Mobile Application Marketplaces – Where are we headed?
Smart phone market share is growing faster than ever before. Since iPhone was introduced, there has been a sudden surge in Smart phone adoption. Every Smart Phone maker is now trying to compete with Apple’s iPhone and it’s App Store. Mobile Application Stores, though not a new concept, kicked off with renewed vigor since the introduction of Apple’s App store which has already seen 2 billion downloads just a little more than a year since launch.
I have written in this blog before about the growing consumer demand for mobile applications and the potential these App Marketplaces have for Operators and OEMs alike. Since then, selling mobile applications on devices (and attracting and crowd sourcing these applications from independent developers) has now become the primary battleground for operators and OEMs, who are all racing to catch up with the success of iPhone’s App Store. With the advent of these App stores (not to mention Independent players like Handango who have also created device or operator independent App Stores), the entire mobile industry is being reshaped and there are a variety of channels for the developers to reach out to the consumers to sell their applications. Like some called it, a new App Economy has born!!
But where are we headed with all this? I believe this proliferation of App Stores is more of a cause for concern than it is to feel good about.
From a Consumer Standpoint
This growing number of App stores will cause a lot of confusion. Where does one go for the Applications? Should the user go to his Carrier’s App store on the device or the one provided by the Device maker? Or, should one go off-deck to independent storefronts like Handango?
- Different User Experiences: All these App Stores have a different user experiences in terms of App discovery, purchase, download and billing. Choices are good but not too much of them!! The success of these App Stores will now depend on the user experience and the richness and variety of the applications they bring to the consumers.
- Different Catalogs and Price Points: The same (kind of) Apps are priced differently in different App Stores. Some Apps are available in one but not in the other. As a user if I am used to certain applications, will I get the same applications when I switch my Carrier or Device (running on a completely different OS platform). Not sure. Even if I get it, probably I may end up paying a different price than that I had paid for it in the previous App Store.
From a Developer Standpoint
There is a growing dilemma amongst developers in terms of which OS platforms and which App Stores they need to target for building their Apps. There are too many App Stores and a wide variety of OS platforms that they need to build towards. Fairly larger companies have resources to invest in and support multiple platforms and App Stores for their applications. However, smaller companies or the true independent developers cannot afford that. This tends to drive away their loyal fan following when their fans switch their carriers or devices.
- Different Levels of Maturity: The natural path the developers ought to take is that of the App Store that gives them a larger base of consumers for them to take their Apps to. But each App Store is in different stages of maturity. Even though Apple’s App Store currently has the largest target base and is totally matured, other App Stores that have launched more recently has the potential to grow bigger due to the already wide spread device base or customer base they own (ex: Nokia Ovi Store or a Verizon Wireless VCAST App Store). More over, with matured App Stores, the developers will need to compete with more number of Apps than the newer ones. But can they be assured of quicker success if they go behind newer ones?
- Different Operational models: Most of these App stores have different operational models in terms of the revenue split, application distribution, settlement processes and also in terms of the reporting mechanisms. Adding to the complexity is the fact that some of these App Stores are targeted at a wide variety of devices (unlike Apple’s App Store which only targets 2 devices – iPods and iPhones).
- Need for adequate information: Even the download numbers reported by different App Stores can be misleading to the developers. They need to be cognizant of App Store’s ratio of Paid vs Free Apps and how much of Paid Apps (which means revenues) contribute to these download numbers that are reported.
This proliferation of Application Marketplaces is risking the creation of a major fragmentation in the Mobile Applications space. This phenomenon also runs the risk of pushing Operators more towards becoming “data pipes” than before.
Is this phenomenon doing more bad than good? Is this fragmentation risking the whole business model? Is there a need for the Operators and OEMs to come together to create a “common” platform for a “unified” App Store”?
I would like to hear your thoughts.
Comments
Hi,
I am working as a mobile application developer in a private concern.Currently i am working in iphone device.
The mobile market space is heading towards to compete each other.After iPhone device reach in international market,Google has started with single Android device but now there are lot of android devices in market.
Every one is trying to capture the mobile space.
As for as application store is concerned,it is required in my point of view.User can search and download the applications in one common place.Moreover developer's can easily deploy their application where user's are hitting.
Posted by: Sakthivel | December 27, 2009 07:08 AM
Sakthivel, Thanks for your comments. Yes, the mobile applications space is becoming increasingly competitive and every one (OEMs and Operators) is trying to make their mark.
With regards to the App Store itself, your point of view is that of a ideal scenario which we all would like to see. But in reality, with the number of App Stores that are coming up, there are more than one place for the consumers to go to and this is what is causing a lot of fragmentation and a bad end-user experience. Moreover, the publishing and app selection process itself is disparate with each of these app stores and this also causes the developers to drift towards those which can publish the apps quickly to the market without much hassles for the developers. Thanks.
Posted by: Sandeep Chandrasekar Seshadri | December 28, 2009 06:41 AM
I'm speaking as a consumer. Now, be it digital cameras, laptops, mp3 players or DVDs, we have enormous choices these days. However, each business tries to introduce its own format, interfaces, accessories and what not to safeguard their interest. There is no doubt cast on the value provided by these products. However, in the interest of a greener world and to minimize wastage of resources, why can businesses not benchmark their platforms against one another and choose the best platform (even if it is a competitor's platform) and develop innovations around that? If thats asking for too much, why dont we make products and services interoperable so that consumers are not forced to stick to a provider/throw away the product?
Once you have a common platform, customers are free to try out various options. They will obviously stick to services that map to their preferences. Also, there can be evaluating bodies that can now compare services between providers and guide consumers.
Now, are Nokia, Apple and Google ready to join hands and take this challenge? I hope they do someday!
Posted by: Ajay | January 8, 2010 11:48 AM
I agree that there is proliferation in Mobile Applications Space in terms of confusion this is creating in minds of both the consumer and the application developer. But then look at our physical world we are spoilt with choices. Today with so many retail formats, and so many brands for every product we have gotten used to it. Hence I dont think choices is as much of an issue. But what I do believe the issue is the way in which access to these services or applications is provided. In terms of provisioning applications that run on GPRS the problem will be to get the customer to buy GPRS service plans. The second step in this is to generate a need in the mind of the customer for such applications. Another concern that I share is with smart phones flooding the marketplace internet surfing on phone is becoming easier and simpler and altogether remove the need to visit separate mobile application stores.
These are my concerns success of the mobile application space.
Posted by: Minil | January 12, 2010 03:00 PM
Great thought Ajay.How it will be if we have one common platform where all the applications will run.
Surely some benchmark for distributing the application will be made in this case.
Moreover the user feel very easy to use all the applications.
Best example of this kind is "Yahoo Blueprint" .
* If we develop web applications using this framework we can distribute it to almost all the devices.
I feel very happy to participate in this kind of blogs and share our views.
Posted by: Sakthivel | January 14, 2010 05:42 AM
Thanks a lot for adding your comments. We are getting to see the benefits of the Web 2.0 right here in this blog!
Adopting a set of common standards and common technologies are all very interesting and it will be the most ideal world scenario from a Consumer Experience standpoint. However, the reality is that we are seeing a number of fragmented initiatives by so many Device Makers and Operators when it comes to Application Stores and Device platforms - which is what will cause all the confused experiences for the Developer as well as Customer. However, I believe this does not mean that there wont be attempts and initiatives to create a common working ground.
Industry bodies like GSMA and industry thought leader have expressed similar thoughts about the need for the Mobile industry to move beyond Open Source and Open Standards to what they termed "open innovation". In the last Mobile World Congress, some of the key note speakers addressed this issue of fragmentation and voiced the need for mobile companies to be sharing resources and tapping into each others’ technologies.
Common technologies, common platform and common standards will be good to drive interoperability of applications and services across device platforms and operator networks. However, it looks like, at least in the immediate future we will see lot more new devices, lot more competition and as a result lots more fragmentation. Because of this, I believe that fragmentation will remain the order of the day for much longer than we all want it to be!! I would like to hear your thoughts.
Posted by: Sandeep Chandrasekar Seshadri | January 16, 2010 02:36 AM