App stores on the rise, but not all as rosy as Apple’s cart

20 Jul 2010

With the iPad launching here on Friday and the iPhone 4 launching here just a week later, Irish app buyers will be spoiled for choice. It’s not surprising that the number of different app stores in the world is exploding.

But app store vendors have been warned the apps market is not as rosy as Apple would have you believe.

As network operators and vendors increasingly deploy their own dedicated app stores, a new Juniper Research report has found that the annual number of consumer-oriented handset downloads is expected to rise from less than 2.6 billion in 2009 to more than 25 billion in 2015.

According to the report, players across the mobile value chain are seeking to emulate Apple’s success with the App Store by launching own-brand storefronts, such as ‘Mobile Market’ from China Unicom, ‘Airtel App Central’ from Bharti and the ‘Apps & Games Shop’ on Vodafone 360.

Furthermore, the transition to an app-centric environment has also benefited more established storefronts such as GetJar, which passed 1 billion downloads earlier this month.

However, the Juniper report cautioned that players seeking to launch app stores would need to demonstrate sufficient scale to be able to induce developers to provide them with unique content.

As report author Dr Windsor Holden observed: “Apple has been able to achieve several billion downloads from a comparatively small handset base because customers are buying the iPhone for the apps. That’s not been the case with other handsets.

“So even if you have a subscriber base of tens of millions, your addressable market is a fraction of that – and spread across a variety of operating systems and handsets.”

The report also noted that freemium was becoming the prevalent business model, with publishers increasingly offering applications free at point of sale and subsequently monetising them via in-app billing of subscription-based services, upgrades to premium content or micropayments for virtual items.

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years