Mobile Application Stores Change the Game

For years the availability of applications on mobile devices was determined by a handful of executives at wireless companies. They choose what apps got the penthouse placement of being placed on the carriers’ mobile web portal. Placement on the “home-deck” was the Holy Grail for every business development executive.

In recent years, off-deck players have made significant in roads, especially in the ring tone market. The explosion of premium and non-premium SMS services has done much to level the playing field. Marketers such as Dada, Thumbplay and Jamster spend millions promoting their mobile services on the Web, Television and Print media. They acquire customers by having them enter a 5 or 6 digit SMS address on their phones.

This industry model has been busted thanks to the Apple App store, with an earlier assist by Qualcomm.

images-1Qualcomm had the first app store in the U.S. with its BREW (Binary Run-time Environment for Wireless). Qualcomm aggregated applications with their partners (Verizon and Alltel), certified their quality and populated the handset downloadable application environments. Issues in their initial attempt at an app store were: discoverability of applications (Search), placement on handsets that were not optimized for high-end applications, and most importantly a lack of compelling applications. The on-boarding process of developing an application for their platform, having it approved by Qualcomm, then having it approved by the wireless carrier for actual placement was a slow and cumbersome process. In short, it was a telecom-oriented process, not a rapid Internet style process. It was a good start.

Apple took off where Qualcomm fell off,

The iPhone device is capable of sophisticated, compelling and very cool applications. There are thousand’s of applications. They range from business, to gaming, to social networking and to the regrettably ever-popular iPhone fart app.

The application availability and media utility of the iPhone is more than compensating for the shortcomings of the actual phone.

Apple does not select applications. They let the market choose. Their strategy is to allow a thousands of applications to be deployed knowing you may have a handful of winners.

This strategy is very similar to the path taken by Facebook. There are now several college courses that require the creation of a working Facebook application as a class assignment. Wow! That’s the definition of mainstream.

android_logo_t-mobileThe iPhone app store model is being copied by T-mobile and their Android(Google Phone) product. Last week Blackberry announced that they are following suit with a similar app store. Application stores are also available for the Palm,and the Symbian platforms. Not to be out done, Samsung , Windows mobile and Nokia have plans for their own applications stores. How soon will it be before consumers refuse to have a device that is not connected to a rich app store?

1812250This is another catalyst for the perfect storm of device and applications that I wrote about last year. The combination of the large screen devices, with powerful processing capabilities, on wireless networks with high data services, coupled with open 3rd party accessible application stores and developers that really understand the consumer experience, defines the new value chain for mobile applications.

 

These factors, coupled with a growing awareness and expertise with social marketing, will make the next generation of mobile services a quantum leap over what we have seen to date.

This is really going to be amazing!

Markets are great at creative destruction of the old. The players in the previous market model with either adapt and become major or app store players, or die.

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4 Comments

Filed under android, Apple, blackberry, facebook, Google, iphone, mobile, Mobile Application Stores, mobile commerce, social networking, wireless

4 responses to “Mobile Application Stores Change the Game

  1. Sam G

    All well and good…but where’s the money in the new value chain ? Aside from per-download or subscription payments for music/ringtone downloads, can the pricing be set sufficiently low to attract consumers yet able to yield enough ROI for the developer, content owner, aggregators/distributors, mobile operators etc. so that the consumer won’t be burdened with ads to pay for all this “cool” stuff?

  2. Though Apple succeeded with its App Store, I am skeptical that others who are jumping into this space will get the same success. Apple has spent years cultivating its store. The iTunes store was launched before the first iPod. Microsoft’s Zune marketplace, in contrast, still lags Walmart.

    I agree with your view that consumers want great devices connected to rich app stores, but would speculate that companies like Amazon are more likely to succeed in building such stores than Samsung, Nokia and Microsoft.

  3. Interesting – I should have considered Amazon as a potential major player in this space. You are right