Wednesday, September 17, 2008

How Many App Stores Does The World Need?

Can anyone replicate the success of the Apple iTunes App Store? Plenty are trying in the standard 'me too' world of the press release and the 'visionary' VC, but have they a hope in hell?

Arguably, Apple have only managed to be successful with wireless applications because they have tethered them to the PC, requiring cable-based syncing from a desktop app in much the same way that the geekier mobile customers have been doing with GetJar and Handango for years. Heaven forbid a user might want to bypass the desktop tether – that's not what the wireless experience is about, after all.

They can only do this for two reasons – the device treats apps as first class citizens in the very simple UI structure, encouraging use, and because iTunes already existed as an essential part of the handset's infrastructure. iTunes existed long before the iPhone and its App Store, and for a very compelling reason – a music player is no good without music, and digital music is the sort of content that must be synced between a player and a bigger storage system, which means a desktop computer. Apple executed both the hardware and the software well at a critical turning point in the market, and now owns that market (though arguably iTunes is only a so-so music management tool, and took ages to sell very much).

Wither the recent app stores, then, without this strong heritage and compelling existing service to piggyback on?

Blackberry may have a chance. Much like the iPhone, Blackberry users are a very loyal niche in the marketplace with very specific needs, cash rich and tied to their devices. As a glorified email machine, it is tied to the desktop and there are existing mechanisms for corporate rollout of apps etc, along with a well known and easy to use development system (OK, it's god awful for developers, but it is possible to write apps with minimal fuss).

Microsoft have dropped the ball for so long it has probably rolled off somewhere and can't be picked up again. The platform is buried under custom UIs these days, and has no coherent customer base, pushed on the one hand to US business users and on the other to PAYG users as own-brand operator handsets like the SPV, the XDA etc. Seems a remote forlorn hope an app store would in any way revive it, even though the desktop sync experience can be better than average for contacts and the like.

Android has no users. One day that will change, but by how many? Hard to say right now.

The rest probably won't be seeing iTunes App Store numbers, ever.

The operators hurriedly announcing app stores are making non-announcements, they have had app stores for ever in the form of their stifling content portals. They can send out BREW or Java apps just as well as they can send out games, and in many cases have been doing so. They have long been poor at content discovery and they serve a wide range of devices which most developers can't effectively address (though it is quite possible to do so if you know what you are doing).

The handset manufacturers probably will try and compete, probably by rehashing their current game portals, which do very little business as far as I am aware. Buys them a press release but not much more.

Nokia are the obvious exception here, as they have been aggressively pursuing a service strategy in the form of Ovi, and they have enormous market share (a lower percentage than Apple's iPods, but vastly more shipped units). Could Nokia emulate iTunes in this respect?

It is possible. They could. But they won't.

Apple has sold primarily music devices – the iPhone is an extension of this, and probably some users don't use it much for music (or video and other media consumption), but even if they don't those same users must still use iTunes to update firmware, and just to charge the battery over the USB cable. Apple have managed to make firmware updates so simple users actually don't mind doing them, something Nokia has never managed despite some serious effort, releasing firmware so buggy it's amazing any user could stand to use it without an upgrade – 6600 anyone? So we can probably concede that most users of the iPhone will have synced at least a little music with it, and will probably have been familiar with iTunes from their iPods even if not – very few non-technical grannies bought iPhones, but plenty have bought Nokias (mine, for example). The App Store then becomes a natural extension of this default behaviour.

Nokia has sold plenty of music players, just like it has sold plenty of cameras and GPS units. I have some. I've personally barely used the camera on my phone and never used the other features, however, and I suspect I am not alone in this (though many consider me to be somewhat akin to the Amish in this respect). You buy a Nokia because they used to be easy to use, and you naively hope they still are. Or because you tried a Motorola once and suddenly realised even the new Nokias aren't that bad. Why would you sync with your PC? It's just a communications device, often supplied without a data cable, and one which is very unrewarding to sync with (though it has got better). You can (and should) back up your contacts, but the number of Facebook “I've lost my phone, please send me your contact details” groups I have seen suggests many people don't. There's no driver like there was with iTunes, and retro fitting one to leverage even new handset sales will be an immense challenge that requires considerable more focus than Nokia have thus brought to bear.

A closed iTunes clone will not work. As discussed, there is not enough compelling reason to use it. It will be forever niche, and a small unprofitable niche probably.

What Nokia could try and embrace is a fully open system – turning Ovi into an iTunes equivalent which is better, easier to use and works with any device from low-end Nokia through Samsungs, Lgs, Motorolas (do they still exist) and even including iPhones. Seamless out of the box syncing, via cable or OTA. No stupid constraints. Fully integrating and working alongside popular web services, instead of replacing them. Open to all developers with a clear revenue stream and good support.

Exactly the approach they are not taking, in fact, preferring awkward me-too software replicating every function that already exists, in a closed and inferior way. I won't change my calendar system because I bought a new Nokia, but I might actually bother to sync my calendar to my phone for the first time ever if I plug in a USB cable and it just happens. Nokia don't appear to know this, and until they do they will fail.

In turbulent times such as these, I think investing in a million App Stores is completely foolhardy – so if you are considering it, don't, you're better off following the Motley Fool's advice to “buy shares in companies that sell cheap alcoholic beverages, and pubs. They always storm in with good returns when the economy goes t*ts-up!”. Really.


Anonymous Anonymous said...

I dont get this post. Are you saying that Apple's appstore is first and last that should never exists? FYI there has been appstores already before apple like nokia software market. Also operators have their own ones.

5:41 am

Blogger raddedas said...

Sorry if my writing was unclear. I mention in the post a number of other existing app stores which predate the Apple one, including those from the operators. I have worked with most of them.

They all predate the Apple App store and they all have one thing in common - they weren't particularly successful. Some have made enough money to survive but none has trumpeted millions of dollars in sales per month.

Apple are currently generating loads of hype around the success of their store, and that has led to lots of me-too announcements from the other players - I was simply commenting on why I thought the Apple store was successful, and why it would be very difficult for others to replicate that success - however much I, as a mobile application developer with many years experience, hope that they can.

10:50 am

Anonymous Anonymous said...

I agree with most of this post. Mobile software download portals have been around for years, but now everyone wants to rebrand theirs as an 'App Store'... Perhaps Google have the clout and reach to replicate Apple's success, if Android phones take off.

The iPhone and the Apple app store are also a bit different as many people are already sold on the whole Apple experience. And they control the hardware, the OS and they don't have to worry about fragmentation. If Nokia were to make an iTunes equivalent covering the scope you suggest, they would have to deal with all the different OS's and other fragmentation.

Having said all that, I think the plethora of App Stores shows a new optimism about mobile software following Apple's success. I personally feel this optimism is justified and so 'App Stores' will be seeing more traffic...

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