opinion


Lessons to learn from Apple’s App Store

 
 
 
 
The rest of the mobile industry could learn a valuable lesson from newcomer Apple, as the App Store takes the mobile content and apps market by storm.

Analysts at the Daiwa Institute of Research this week said that the introduction of the App Store in the iPhone 2.0 platform represents a compelling reason for high end mobile subscribers to sign up for the device.

European telecoms analyst and sector strategist at Daiwa, Michael Kovacocy, told telecoms.com the beauty of Apple’s App Store is that all apps are standardised for a specific operating environment. “Opening this up to 3rd party development allows for a potentially rich user experience (plenty of apps) – but with a “guaranteed” look and feel and download process. In my experience, nothing quite comes close,” he said.

Earlier this week, UK-based GetJar, which claims to be “the world’s biggest mobile applications portal,” said it had surpassed the 300 million downloads mark since its founding in 2004. The company claims over 12 million downloads per month, and while Apple’s App Store approached this figure in its first weekend of operation, the level of activity is likely to settle at something much lower.

While Apple’s offering targets a niche but ‘captive’ audience, GetJar is targeting the other billions of mobile users with Java, Symbian, Windows Mobile or Flash Lite-compatible handsets. Some premium brands such as Google, Yahoo! and Opera, already use the aggregator to shift their apps.

But the big difference is that GetJar is pitching its wares to a very fragmented market and Kovacocy notes that companies playing the game GetJar is playing will find it hard to compete with Apple.

“The difficulty with getting a good user experience (both from distribution to use) with applications across all these platforms is nearly insurmountable, in my opinion. And the cost of building to try to allow this good user experience across a myriad of Java handsets along with Symbian, MS Mobile, etc. is prohibitive – the business models just don’t make much sense,” Kovacocy said.

This is an issue that has long been discussed in the industry – the biggest problem developers encounter is how to get PC content onto mobile platforms X, Y, and Z. Because of the diverse nature of the handset environment, content providers and carriers have a real headache just getting services and applications into the hands of users.

The other bugbear is the users themselves – most normal users just don’t have the inclination or the ability to install apps, leaving no volume to pay back the development costs.

And this is where Apple comes up trumps. Although the company is treading on the sacrosanct territory of operators’ billing relationship with their customers, by imposing an alternative way of paying for content (there is speculation carriers get a kickback from Apple for this), none of its telecoms rivals have the head start that Apple has in digital content downloads and payments, in the shape of iTunes.

AS Daiwa’s Kovacocy notes, with the iPhone App Store Apple has delivered, “one operating system/device to build to, a market (granted currently niche) of ‘captive’ customers to sell to, and a user experience that encourages downloading and usage of applications. Apple has a winner, we believe,” he said.


5 comments

  1. Synthmeister 21/08/2008 @ 3:25 pm

    “The company claims over 12 million downloads per month, and while Apple’s App Store approached this figure in its first weekend of operation, the level of activity is likely to settle at something much lower.”

    I seriously doubt this statement. The iPhone is going from about 15 countries when the app store opened to over 70 countries by the end of the year—and this doesn’t include the potential of China and Russia!
    The potential market for iPhones is going from around 150 million people to about 600 million people! Large corporations are now seriously considering buying iPhones in bulk!

    You are also forgetting about the iPod touch which can also use most of the same apps. Rumor has it that this device will receive an upgrade in time for the Christmas season and the touch is not limited by country, carrier or retail outlets. You can buy them at Walmart for goodness sake! If Apple comes out with a $199 touch, watch out Nintendo DS and PSP. An excellent poratble gaming rig which also has internet, movies, music, email, gps, voip, text messaging, etc. etc. and the games will only cost $10 – 20 as opposed to $30 – $40.

    There will be no slowdown in the App store for 3 to 5 years. MicroSoft, Palm, Nokia, RIM and Sony have frittered away a 10 year head start and right now Apple looks like Usain Bolt at a high school track meet. GetJar’s 300 million downloads since 2004, will seem laughable in a year.

  2. Cristobal Alonso 21/08/2008 @ 6:25 pm

    One thing is the potential market and other very different is how many people is going to buy it. Beyond the 15 countries where the iPhone is present today the iphone niche segment is smaller and smaller. And yes they have created a powerful hardware/software combination but this is “easy” for one device but will always be a niche market

    THere will always be 95% of customers that don’t have an iphone or apple product so how do you sell and optimize the user experience for those? That is the big question in my opinion? Some of the large mobile operators are playing with mobile clients which could be an answer although there is a high entry barrier which is getting the client being downloaded (because embedded mains higher costs and maintaining subsidies) by customers. And many more initiatives to come.

    The jury is out

  3. Constable Odo 22/08/2008 @ 4:33 am

    I don’t know why GetJar believes that there will be a slowdown at the App Store, either. iPhone production rate is growing very rapidly along with the introduction of new apps and global releases. Hardly anyone is scared to download iPhone apps and games. The Christmas season is coming up and iPhone sales should explode along with App Store downloads. By the middle of next year there should be about 30 million iPhones in user’s hands around the globe.

    I’m expecting an enhanced iPod Touch to take advantage of gaming apps. I really don’t foresee a slackening of downloads over the next year or so due to the high growth rate of software for the App Store. It’s been a month or so and apps numbers have grown almost five times. A year from now it should easily reach about 10,000 apps.

  4. Jim Washok 22/08/2008 @ 9:44 am

    In today’s article, “Lessons to learn from Apple’s App Store,” the following is stated…
    “[GetJar] claims over 12 million downloads per month, and while Apple’s App Store approached this figure in its first weekend of operation, the level of activity is likely to settle at something much lower.”

    I just wanted to counter with the thought that the volume of downloads from Apple’s App Store will actually probably increase from the 60 million in the first month due to a half dozen factors:

    The number of apps at time of launch on July 11th was only 500 and is now over 2100…more apps available results in more downloads

    Available apps are increasing in functionality and value as developers have more time to better understand the programming platform, device capabilities and user expectations to make more purposeful apps
    The purchase rate of iPhones remains extremely high. They quickly became unavailable due to the unexpected initial demand and remained largely unavailable for over two weeks. With availability picking back up and they buying frenzy still in place, more apps will be downloaded.
    The iPhone’s launch to 20 more countries this week…and eventually 1 or 2 more batches country deployments until available in all 70 countries that have signed on
    Upcoming OS improvements that will increase capabilities, such as the app push notification capability in September
    It’s likely all but certain that a new model of iPhone will be revealed in 1st quarter next year and available in August 09 given the apparent 13 month new release cycle…likely with significant hardware and software improvements that will only further strengthen application possibilities.

    I wouldn’t be surprised to see at least a 25% increase in reported app downloads in the second month of the iPhone 3G’s existence over the 60 million downloads of the first month.

  5. Viswakarma 26/08/2008 @ 5:47 pm

    It should be very clear by now that Apple creates and enhances new markets!!!

    While Microsoft and others cling on to their “accidental empires”. Empires rise and fall!!!

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