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Report: iPhone "miles ahead" of competing app stores

post #1 of 28
Thread Starter 
A report on mobile applications sales ranked Apple's iPhone App Store "miles ahead of the competition" as the leading software marketplace, based on timeliness to market, the ability to attract developers, and the "number, variety and appeal of applications available."

Store wars

Global Intelligence Alliance Group (GIA) ranked Apple's software sales through iTunes in comparison with Google's existing Android Marketplace, as well as several other competing stores for other platforms now being set up for deployment later this year, including Nokia's Ovi Apps Store for Symbian, RIM's BlackBerry Apps Storefront, Microsoft SkyMarket for Windows Mobile, and Palm's webOS Software Store for its upcoming Pre smartphone.

A variety of software stores operated by third parties were not included in the rankings. Microsoft formerly recommended Handango to its Windows Mobile developers; that site also offers mobile software for PalmOS, Symbian, and BlackBerry devices and announced plans last fall to sell software for Android. Another example is PocketGear. As platform vendors seek to implement their own stores, they will also compete with their former partners, much like Microsoft's Zune ate up the business of the company's PlaysForSure MP3 player and music store partners.

The study also excluded mobile providers that also operate their own software stores, including Verizon Wireless' Media Center (formerly called "Get It Now"), which sells and rents BREW applets for many phones the company sells. Verizon limits many of its phones from being able to load apps apart from those sold by the company itself, another potential conflict for platform vendors hoping to duplicate Apple's App Store success. Apple negotiated with AT&T to run its own software store itself, exclusively. Few other platform vendors have similar clout to demand the same thing.

Rankings by time to market

GIA's report ranked Apple and Google as both "strong" in terms of time to market, as both companies are already operating their software stores. Apple has been selling software since July 2008, and now has a catalog of over 15,000 new apps and user downloads that have surpassed a half billion. Apple has sold 17 million iPhones through the end of last year; most iPhone apps also run on the company's iPod touch.

Google began selling Android software in the middle of last month, after several months of free software distribution. There are currently nine paid apps and 132 free apps listed in Android Market. There is also currently only one Android phone model, the T-Mobile G1, which Morgan Stanley estimated to have sold 300,000 units through the end of last year. Additional phones are due for release from a variety of vendors this year, and Google also hopes to introduce other devices based on the Android platform.

RIM and Nokia's software store efforts were rated as "medium" in time to market, with RIM planning to open its BlackBerry software store later this month and Nokia aiming at a launch date of in May. Microsoft and Palm's efforts were rated "weak." Their stores are expected to open towards the end of the year.

Ability to attract development

Apple, Android, RIM, and Nokia were all rated by GIA as "strong" in their ability to attract developers to their platform, while Microsoft and Palm's webOS plans were ranked as "medium." The report cited "clarity and transparency of software developer kits, approval processes, ease of programming language, reimbursement share and overall control/censorship" as factors that would influence what platforms developers decide to support.

Another factor influencing developer interest is device platform adoption, which GIA ranked independently. In that category, Nokia and Microsoft were ranked as "strong," Apple and RIM as "medium," and Android and Palm's webOS were ranked as "weak." The report noted "The more devices (brands/models) that are available, the larger the addressable market for applications becomes, assuming no individual carrier, brand or model specific adaptations need to be done."

Nokia sells the most phones by far, but its sales are fragmented. Its simpler S40 phones run Java applets or Flash Lite content on the company's embedded Nokia OS, while its higher end smartphones run S60, a platform built on the Symbian OS. Additionally, the different versions of Nokia's S60 phones each have different screen resolutions and other differences that further limit which phones can run specific applications. Nokia will also carry forward its N-Gage gaming platform, which specifically targets a small subset of a dozen (mostly N-series) S60 smartphone models using a unique, closed development SDK.

Nokia sold between 11.6 and 18.8 million smartphones worldwide per quarter over the last two years, giving it a market roughly 7 times larger than the iPhone (about 120 million Nokia smartphones vs 17 million iPhones) in the active installed base of smartphones that are two years old. That doesn't include iPhone touch sales, and doesn't account for Nokia's platform fragmentation among different models.

Microsoft reported shipping 29 million Windows Mobile licenses over its last two fiscal years (ending mid year), and 20 million sales in calendar 2008. That works out to about 35 million Windows Mobile smartphones sold over the past two calendar years, about twice the iPhone's current market as of the end of 2008 (again, excluding sales of the iPod touch).

At the end of 2008, RIM reported a total subscriber base of 21 million BlackBerry users, about 20% larger than the iPhone user base, although RIM's devices are splintering into different, incompatible sub-platforms, including the new touchscreen Storm. Both Android and the webOS will have a negligible installed base through most of this year, during which everyone's share of the smartphone pie will be up for grabs.

User appeal and application availability

In terms of interface and user experience of each platform's software stores, GIA ranked the iPhone, Android, Nokia, and the planned webOS as "strong," while giving Windows Mobile and the BlackBerry a "medium" rank. That metric relates to "making the downloading and installation process fast, efficient and intuitive."

The report noted that "Apple emerges strong here, while also dominant in integrating user popularity ratings and top downloads lists. Nokias smart approach of tailoring the offering/suggesting applications based on user history, preferences, peers and location will put Ovi in a strong starting position. Palm has received good reviews on its new webOS interface and now needs to show actual proof once device shipments start."

In number, variety, and appeal of apps, the iPhone was ranked "strong" along with Windows Mobile, while Android was ranked "medium" and Nokia, BlackBerry, and the Palm webOS were ranked as "weak." The report stated "Size-wise, Windows Mobile will have the lead here, although growth is currently strongest for Apple titles, which are also said to include many applications very well liked by its users. RIM and Palm need to get going fast once their storefronts are up and running."

Regarding Windows Mobile, the report stated "It is estimated that there are currently more than 20,000 different types of software that can be downloaded from a large number of 3rd party application stores." That contrasts with the 15,000 apps that have appeared for the iPhone in the last six months.

Those numbers don't capture the fact that Apple's iPhone has developed a large following of consumer-oriented apps; Windows Mobile has very few serious gaming titles, for example. Gaming is a market promoted by Apple on the iPhone, in conjunction with iPod touch sales, both to take full advantage of the iPhone's hardware and to show off the power of its Cocoa Touch development tools.

Apple's iPhone software library is also primarily priced below $10; the top ten paid titles in iTunes ranged from $1 to $5, and on average cost $1.60. The top selling Windows Mobile titles listed by PocketGear range from $13 to $30, with the average price slightly above $20. PocketGear also listed an average cost of $18 for BlackBerry among top titles, ranging from $7 to $50. PocketGear doesn't sell software for Nokia phones, but Handango listed an average price of $24.50 for its best selling Symbian S60 titles, ranging from $10 to $40.



Barriers to other mobile software stores

Apple's high volume, low cost mobile software sales employ iTunes' FairPlay DRM to promote frequent and regular sales from users and spurring regular new apps from developers. Apple executives have noted that the company runs its iPhone App Store to promote software availability to lubricate the company's hardware sales. That's why the company charges third parties a relatively small 30% cut of the software revenues it collects to handle billing transactions, software distribution, and merchandizing.

Nokia, Palm, and RIM all share similar motivations to promote the availability of software for their platforms in order to sell hardware. However, those companies also lack a high volume, micropayment marketplace like Apple's iTunes. Handango charges developers 40% to 70% of their revenues to list mobile software. Palm is planning to partner with PayPal to handle transactions, incurring transaction fees on developers separate from the 20% listing cut Palm intends to charge them. Nokia and RIM similarly lack any expertise in micropayment software sales, and Nokia's high profile failure of its initial N-Gage gaming efforts indicates that promoting a mobile software platform is not easy.

Microsoft promoted its SkyMarket as a strategy to "monetize" Windows Mobile software distribution. That will likely result in Windows Mobile titles continuing to retain a significant price premium. Sales of Windows Mobile software will not benefit Microsoft to the same degree as iTunes App Store sales benefit Apple, as Microsoft only earns minimal revenues of $8 to $15 on each hardware phone sale via Windows Mobile licensing. Apple earns hundreds of dollars per iPhone sold, which is why Apple recorded $4.6 billion in iPhone 3G revenues in its launch quarter, more money than Microsoft has made in years of its Windows Mobile business. Microsoft desperately needs to earn revenue from app sales to pay for the development of Windows Mobile, and so will likely pursue an arrangement with developers that works like the Xbox, where the company takes a much larger share of developer's revenues.

Similar to Microsoft's Windows Mobile, Android software sales won't make Google any significant money directly or indirectly through increased hardware sales. However, Google is advancing Android primarily to support its mobile advertising business as a free alternative to Windows Mobile. That will enable Android to shrug off a profit motive in its software store. Google delegates much of Android's custom development work to its hardware partners.

However, Android also lacks a security model that contains software sales to a single source, restricts the distribution of malware, and inhibits widespread piracy as Apple does for iPhone users. Microsoft has similarly not demonstrated any efforts to secure Windows Mobile software distribution as Apple has, and Palm has suggested that it will not secure software distribution on the Pre either. Both Nokia and RIM require certificate signing security for certain apps similar to Apple, but impose fewer security restrictions on how and where users can load mobile software.

Highlighting the importance of mobile software to phone sales, GIA executive Erwin Baumgartner stated, "Applications can make all the difference, and manufacturers like Apple who see the smartphone more as a software platform than as a set of hardware features have the ability to position themselves miles ahead of the competition."
post #2 of 28
I really don't get the figure in the article. Someone care to explain it?
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post #3 of 28
but last week a report basically said that most apps were barely used.. so..what is this then?

being 1st in a race of retards still makes you a retard...
post #4 of 28
Quote:
Originally Posted by Archipellago View Post

but last week a report basically said that most apps were barely used.. so..what is this then?

being 1st in a race of retards still makes you a retard...

Except that last week's report was nonsensical, and didn't take into account a number of factors. It was obvious, but some people just didn't see it.
post #5 of 28
Quote:
Originally Posted by Archipellago View Post

but last week a report basically said that most apps were barely used.. so..what is this then?

being 1st in a race of retards still makes you a retard...

That's not what the report said at all. It suggested that after a month, iPhone users quickly moved on past most of the apps they'd downloaded. That means there is fast and frequent turnover and that the App Store is highly competitive for new content.

And since average titles cost a couple bucks rather than $20-$25, people are quick to download things to try them, only paying attention to the best of what's available.

I think the story was trying to suggest that iPhone apps don't matter, as that would be the most sensationalist way to spin the reality that developers are flocking to the iTunes App Store, literally hundreds of millions of apps are being downloaded, and that third party software has become a primary reason for getting an iPhone.

Were you expecting that every app a user gets will be given equal attention weeks later? Or that users will actively use scores of apps rather than a frequent set of a dozen primary ones?
post #6 of 28
Quote:
Originally Posted by Archipellago View Post

but last week a report basically said that most apps were barely used.. so..what is this then?

being 1st in a race of retards still makes you a retard...

So the very human trait of using something a lot when it's new then using it less as the novelty wears off makes us all 'retards'?

'Retards' in relation to what, as it's a relative term.

Nokia has to compete with a plethora of pirated Symbian software sites, whose existance is brazenly advertised on a number of mobile phone forums.

Microsoft has similar issues, they can't even stop WinMo 6.1 and 6.5 ROMS from being installed on unlicenced devices, maybe they'll bring in WGA for their software market.
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post #7 of 28
Sounds like this report was phoned in by it's author.

NEWS FLASH: App store that had a miles head start on competion is currently miles ahead at this point in the race.
post #8 of 28
You chide Wired yesterday and then you do the same thing today (no where near the same extent mind you). The exact "miles ahead" quote is, "...have the ability to position themselves miles ahead of the competition." Might want to update your title.

Reading the story, on a 10 point scale, Apple got a 9 with two competitors getting 7's. Not really "miles ahead".
post #9 of 28
Has anyone else seen the app-store bug; when you hit updates tab on iPhone the store brings up a list of 'previous' versions of about say 5 apps, attempting to bring some apps that have just updated to 2.0, back to 1.5 for example? It's most annoying.
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post #10 of 28
Shouldn't this be posted under the No Sh*t Sherlock section?
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post #11 of 28
Quote:
Originally Posted by SeaFox View Post

Sounds like this report was phoned in by it's author.

NEWS FLASH: App store that had a miles head start on competion is currently miles ahead at this point in the race.

NEWS FLASH: Apple is the 2nd to last to enter the mobile OS app store race.
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post #12 of 28
Quote:
Originally Posted by hill60 View Post

Nokia has to compete with a plethora of pirated Symbian software sites, whose existance is brazenly advertised on a number of mobile phone forums.

Sadly, Apple are starting to see similar problems. I won't say how but it's possible to install pirated apps on a jailbroken iPhone. There isn't a single platform (smartphone, console, desktop) that doesn't have a problem with piracy.

I'm very interested to see how the app store model evolves. There's a lot of barriers both technical and politic to overcome by all of the players.
post #13 of 28
Quote:
Originally Posted by RichL View Post

Sadly, Apple are starting to see similar problems. I won't say how but it's possible to install pirated apps on a jailbroken iPhone. There isn't a single platform (smartphone, console, desktop) that doesn't have a problem with piracy.

I'm very interested to see how the app store model evolves. There's a lot of barriers both technical and politic to overcome by all of the players.

It appears that the others are adopting Apple's app store system because it's the most convenient. While piracy will exist on all platforms, Apple system currently does seem to lead their being a smaller percentage of piracy than other platforms where the app installs are manual. I won't lie and say that I have never pirated software or jailbroken my iPhone, but I have not installed any illegal iPhon App Store apps that have had the DRM removed. It's just too convenient to buy it from Apple for me to care. I think many are in the same boat, thus it's the model that others will follow.
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post #14 of 28
Quote:
Originally Posted by RichL View Post

Sadly, Apple are starting to see similar problems. I won't say how but it's possible to install pirated apps on a jailbroken iPhone. There isn't a single platform (smartphone, console, desktop) that doesn't have a problem with piracy.

I'm very interested to see how the app store model evolves. There's a lot of barriers both technical and politic to overcome by all of the players.

It'll be interesting to see how the game changes once the first few trojans/viruses hit the jailbroken iPhone market. The act of jailbreaking is inherently bypassing the safeties on the phone and opening it up to these possibilities. While preventing jailbreaking at all is, of course, something that Apple should continue to do for the good of the platform, I think more important is some way to centrally detect the jailbroken status of an iPhone and kick them off a network. Once common public sites start doing this, people will stop jailbreaking anyway.
post #15 of 28
Does this mean that Apple is leading due to the most fart apps and level apps?
post #16 of 28
Quote:
Originally Posted by AppleInsider View Post

However, Android also lacks a security model that contains software sales to a single source, restricts the distribution of malware, and inhibits widespread piracy as Apple does for iPhone users. Microsoft has similarly not demonstrated any efforts to secure Windows Mobile software distribution as Apple has, and Palm has suggested that it will not secure software distribution on the Pre either.

Yeah... Apple should obey the malcontents who want apps to be available from every basement malware developer on the planet.

Oh, has anyone checked out the amazing Palm WebOS dev platform?
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Can anyone say 'Hypercard'.
Apple has to be shaking in its boots at that one.
post #17 of 28
Quote:
Originally Posted by Prince View Post

That's not what the report said at all. It suggested that after a month, iPhone users quickly moved on past most of the apps they'd downloaded. That means there is fast and frequent turnover and that the App Store is highly competitive for new content.

And since average titles cost a couple bucks rather than $20-$25, people are quick to download things to try them, only paying attention to the best of what's available.

I think the story was trying to suggest that iPhone apps don't matter, as that would be the most sensationalist way to spin the reality that developers are flocking to the iTunes App Store, literally hundreds of millions of apps are being downloaded, and that third party software has become a primary reason for getting an iPhone.

Were you expecting that every app a user gets will be given equal attention weeks later? Or that users will actively use scores of apps rather than a frequent set of a dozen primary ones?

On the other hand, I think it's fair to say that the sales data reported indicates rabid yet rather fleeting levels of interest in terms of one particular app or another. This says to me that the market is red hot right now (and fits with the current article to some degree), but that it could collapse as easily as it ballooned in the first place.

The ultimate test of the platform will be *after* this period of establishment. How many truly useful apps will there be and what will be those that are done using this platform that won't be useful or do-able on any other? Those are the real questions and they might require more than just the one device to establish.
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post #18 of 28
Quote:
Originally Posted by Virgil-TB2 View Post

On the other hand, I think it's fair to say that the sales data reported indicates rabid yet rather fleeting levels of interest in terms of one particular app or another. This says to me that the market is red hot right now (and fits with the current article to some degree), but that it could collapse as easily as it ballooned in the first place.

The ultimate test of the platform will be *after* this period of establishment. How many truly useful apps will there be and what will be those that are done using this platform that won't be useful or do-able on any other? Those are the real questions and they might require more than just the one device to establish.

The relative low cost and convenience seem to point a continuing up tick in popularity, especially as more devices get sold and Apple, presumably, adopts Tegra and Snow Leopard on the devices as more complex apps will be able to run. Especially games.

PS: With WebKit/Safari's new functionality caching and saving websites on your Home Screen will make using the App Store pointless for the most basic apps and allow some apps that Apple would not allow to be present.
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post #19 of 28
Only problem I see with Apples lead is the fact that other platforms won't be limiting what actually reaches the store. More variety and people will be willing to spend their time developing applications KNOWING that their content will make it to the store. I've had several applications that I have wanted to write but objective C isn't something I use frequently and I don't want to invest time writing something only to have it denied by Apple because of some random reason. Sure Apple store applications will be of a higher quality due to their filtering process but it also hurts them in a way. Unecessary evil?

I think some of the new platform stores will catch up rather quickly and eventually leave apple far behind in the numbers game. Then it will be a matter of who has the 'best' store and not the most numbers we will be worrying about.
post #20 of 28
Quote:
Originally Posted by solipsism View Post

The relative low cost and convenience seem to point a continuing up tick in popularity, especially as more devices get sold and Apple, presumably, adopts Tegra and Snow Leopard on the devices as more complex apps will be able to run. Especially games.

PS: With WebKit/Safari's new functionality caching and saving websites on your Home Screen will make using the App Store pointless for the most basic apps and allow some apps that Apple would not allow to be present.

I agree with you really, I was just pointing out that the field is still open.

*If* another platform comes along, and *if* they do it right, and *if* they do an app store and also do it right, they still have a good chance at unseating Apple. Nothing even remotely like that is on the horizon for sure, I was more just pointing out the possibility. The new platform will be cemented in by it's day to day utility and what people actually use it for that they can't do on another platform.

I agree about the web stuff and the new Safari also, in that an absolutely huge amount of the apps in the app store right now are really just creepy advertisements or portals to functionality that is actually web-based and would be better off envisioned and designed that way. I think Apple was completely right about their original tack towards web-based apps and that this will increase as time goes on as well as be a sort of secret kryptonite that fends off Palm's webOS.

Some would argue that the iPhone platform already has some apps and things that sort of cement it's position as the new platform of choice, but it still seems like early days to me. I tend to think that the introduction of document editing/reading on a slightly larger tablet format is going to be the magic that seals the deal.
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post #21 of 28
All these reports/surveys that ignore the iPod Touch when it's highly relevant are just lazy, I guess? I know data on the Touch is a little more limited, but there ARE ways to estimate, from Web traffic to iPod average selling price to customer and store surveys.

It's a factor that is obviously important to the platform and its apps, and ignoring the Touch (or mentioning it but not tracking it in the actual data) is knowingly producing misleading information. Odd thing to do.
post #22 of 28
What would be nice is if it could be setup that no more than 24hrs after you purchase you could return it for a refund. There aren't any demo apps available so a lot of the time you're at the mercy of the reviews. But still, the reviews won't tell you if the app really does what you want it to, or what you expected it to.

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post #23 of 28
I am actually surprised at the length of this article. My question is, how is any of this considered Earth-shattering, ground-breaking news? "iPhone miles ahead' of competing App stores."

I could have told you that.
post #24 of 28
Quote:
Originally Posted by Ireland View Post

Has anyone else seen the app-store bug; when you hit updates tab on iPhone the store brings up a list of 'previous' versions of about say 5 apps, attempting to bring some apps that have just updated to 2.0, back to 1.5 for example? It's most annoying.

Same issue here. It's quite annoying, I agree.

Anyone else experiencing this?
post #25 of 28
Quote:
Originally Posted by nagromme View Post

All these reports/surveys that ignore the iPod Touch when it's highly relevant are just lazy, I guess? I know data on the Touch is a little more limited, but there ARE ways to estimate, from Web traffic to iPod average selling price to customer and store surveys.

It's a factor that is obviously important to the platform and its apps, and ignoring the Touch (or mentioning it but not tracking it in the actual data) is knowingly producing misleading information. Odd thing to do.

Yes, the touch hardly ever gets more than a mention, despite the fact that the touch is probably now outselling the iPhone by a large margin!
Several observers estimated that almost half the iPods sold in the December quater were touches.

That means about 11 million were sold in that quarter!

Compare that to the iPhone sales over the same period.
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post #26 of 28
Quote:
Originally Posted by Ireland View Post

Has anyone else seen the app-store bug; when you hit updates tab on iPhone the store brings up a list of 'previous' versions of about say 5 apps, attempting to bring some apps that have just updated to 2.0, back to 1.5 for example? It's most annoying.

I just called Apple tech support about this.

The only option at this point is to restore your iPhone. This seems to be a very rare problem, but as luck would have it you and I got it. They're calling it a "software glitch." There is currently no fix for this, no update, and no patch. Restoring your iPhone, I'm told, is the only option.

Make sure all your info on the iPhone (apps, contacts, music, photos, everything) is synced up with MobileMe/iTunes or otherwise backed up.

Go into your iPhone summary page in iTunes, and click on "Restore."

Unless someone has a better idea, this is what Apple tech support just advised me to do.

Not to worry, though, restore is automatic, at least from iTunes. Backup is usually automatic as well, each time you connect your iPhone. There shouldn't be any problems.

UPDATE:

Restore was successful. Couldn't be easier.
post #27 of 28
Apple should not allow third party native applications on the iPhone. Nobody needs third party iPhone applications. Web apps are really, really SWEET.
post #28 of 28
The article kept saying there were 15,000 apps for the iPhone. A few weeks ago (one report was dated February 11) the 20,000 apps mark was passed. Clearly developers like the iPhone/iPod Touch platform. I sure do.
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