The risk in moving up the mobile phone value chain with products and services developed in-house is that competitors might use better and/or cheaper products developed by third parties. e.g. Google Maps instead of an in-house navigation service.
Figuring out whether a product is developed in-house is not as simple as it might seem. Today many software products are developed with supply chains and the final seller (usually called the "OEM", or Original Equipment Manufacturer) provides naming, marketing, some customisation and technical support but does not produce most of the technology in the product.
If Telstra is only an OEM for Sensis Search, Whereis Navigator and these other services then the risk of its competitors using better and/or cheaper services from 3rd parties is reduced. However even if Telstra is only an OEM, it still needs to choose good suppliers.
So who makes these Telstra services? X = in-house
- Sensis Mobile Search is "powered by Yahoo"
- Trading Post is a self-contained operation that was acquired by Telstra's Sensis arm, X
- BigPond TV on Mobile is powered by Streamezzo
- Whereis Navigator cannot tell, assume in-house X
Who are the competitors for these services?
While it is not clear that Telstra made any bad choices here, Optus and Voda/3 must have been happy to have been given the opportunity to compete against Telstra with powerhouse products like Google search , Google maps, and eBay.