Not so long ago, if someone asked you where you downloaded that app from, you were likely to respond with either A) Apple’s App Store or B) Android Market. Sure, feature phones were downloading gazillions of pieces of content and apps from places like GetJar, but the iOS and Android catalogs were the application mega-stores of the recent past. This, some surmised, was the face of a “mature” mobile application market.
Then along came Amazon with its Application Store for Android. Barnes & Noble announced a curated app store for its Nook Color customers, and a number of smaller outposts have begun gaining recognition. On the carrier side of things, Verizon’s V Cast Store gets real estate on a bunch of its handsets, while AT&T’s AppCenter is also pitched as a source for apps and mobile content.
The fragmentation of mobile application stores may not be such a bad sign – in fact, it could be a sign that Android is still realizing the possibilities inherent in an open platform. While Apple will likely maintain is closed ecosystem, selling high-end devices to users whose content is forever trapped within iTunes, Android, with its policy of “Open for Business,” will continue to open its doors to all comers, and that means a proliferation of app stores of all shapes and sizes.
Here’s a look at the increasingly varied way Android customers are procuring software for their smartphones. To be sure, there are a lot of advantages, as well some hardships, to life out there on the “open range.”
The “Country Store” of App Markets
Dov Cohn, vice president of marketing and products for Appia, a white-label app store solution being employed by companies like Opera and Dell, says third-party app stores allow developers, as well as channel partners, to reach consumers in more targeted ways than the bigger entities.
“Third-party app stores allow different ways to segment and satisfy customer needs. That could mean something as ‘nichey’ as only-game app stores or only-entertainment app stores,” Cohn says.
Appia recently deployed an application store for Opera, which is open to users of Opera’s desktop and mobile browsers. Cohn says Opera is then able to offer its users, who it knows a lot about, a tailored experience, including unique apps and promotions that may not be available at the larger stores.
While Cohn says he has always admired Apple’s App Store, it has one downside. “They have no way for developers to market their apps,” he says, adding that when developers can’t make their apps seen, customers lose out because the vast majority of apps are three or four clicks deep.
Cohn says the proliferation of smaller outlets just increases choice for customers, adding that many smaller app stores like those the company has curated for hardware manufacturers like Dell come with a built-in clientele.
“They already have consumer relationships with millions of people who are already touching their brand on their phones and devices,” Cohn says.
The Carrier-Branded App Store
Carriers, always struggling to fight off the “dumb pipe” label, have a vested interest in providing their users with unique content through their own channels. With the App Store and Android Market, the carriers are left out of the picture. While the carriers’ recent push to get the Wholesale Applications Community (WAC) project up and running is at least a step in the right direction, critics cast a wary eye towards such idealistic endeavors. Providing content never has been an easy road for carriers. Detractors of carrier-branded stores argue that providers should stick to what they know: connectivity.
Still, the carriers have to at least make an attempt a play at a market that strengthens customer stickiness, drives brand awareness and could potentially be a revenue generator. Verizon Wireless’ V Cast Apps store is still going strong. The company currently offers V Cast apps on about 20 handsets, including its most recent LTE-capable models.
Not surprisingly, V Cast is aimed at bringing customers some of the things the larger catalogs just can’t offer. “The goal is not to have the most apps through the store, but to focus on high-quality apps that customers want and want to use,” says Verizon Wireless spokeswoman Debra Lewis.
Lewis notes that there are even some advantages for developers with this kind of app store. “They can select on which devices they want to have their apps appear. For example, if there’s a video-intensive app that might be a better experience on 4G, developers can distribute only on 4G phones, and we have always offered carrier billing through V Cast Apps,” she says.
V Cast may be one of the more notable carrier app stores, while others are fading into the woodwork. Critics of how the carriers have approached the content game say that they’ve missed the boat.
George Appling, who focuses on the telecom business and is a partner with consulting firm Booz & Company, acknowledges that carriers have tried to make a play at providing content such as apps but says they’re just too late to the party.
Appling says he thought it was probably disingenuous for AT&T to claim security was at the heart of its hesitation to allow users to download apps from third-party stores, specifically Amazon’s Application Store for Android.
“The big carrier like AT&T wants their app store to be front and center in the user experience,” he says. “But I think they know they’ve lost and they’re dragging their feet in allowing people to download their content from other sources until they can find a way to do it better.”
Appling believes the carriers will not be cut entirely from the Android revenue stream –carriers currently take a 30 percent cut from Android apps sold over their networks – and he says they’ll at least try to make a comeback, but he’s not optimistic.
“It wouldn’t surprise me if they try to make some kind of comeback, but I think they’ve lost… We have and will continue to have this myriad of app stores, but the overwhelming majority of them are irrelevant,” Appling says.
Appling predicts a huge disruption coming in which one brand name will bring the whole package together. With wildcards like LightSquared looming on the horizon, he says that a retailer that can bring together the content with the hardware and the connectivity could change the game completely.
“Amazon may just pull off a devastating value proposition,” he says. “Namely, ‘We offer all the carriers, all the phones and all the apps. We’ll make transitions easy via our cloud storage, the price is right and we’re on your side so we’ll tell you the truth.'”
Miro Takes the Next Step
While fragmentation of application stores can be seen as more choice, it also can be a confusing trial for the uninitiated Android user. The benefit of a tightly controlled OS like Apple is a consumer knows what to expect: hit the iTunes button and buy an app.
Nicholas Reville, co-founder and executive director of Miro, a non-profit company that makes an open-sourced desktop-based content management platform, says Android has long needed an iTunes-like solution for the downloading, organizing and syncing of content and apps.
“We really set out to show the world that ‘open’ can be as integrated and smooth as any closed system. We’re looking at the landscape, where you have millions of people using Android devices that are still running iTunes on their desktop,” Reville says, noting the ironic nature of that situation.
What the company came up with is a quality desktop solution that acts very much like iTunes, offering Android users, as well as other platforms, what Reville calls “the whole package.” Miro’s recently released 4.0 version expands the company’s product from a mere video manager to a one-stop, fully syncing content-management solution. From within it, users can seamlessly download and purchase apps, as well as many other types of content (mainly video and music), from a variety of stores.
Reville says he hoped that Miro was creating the experience for Android users that would really complete the story. “It’s important for Android users to be able to say you can get your apps, media, sync all in one spot. We felt like getting to that feeling of completeness was important, especially if you’re going to ask people to move out of the iTunes environment.”
It was the safety and ubiquitous nature of iTunes that Reville says has driven Apple’s hardware. He calls iTunes Apple’s secret weapon. “I kind of think of iTunes as the glue that binds customers to Apple devices. When you bought an iPod, you knew before you even bought it that you were going to be downloading music from iTunes. There just hasn’t been anything like that for Android until now,” he says.
The implications of this kind of system for Android users can’t be overestimated. Reville says that because Miro is completely open-sourced, almost any third-party app store will work with it. Gone are the days of buying all your apps from the Android Market. Instead, users can purchase apps from Amazon Application Store for Android, or Android Market or GetJar right from Miro – kind of like iTunes but with more than one app store.
Gartner estimates that worldwide mobile application store downloads will reach 17.7 billion downloads in 2011, a 117 percent increase from an estimated 8.2 billion downloads in 2010.
Much of that will undoubtedly come from the App Store and Android Market, the respective Macy’s and Sears of the mobile business. Like any business that exists in a capitalist society, it will be a battle to see if the small town shop on Main Street can survive the massive multi-national conglomerates.