsson, Research in Motion and Microsoft, as well as the leading US mobile operators AT&T, Verizon Wireless and T-Mobile. Although PocketGear – and Handango – offer direct-to-consumer independent app stores, the vast majority of PocketGear’s revenue comes from these white-labeled app-store agreements, Bowman said. As such, PocketGear is also focused on letting wireless operators avoid the dumb-pipe scenario by cutting them into the revenue-sharing model alongside developers.

Wireless operators, along with handset makers, developers and third parties like Alcatel-Lucent, have proven their interest in the app-store movement. Most notably, at last week’s Mobile World Congress, 24 operators, including the US tier-one carriers, formed the Wholesale Applications Community, an industry initiative aimed at achieving the write once, read everywhere objective through opening up their processes. The carriers promised the potential to access three billion consumers, but it won’t be a simple task.

Bowman said its great that the carriers and handset makers are acknowledging the challenge of fragmentation, but that the jury is still out on whether an industry consortium can solve the problem – a sentiment that industry analysts have echoed.

“The idea of a common app standard across mobile device platforms is laudable but a long way off,” Juniper Research analyst Anthony Cox wrote on the firm’s blog. “Though, with Android and Symbian, there are moves towards open-source operating systems for the mobile OS, elements will remain proprietary for some time. And because of how the mobile industry has developed, operators are not in charge of the mobile OS in any case.”
With its established ecosystem of developers and ability to offer customization, as well as work across as many devices and OSs as possible, PocketGear is hoping to bring some of the power back to the mobile operator. PocketGear’s Bowman will lead the company as CEO and president of the combined company, and Handango’s Bloom will become the Chief Operating Officer.