The Future of Apps Stores - MDA/KTN conference
December 2009: The Mobile Data Associaton (MDA) and the Digital Communications Knowledge Transfer Network (DCKTN) co-hosted a conference centred on the topic of Mobile Apps Stores (Dec 2 2009).
The MDA invited reps from all sides of the equation (research, development, networks, manufacturers and independent providers) to generate opinions from different zones of the mobile eco-system.
With the mobile industry seeking to capitalise in a dramatic surge of interest in mobile applications, this free-to-attend seminar gave those at the development coalface the chance to share key insights within the industry.
The lead questions were whether Mobile Applications and Applications’ Storefronts are the great bandwagon which all mobile data specialists should be leaping aboard, or is their appeal and lifespan limited?
The event proved to be very popular event, and was substantially oversubscribed with standing room only on the balcony! And even after some 5 hours there were still c 80% of all delegates there. The attendance just goes to prove the enormous industry appetite for ‘Apps’ and what they will mean in a commercial sense over the next couple of years.
Comment
Probably the biggest three issues facing Apps Stores from a developer (and in the long run, user) perspective are Fragmentation, Discoverability and Revenue Models.
Fragmentation
Broadly, there are three types of Apps Stores
- Manufacturer Stores
- Network Stores
- Independent Stores
The most successful Apps stores of the moment are the manufacturer Apps stores – well actually, Apple really (Apple has 1% of handset market but 45% of all Apps downloads). The other major manufacturer stores being Google Marketplace (on Android handsets) and Nokia’s Ovi store.
Then there are the Network Apps stores – Voda 360, the recently announced Orange App Store, O2 will push their offer now that iPhone exclusivity has passed.
Finally there are independent Apps stores – it was felt that these would possibly serve their own niches, stores serving particular user-bases or product types.
For developers, the question is who do they build Apps for?
There is no common platform or SDK, currently, that enables the creation of apps that can sit across all platforms. There is no immediate prospect for this either as the major players (be they manufacturers or networks) show little inclination to move away from the ‘walled garden’ approach that has been their milieu for many years now.
Therefore cross-platform reach can only be achieved at 4 or 5 times the developer resource cost of a single platform app. A developer will then look for the platform in which they have the greatest upside for sales (in case of paid-apps) or reach (in case of free-apps). In both of these environments Apple, currently, has a huge advantage. Apple operates the most walled of walled gardens and, whilst the Apple SDK is a widely-approved-of series of tools, the approvals process is considered by many to be slow and rather opaque in its rules.
There was, I felt, a common desire on the day to see Android and Marketplace prove themselves and provide a viable competitor to Apple in the Apps market. There did seem to be greater openness to this than to the Network/Manufacturer propositions of Vodafone and Nokia both of whom seem to suffer from underlying, and probably long-term, audience frustration. The causes of these frustrations and scepticism may well be a result of historic dissatisfaction at these mobile behemoth’s policies and approaches rather than wholly to do with their approach to Apps right now.
Discoverability
The ability for a user to ‘discover’ or find an App is key and tricky given that a screen will only show 5-25 or so Apps in a single view/search and there are c 100,000 apps on the Apple App Store. Even the Ovi store with c 5,000 Apps (currently downloading 1M per day!) will suffer from this issue – although to a far less extent than the App Store, currently.
It may well be that Mobile Discoverability will become its own business sector in a similar way to SEO – much will depend on the Apps Stores themselves and how they elect to prioritise presentation and commercials underpinning that series of rules. Outside of that, use of social media tools, virals, etc. will be key.
Getting Paid
There are a huge number of free Apps in Apps Stores (Nokia quote c 80% of all Apps on Ovi were free Apps). The proportion of paid-for download in Apple’s store was higher partly because of the comfort and ease of the purchase mechanism (as all users are required to have an iTunes account in order to turn on their iPhone). The routes to getting paid on an App were
- Client or sponsor payment
- User payment (for paid-for Apps)
- Micro-billing for content/product/service within Apps
- Mobile Ad-serving and ad-funded models
Of these, imaginative use of micro-billing and identification of elements that provide sufficient user-value to warrant charging is probably the element that could provide the most upside. The size of the potential Mobile Ad market is also well documented and will grow hugely as the reach of all-you-can-eat data tariffs prevail
The speakers at this event were:
Stuart Godfree (mkodo), mobile platform and service provider Dr. Windsor Holden (Juniper Research), Industry reaserch Amer Hasan (Vodafone), discussing the new Voda360 approach to the app store David Lane (BrightAI), an independent, cross-platform, developer Lilo Neste (Materna), independent app store provider Keith Varty (Nokia), expansion of the OVI Store and OVI Maps Katie Lips (Little World Gifts), panel chair
