App store wars

By June 19, 2009Mobile

Every smartphone worthy of the name comes with an app store these days, but so far Apple’s is the only one that has been successful.  I would argue that there are a number of hygiene factors that Apple got right, and which some of the others have missed, but the critical success factors are a pre-integrated payment system (iTunes acounts) and trust.  Put another way Apple’s brand and history selling songs via iTunes were key to it’s success.

I am writing this today on the back of news that the app store for the Palm Pre (which they call the App Catalog) has achieved only 660,000 app downloads in its first twelve days and is on course for 1 million in the first month – a total which would put it at 1/60th of what Apple’s app store achieved in the same period.

As Techcrunch points out they got one of the hygiene factors wrong – most notably there are only 30 apps available and they have restricted availability of the developer SDK meaning the number is unlikely to grow quickly going forward.  I call this a hygiene factor as it is relatively easy to fix.  Having a pre-integrated payment system however, is really hard to fix.  The only remotely option available to companies like Palm is to cut deals mobile operator by mobile operator so that app charges appear on the bill, but cutting these deals this is a painful process.  That said it does at least have some chance of success, unlike the other option of asking consumers to enter their credit card details on their phones or put money into a mobile wallet, which has no chance of success, at least in my opinion.

Over the long run I think the solution will be a mobile payments system that operates with Paypal like simplicity and is independent of the device manufacturers and network operators.  Newly funded Boku might provide the answer in time, but it isn’t here yet.

The list of app stores I’m aware of is:

 

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  • Any smartphone OS vendor that isn't AAPL/GOOG just needs to cut an app store deal with Amazon. Payment system pre-integrated, etc.

  • Only one that's been successful? What about Nttdocomo, which started this whole app store business about a decade ago, making numerous Japanese devs celebs overnight? What about telenor?

    But I'm just nit-picking; you are right of course. And this is great for individual devs, startups and the consumer.

  • You're damn right and raise an interesting point: where's Amazon in all this?

  • [Relatively] innovative carriers can get it done. It's the handset/OS vendors who are generally screwing it up.

  • I know a couple of the people that should be using Amazon. They are so bitter about their are so burned by their mobile carrier relationships that they are making irrational decisions. They see greater strategic risk in ceding their App Store channel to Amazon than in having a pitiful App Store kill their smartphone businesses. Analysis FAIL.

    Mashery will get into these accounts and start fixing these developer programs before Amazon is let in to fix the stores. That makes me selfishly happy, but it's silly.

  • I think we will see some carriers screw it up as well – the noises out of T-Mobile in Germany are not encouraging. Good point re DoCoMo Jof

  • i'm not sure that i'd put tmobile.de in the relatively innovative category, so no surprise.

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