App Stores: The New Big ThingFriday, February 13, 2009
When the iPhone was launched, it was already more than just a phone. It was an end-to-end ecosystem that communicated with the Apple iTunes portal. A number of IPKs (iPhone Killers) soon found their way into the market but most of them were simply devices without the end-to-end ecosystem. Customers were responsible for creating their own ecosystems and in many cases this was tough to do.
Then came the next shoe from Apple with the Apple App Store where you can browse thousands of applications, some that are free, some that are inexpensive, and some that have heftier price tags. Prior to this, most applications were available through network operators' storefronts or various distribution companies. The Apple App Store was the first device-specific applications store and it certainly started a trend.
Google's Android has an apps store, RIM is launching its own BlackBerry app store, and Nokia is reportedly not far behind, although you might consider its end-to-end music offering as its first foray into the app store business. There have been app stores available via third parties such as Handango for a long time, and Cellmania ran what might be the first app store for wireless devices in the early days of the WAP browser.
According to sources, the BlackBerry app store, which launches next month, will provide device and network-specific applications, while another store known as the BerryStore has offerings designed to run on most BlackBerrys across most networks. The BerryStore is still in beta but a visit to the store says that to make use of it I have to download its web url to my BlackBerry (m.berrystore.com), which means I probably won't use it. I want to be able to browse the contents of a store on my computer, and I really want to be able to view and experiment with an application on my desktop or notebook before downloading it to my device.
The Apple Apps Store seems to at least give me the ability to find an application or category of software on the desktop. This is probably a good thing since Apple is now claiming more than 15,000 applications in its store and trying to find what I might want to download to my iPhone, if I had an iPhone, could be a daunting task. The Android Market is more open, or at least that is how it has started out. There is no application verification and it is possible that poorly-coded apps could easily find their way onto the site. Google has said it intends to intervene to make sure this is not the case, but from my observations, it is not clear if I will be able to use my desktop to find the applications I want.
App stores are important for several reasons. First, consumers want to be able to find applications for their smartphones and know the software has been verified by the handset vendor, or at least has been tested by someone prior to its release to a site. The other benefactors of these stores are software developers, network operators, and companies running the stores. In fact, many of these app stores use the Qualcomm Brew model. This model has been around for a number of years and, typically, developers who write Brew applications have been making serious money for a long time.
This is because the BREW system was the first ecosystem for mobile software. To participate, you have to join the BREW developers group, write your code, and submit it to Qualcomm for testing and certification. Then it is placed on BREW servers, located either at Qualcomm to serve the smaller networks or installed in the network's backend. In either event, the revenue division is pre-determined with the network operator, Qualcomm, and the developer all receiving a share. (It has been a mystery to me for a long time why Sun has not used this model for its Java applications to help its developers make money.)
The app stores pretty much follow this business model, except that the applications are not sitting on a network operator's servers but rather on servers that belong to the store owner that, in most cases, can be reached via most wireless networks. The smart store operators are not only working out payment plans for the entire ecosystem, they are giving careful consideration to how the stores are organized, the ability to search for certain types of software, and the description of that software.
There are more app stores on their way. Microsoft is preparing to launch one, the details of Nokia's store will be announced at the Mobile World Congress, and a number of other stores are still in stealth mode, some of which will come to light in Barcelona. One app store that is still in stealth mode won't be phone-specific, offering software across a wide range of smartphones in a specific segment of the market. My understanding is that potential customers will be able to experiment with the software on a smartphone mockup on a computer prior to downloading it to the device.
It is clear that app stores are here to stay. What is not clear is if what happened to most network operators will happen to the app stores. Several years ago, there were so many apps on most network operators' servers that is was difficult to find one you might want. Since then, a number of operators have revamped their search capabilities and begun providing the ability to see like items or other applications related to the one in the search. For example, when you search for a ringtone, you now get to see wallpaper, audio, and video for the artist whose ringtone you are interested in.
To me, the best news is that we are beginning to see some really good applications that do not require customers to browse the web on a mobile device. Many have clients that are installed on the handheld that interact with the information, which makes them viable mobile applications. As more developers learn how to write applications that are better suited for small screens and keyboards, the less we will have to rely on web browsing and the more likely wireless customers will be to take the plunge into the world of wireless data.
Andrew M. Seybold