Mobile App Stores Are Suddenly Everywhere? -The Apple Influence
Mobile Application Storefronts are very simple concept, but received such little fanfare until the new driver of the mobile industry, Apple (yes Apple, the non-traditional mobile competitor), released its App Store for the iPhone. This move essentially provided a marketplace for new innovative content or services developed by third parties to be purchased or used by iPhone owners. At first glance, this seems very similar to current developer programs provided by handset manufacturers like Forum Nokia, marketplaces for platform providers like Window Mobile Catalog, or storefronts for application aggregators such as Handango, so why the fuss since this is old news? In a nod to the existing incumbents, there is a wealth of information regarding mobile applications, content reviews and developer support. So why after the Apple App Store launched, followed by the Google Android Market announcement (promising immediate time to market for developers) did Microsoft need to announce a relaunch with Skymarket for Windows Mobile and then Symbian (read: Nokia) following suit with a another marketplace? Don’t we have enough, aren’t they already there? My guess is a significant amount of press coverage to go along with a $1M/day sales number over the first month of launch and recent announcement of 100M downloads has something to do with re-launches.
What is Apple doing differently? They are not dreaming up new concepts, just executing by creating better experiences within their “walled garden” (note- this is counter to what most are pushing for with open networks or ecosystems). First, they laid the framework with the iPod/iTunes success which then led to the iPhone that promotes heavy internet or service usage due to the easy navigation and display. They then opened their iPhone SDK and marketplace to third party developers while tying the purchasing and product browsing back to familiar tools like iTunes in addition to the iPhone itself. You get a double win by enabling developers to create very advanced content and providing a next generation buying experience that also fully incorporates web 2.0 concepts such as rating and recommendation into a familiar tool with iTunes. In my opinion, it is a brilliant ecosystem that addresses the consumption and development of mobile services. The only issue here is that content sales will not go beyond the iPhone user base, but those concerns do not seem to be too great as iPhone sales continue to climb in the highly desirable smartphone segment (due to the higher average spend compared to feature phone owners). This is where the “iPhone Killers” and marketplace competitors who are following behind need to understand the fact that it is all about the customer experience created from all the elements in concert, not just a device or service in isolation. It is the sort of innovation the mobile market needs to push other incumbents to make things easier and more enjoyable for the consumer, which is something not always heard in relation to mobile services.
What do you think about the mobile application development and subsequent monetization opportunities? Does Apple have the right idea with a walled garden approach or will open platforms be the winner? I am sure the answer will start with “depends” since we will be concerned with the target customer segments. I am interested in your thoughts.
Comments
My 2 cents on this very interesting topic –
Everyone who is aware of Google’s Android might be thinking if it is the iPhone’s killer platform. I would like to assume Jeremy’s position on this. It depends!! I believe “wait and watch” will be the appropriate approach for now before anybody can jump into conclusions.
I believe that Google may have an edge over Apple’s iPhone in the shorter run for various reasons:
One primary reason I could think of is that Apple has taken a “walled garden” approach to its iPhone release. Though iPhone is supposed to be an open platform, the truth is that Apple continues to control what applications, developed by open source developers, are promoted through their App store. Another reason I could think of is the exclusivity deal that Apple has signed with AT&T for the iPhone. This deal allows AT&T to be the exclusive carrier to sell iPhone.
Google on the other hand has clearly indicated that any Mobile manufacturer can use their platform for their upcoming devices, any wireless carrier can support it and the platform’s openness is more compared to iPhone when it comes to 3rd party app developers. And in the US especially, iPhone’s exclusivity deal with AT&T, gives a lot of time for Google to capture significant market share through deploying Android on devices offered by many other carriers.
Like any other first generation software/platform, Android too might have its own glitches at launch and may take time to mature and start attracting the customers. But the question is – can Android match up to the new revolutionary customer experience which has attracted so many customers to buy iPhone?
It will be interesting to see how fast can Google’s Android platform mature and match the customer experience that iPhone provides thereby attracting a good amount of the market share. If Android’s open platform becomes successful, this might in turn drive Apple (and potentially other platform providers) to become more competitive and start truly making their platform an open platform supporting 3rd party development. Let’s wait and watch……
Posted by: Sandeep Chandrasekar Seshadri | September 16, 2008 10:42 PM
Sandeep,
Some great thoughts in regards to Android.
I think the biggest questions will be what are the real strengths of Android, the end customer experience of Android phones, true target customer market and impact of the alliance with Symbian . Android provides access to the communications and applications operating systems in the mobile phone with their open source platform which allows developers to make new types of applications from a common platform and phone manufacturers to create new phone models without royalty concerns. However, Google will not be able to manage the user experience since they leave the value chain until products like the Android version of Chrome (their new browser) or advertising widgets are potentially added. Even then, the customer experience is in the hands of someone else. For that reason, I doubt customers will line up to have an Android-based phone since it is not a Google managed experience. However, the play for Google is to have as many phones in the market as possible, hence providing a royalty free OS and offering access into the communications operating system, so I am sure they hope that phone manufacturers at least do a serviceable job and distribute as many phones as possible. Once the install base is established, it will be easier for content providers to justify porting to that platform. This may be addressed once we learn more about the alliance with Symbian is further developed since Symbian is so widely deployed.
As it stands, iPhone will not leave the smartphone market and has control of the full value chain (down to what applications are allowed on the App Store). It will be difficult to copy and Google does not seem too concerned about doing that in the short term. We will see what the long term brings.
Posted by: Jeremy Kloubec | September 17, 2008 04:03 PM