If it's online only, then the only difference is that it is for handset applications only, and not content – so no wallpapers, subscription services and music…only handset applications. Technically it would be an app store, just on on the handset.

A case of mee too here.
Judging by the success of iTunes, handset manufacturers like Nokia/ Palm/ Blackberry and OS major Microsoft have thrown their hat into the app stores ring and entered into the fray without recourse to a well thought out strategy.
Apple's OS and hardware are linear and integrated across their PC's/ iPods and iPhones and as such represents a very critical mass across diverse TG (young and old alike) and pricepoints. Remember the people who purchased the apple machines (iMacs & iBooks) later brought the iPods and again brought the iPhones…………..something which represents a generational thingy.

Blackberrys are the pre-rogative of the business class who stick to mails most of the time and as such loses out on the fun part….really wonder what apps would a blackberry storefront have. Windows mobile devices never sold like hot cakes and Palm's presence outside of US of A is too limited to warrant a significant challenge to Apple's app stores domination.
Against this background, what is the uniqueness which any operator's app storefront gets. Practically nothing, since the device is by a OEM, the managed services/ customer service and billing is outsourced and there are a plethora of devices on each network since the devices are not locked to any operator in the case of GSM service providers. This practically increases the workload in terms of apps porting and QA for hundreds of handsets. Also why would handset OEM's (read Nokia) allow the telcos to connect to the telcos app store through an ODP since it would cannibalize their own OVI service which suggests that the route to accessing the app store would be similar to the WAP deck. As far as the other qts raised by Nikhil, are concerned, it is only fair that someone from the operator's end respond to the same.

Read the following article by Konny Zsigo, who is a 20-year veteran of the wireless data industry. His company, the WirelessDeveloper Agency, creates and executes mobile Web marketing campaigns to directly increase content sales and drive users to action. WDA also supports mobile publishers with North American distribution, licensing and production of mobile content (video, games, apps, ringtones, wallpapers, themes and more).

*Most app stores are going to fail*

A whole lot of mobile publishers and content providers have anxiously awaited the arrival of around a dozen new "app stores." They believe that this is the dawn of a new era, one where handset OEMs will rise up as the new marketplace for mobile content, while the cellular phone carriers fade away quietly into the sunset.
If you're one of these people, I have chilling news for you–80% of these new mobile storefronts will fail, and I can tell you exactly why. In fact, they might all fail, every last one of them. (Except for Apple's of course, the rules don't apply to them. I can explain that, too.)

My prediction of the early demise of the competitive app stores is not enough, however, to save the carrier storefronts. They've got major problems and they need to change their policies immediately or else they really will turn into the dumb pipes that so many people think they should be anyway.

It all starts with your understanding of the three fundamental requirements for a successful mobile content business. If you don't have all three, at the same time, your mobile storefront (AKA, developer program) will fail.

1. Discovery
A storefront, as a collection of mobile content and games/apps, must be discoverable by the end-user. This sounds pretty obvious, but you it's not as easy as it used to be. Somehow, users are just supposed to trip over a storefront, fall in love with it, and then return over and over. It just doesn't happen like that–not in mobile, not in retail. Brand is no substitute for discoverability, either.

The largest retailer in the world is Wal-Mart. Their brand recognition is extremely high. Yet Wal-Mart does not rest on its brand to bring customers to their stores. They have, in fact, the highest marketing and advertising budget of any retailer. They spent $1.6 billion in 2008 in the United States alone.

Discovery for carrier storefronts used to be assured. The store button is located right on the phone, so you're just one click away from digital downloading nirvana. However, over the past year, users are skipping that button and clicking on the Internet browser button instead. Over 60 percent of the mobile browsing traffic is now off the carrier decks.

2. Billing
For as long as I can remember, content providers have dreamed of taking credit cards for mobile content purchases. I've seen many working systems that prompt users to enter their credit card info and now matter how slick the UI is, or how sophisticated the target end-user is supposed to be, the results are abysmal.
To simply say that "billing must be easy" is almost too cliché to be helpful, but it's the truth. Every click, every new input field, every "proceed" button is a reminder to the end-user that the purchase they're about to make is for something they really don't need. It's just not worth the trouble.

3. Positive ROI for publishers
The potential financial returns have to be high enough to offset the financial risks of developing to the platform. Publishers must at least believe they will make money or they'll never risk the time and money to find out. This is why it's so important for app stores to generate pre-launch hype.

How the carriers screwed up and allowed this to even happen
For a while, the cellular carriers were firing on all cylinders. They had discoverability (the storefront button on the phone's menu). They had a solid ROI. (If you could just get your game accepted by the carrier's content committee, you were assured a decent spot on the deck for awhile which made your company profitable and also got you a second round of VC funding.) And third, they had (and still have) billing.
But here's what went terribly wrong about nine months ago. The ROI for publishers started to crash. It's hard to know exactly what to blame it on: the economy, the shift to smartphones or the launch of the iPhone. Regardless of the reason, carrier sales of all content started sliding…
Instead of the carriers launching an all-out counter-attack they worsened the situation in two big ways. First, they cut down the size of their own staff to recognize the reduced revenue of mobile content. Second, and this is much worse, they started shifting operational costs onto the publishers and re-negotiated their rev shares downward. They also applied pressure to publishers in other ways that ultimately added costs and squeezed margins.

It's gotten bad enough that we are now watching publishers walk away from previous title acceptances. (In other words, publishers have accepted games/apps by the carriers but then choose not to build and deploy because they've lost confidence in harvesting a financial return for their efforts.)

Why the OEM app stores are going to fail
Back to the three fundamental requirements: discoverability, billing and ROI. I'm not going to weigh in on each individual initiative here, but here's what's going to go wrong in the collective:

1. Billing. If you think that telephone companies are clueless when it comes to content, what makes you think that handset OEMs would be any better? But that's not the worst of it, handset OEMs are B2B companies. They don't have consumer relationships past their warranty cards and support websites and most importantly, they don't have end-user billing relationships. So these app stores need to use indirect billing methods (credit card, PayPal, etc.) I think adoption will be slow.

2. Discovery. How will the end-users find out about the app store? Well, simple, right? The app store will be a link on the phone's menu. But wait a minute–I just got done explaining how the carriers were losing their discoverability because users are bypassing the store button and going straight to the web. Why wouldn't the users bypass the OEM storefront button too? Further, we're not talking about an installed base of millions of users here, we're talking about connecting storefront buttons to brand new phone releases. And incidentally, the carriers need to be on-board with those since THEY are the ones who buy the phones for resale. Ask Nokia about that. Unless the handset OEMs are going to start selling phones from their own retail stores, they need to rely on the carrier sales force to educate customers. Good luck with that.

3. ROI. Connected directly to the two points above, the ROI for publishers is a little shaky. Storefronts basically soft-launch with a zero user base, an uncertain billing system (that probably doesn't support subscriptions), a new developer portal that just might not be perfected yet and a new SDK needed to exploit all the cool features of the device. Oh, and by the way, 90 percent of the product downloads in the store will be free so that the users get a chance to, you know, have some risk-free fun. I think publishers will adopt a wait-and-see attitude.

Finally, for all of you that are convinced I'm an idiot because I've forgotten about iPhone's success, let me say that the reason Apple is succeeding is because they solved all three problems.

1. Billing. Credit card, yes, but look at how it's done. First of all, the concept of attaching a credit card is already embedded into the iTunes culture. Second, it's literally part of the product registration process. Third, Apple licensed the one-click patent from Amazon (you can see it right there in the registration terms and conditions). It was flawless execution.

2. Discovery. Steve Jobs, done.

3. ROI. Millions of units supported by a single SDK, a single handset purchase for development, no certification costs, no porting costs, global market access. Deployment costs are ridiculously low compared to carrier launches.

Now, I did point out in my last article that Apple is a facing a publisher ROI problem due to the unsustainability of the apps-to-customers ratio, the proliferation of free content, and the sheer number of market players. But even with all that, you can launch 10 iPhone apps for the cost of one carrier-distributed app, so most publishers are going to keep on trying for a hit. In other words, at least for the moment, they still "believe."

The bottom line? I predict that Apple's success is unique to Apple, and not a blueprint for other handset OEMs to copy. I predict that most handset OEM storefronts will fail due primarily to their inability to solve the billing problem. I predict that the carriers will follow only a portion of my advice and eventually realign their place in the content ecosystem as the dominant billing intermediary.

Finally, I predict that the mobile content publishers who survive will take matters into their own hands, and begin to create their own direct customer relationships. They will market and advertise their way out of this uncertainty.