Mobile Apps are the New Black
Following almost two years of nothing but positive media coverage – from the outlandish predictions ahead of launch, to the army of live bloggers at 2007's Macworld, to the endless stream of rave reviews – the reputation of the ubiquitous iPhone has been tainted in recent weeks after a glitchy second coming. Yet despite this, and reports of his untimely passing last week, Steve Jobs has a new reason to be happy – the App Store.
The first iteration of the iPhone was a revelation. With its large screen and intuitive user interface, not to mention Apple's uncompromising pitch to network operators, the device turned the industry on its head. It placed the emphasis firmly on user experience, focussing consumer interest on the device, and the content it enabled, rather than the price of minutes and texts.
The release of the iPhone 3G in July 2008 was greeted with a similar fever pitch – queuing on Fifth Avenue for a week, anyone? But since then, it hasn't been the device itself that's made the ripples – it's been the App Store that came with it.
Indeed, considering its predecessor had achieved near sacred cow status, the iPhone 3G has already come up against its fair share of criticism. There's been the outages of new synch service, MobileMe, several mysterious firmware updates designed to fix unnamed bugs, and ongoing problems with 3G coverage – the cause of which, after much debate, seems to be the device's power control.
Meanwhile, the UK's Advertising Standards Agency banned an Apple TV ad last week, which claimed that "all the parts of the internet are on the iPhone", after two complainants pointed out that the device doesn't support Java nor Flash – rendering a vast swathe of the Web out of bounds.
The App Store is more than making up for the bad press, however, and already looks set to do for mobile content what iTunes did for digital music – bring it to the masses.
Coupled with the previously released iPhone SDK, the App Store heralds a shift in the balance of power between the three traditional stakeholders in the mobile content value chain – operators, handset manufacturers and developers. Where once the business of selling mobile applications, games or widgets was an uncertain one for the latter party – do you go direct to consumer or hope for the best on an operator portal? – the App Store has brought new clarity. And with it, consumers!
Since launch, 60m applications are said to have been downloaded, garnering around $30m in revenue, approximately 70% of which goes to developers themselves. In fact, the small games shop, Pangea Software, is estimated to have taken $1.2m for its puzzle download Enigmo in one weekend alone.
If imitation really is the sincerest form of flattery, then it's no surprise that the wireless industry's biggest guns are lining up their App Store rivals. Nokia, of course, launched Ovi – its music and gaming portal – months ago. T-Mobile USA was the first carrier to announce that it would open up its deck in App Store fashion. And now Apple's largest rivals, Google and Microsoft, look set to roll out similar offerings for their mobile operating systems, known as Android Market and Skymarket respectively.
Even so, the App Store hasn't all been a bed of roses, with controversy over the I Am Rich application – a $999.99 download that places a glowing red gem on the iPhone's interface, which proclaims "I Am Rich"!
And recently, discussions amongst the MoMoLondon networking group have centred on a clause in the Apple Developer Agreement that bars Voice over Internet Protocol (VoIP) functionality from applications, so – if the leak is true – the company can include Skype-like functionality in an update of its Wi-Fi enabled iPod Touch and take it to new carriers, avoiding conflict with its existing exclusivity deals.
What lies ahead for the App Store and its competitive clones is an intriguing topic – and, no doubt, one that will be high on the agenda at Mobile World Congress 2009.
The success of iTunes, which dominates the digital music market with a 70% share, is due to the fact that the iPod quickly became the defacto device in an emerging market. Conversely, the iPhone is a new entrant in an established market and will remain a niche device for some time yet, leaving the playing field for mobile apps wide open.
But what is clear is that as rivals adopt the App Store paradigm and "iPhone killer" devices become cooler, the way we use mobile handsets will fundamentally change. Much like Nintendo's DS and Wii have created hoards of "casual gamers", ease of use and the new-found ability to discover compelling content, will make mobile applications the preserve of the everyday consumer, not just that of the archetypal mobile geek.
Posted by Luke Nava on September 2, 2008 at 5:24 PM
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