Friday, 29 May 2009

A word about app stores

By now we've all seen the news of Ovi going live this week. Undoubtedly there was a lot of talk about what Nokia was doing for better or for worse.

The last few weeks and months have seen a deluge of announcements from Blackberry App World, to Ovi, to Vodafone, to Qualcomm, to Carphone Wharehouse just to name a couple.

In fact there has been so much news that we're seriously wondering if investors, press and bloggers are starting to develop "app store fatigue" with all the news.

So what does this all mean at the end of the day? Let's look at it from the point of view of the two groups of consumers: Consumers and applications developers

From an applications developer most of what we've seen should be good news. Why? well simply that more stores opening mean more choices for developers and more channels to market. Given my background I always use soft drink analogies. Why are Coke and Pepsi universal brands? Partially because they are universally available. From supermarkets to mom & pop stores to kiosks to fast food restaurants you can find Coke and Pepsi nearly anywhere. When I was at pepsi we use to laugh that in many parts of the world you can find soft drinks more readily available then water. Food for thought ;)

Apps should follow a similar logic though. If you think of the consumption pattern of consumers apps are simple mobile "snacks". Whether it's a game, instant message applications or a horoscope app it's something you do with your spare time, in short bursts and it's disposable. In fact market research I've seen shows that many apps on average only have a 3-4 week lifespans on a consumers handset until they get replaced by something else.

So in effect, apps are almost like fast moving consumer goods (FMCG's). Quickly consumed and quickly disposed off. So by default they should be simple to find and should almost everywhere. They should also be very cheap (or free) and quick to download and easy to learn how to use.

So in that sense more stores is good news for both developers and consumers. For developers it means:

a) More routes to market
b) More volume --> more revenue
c) More choice aside from traditional operator portals
d) better learning. Different channels will behave differently and target slightly different users in different markets so developers should benefit from having more data about the consumption of their apps across a great variety of geographies, target audience and channels.

Most importantly for developers though: all this noise about stores means greater consumer awareness about apps. If you look at GetJar for example our downloads increased by 300% in the last 12 months since Apple launched it's app store. People all over the place and feeling the effect. Inevitably people who might not have an iPhone will ask: "can't my phone run apps?"

So what does this mean for consumers? Well a couple of things:

a) more choice. The boom has created a gold rush as developers rush to create the latest hit.
b) more quality apps. As more and more apps hit the market differentiation will be critical. with most if not all app stores offering reviews of their apps, poorly designed apps will be consigned to the digital trashcan of time within days.
c) more value. A benefit for consumers and maybe a curse of developers and brand owners. Open market systems like the App store will allow developers to set their own prices. Either through lack of marketing training, greed or shortsightedness many developers will cut price in an effort to get volume. Ultimately consumers will be the winners
d) apps for the masses! Yes, unbelievably it's true but one thing is often neglected when talking about apps: they can run today on the majority of handsets and not just smartphones. At GetJar for example smartphones are an important part of our downloads but in no market do they make up more then 60% of our downloads. Actually in most developing markets they make less then 20-30% of the traffic. For many people in markets like Indonesia, Brazil or Pakistan apps are perhaps the first pieces of software they have ever really experienced.

So on average I'd say both developers and consumers benefit from the surge in app stores. time will tell which survive and which don't. Catch my next blogg where I'll discuss what i think makes a good app store ;)

have a great weekend,