Telefonica’s O2 Litmus Fails The Litmus Test; App Effort Closes Down

Attention mobile operators: here’s a cautionary tale for you about what happens when you try to wedge yourself into the app ecosystem created by the likes of Apple (NSDQ: AAPL), but fail to engage developers.

Today sees the closure of one initiative that underscores this basic challenge for carriers: O2 Litmus, a project started by the multinational mobile operator Telefonica’s subsidiary O2 to create more apps for its customers, has shut up shop.

It’s not fair to say that developers completely ignored Litmus, but in a blog post titled “Farewell O2 Litmus!” announcing the end of the service, James Parton, who had been heading up the project for O2, admits that people “didn’t get what Litmus actually was,” and that developers didn’t really engage in the service’s core offering — a service that let developers create apps on the Litmus platform and then use O2 customers to test those apps. He writes:

One of my personal disappointments with Litmus was the ultimate failure of the concept of connecting developers with “real” customers to help prototype software and test ideas. This was absolutely unique at the time of launch, and something that gained Litmus a lot of attention. I guess it could be deemed a success from that perspective, but the reality is it never caught on. Simply we never convinced developers to embrace the idea. Even now, far too many developers are happy beta testing with friends and family.

In addition to O2 Litmus, Telefonica (NYSE: TEF) also developed similar initiatives in Spain (Open MovilForum), Mexico (Movistar Developers Platform) and Brazil (Plataforma do Desenvolvedores). O2 Litmus was the first of these be conceived, back in 2007 before apps hit their stride and there was potentially more of an opportunity for operators to help developers create mobile services.

To be honest, it looked like the writing was on the wall for Litmus — and most likely those other localized projects — when Telefonica created a new initiative called BlueVia — where Parton now sits as head of marketing. This offers a similar kind of attempt at courting developers with Telefonica APIs. But here the rewards are potentially more lucrative, as BlueVia purportedly can get those apps out to the whole of Telefonica’s footprint, which extends from operations in Europe through to Latin America, and covers a healthy 223.1 million mobile subscribers.

Among the APIs that BlueVia makes available to developers are those to integrate with O2’s customer billing (to make charges directly to a bill); and APIs for SMS messaging, even giving developers the option to share revenues on messages sent.

That’s innovative and potentially very useful, but even so, and even coming from a project with the scale of BlueVia, an operator still needs to mind Parton’s words, and use them as their starting point: “The developer community is still struggling to understand the value of working with Telco’s [sic] so when is the light bulb going to finally come on? Telco’s need developers more than developers need Telco’s.”