The significance of App stores in the effort to de-throne the iPhone

Tue, Oct 21, 2008

Analysis, Featured, News

As BlackBerry prepares to release the much talked about touchscreen BlackBerry Storm, it’s also preparing to launch its own app store that it hopes will rival the offerings of the iPhone.  As smartphones become  more and more popular, companies are scrambling to bring their own versions of touchscreen phones to the market. Inevitably, smarthphones will become increasingly harder to distinguish from one another, and what will really make them standout will be the applications they can run.  It’s not a stretch to say that the smartphone with the best app store, the one that developers want to develop for, will be the leading smartphone for years to come.

The Developers Point of View

Apple gives developers 70% of every sale, but every app must be pre-approved by Apple.  Google’s Android Marketplace, on the other hand, requires no prior approval and BlackBerry’s upcoming Application center will give developers 80% of every sale.  Will this be enough to sway developers?  Keep in mind that the iPhone already has a strong implanted user base whereas the BlackBerry Storm has yet to be released.  Developers want to make money, and with millions of users already using and downloading apps to their iPhones, the BlackBerry Storm has a lot of catching up to do. It doesn’t help that the BlackBerry App center won’t open until March of 2009. So while an extra percentage of sales is always nice, developers will undoubtedly focus their efforts on the phone with the largest number of consumers who actively download applications.

The Users Point of View

In terms of usability, iPhone users can download apps via iTunes, or via the wireless app store.  BlackBerry Storm users, at least initially, will only be able to browse and download software via the BlackBerry itself.  This could prove to be a nuisance for customers who find it difficult and inconvenient to browse apps on a relatively small phone screen.  In terms of quality of content, the iPhone also has a commanding lead that other handset makers might have trouble emulating.  Because the iPhone app store was first out of the gate, other app stores find themselves in a cyclical predicament.  Developers won’t create programs for a phone with a small user base, and users will be less inclined to buy a phone without a decent number of applications.

The Winners

The winners in all of this are clearly the developers and the end users.  It wasn’t too long ago that developers were only making 30% of every app they sold.  But now, there’s essentially a bidding war between which app store will give developers a bigger percentage of sales.  With more of an incentive to develop, and with new and exciting platforms in the marketplace, developers are creating more and more amazing applications every week.

Again, as smartphones continue to battle each other for market share, it’s clear that the one with the best app store, the one that developers flock to, will be the leading smartphone for years to come.


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