Online app stores to grow ... and grow .. and grow
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Online app stores to grow ... and grow .. and grow

With the launch of the Apple App Store in mid-2008, Apple managed to reinvent the smartphone application market, creating an end-to-end solution (iPhone/iPod touch, iTunes Store and applications) that dramatically improved the customer experience of application discovery, download and usage.

Since 2007, the smartphone application market has grown annually by 140%, reaching a value of US$1.94 billion (2009). However, the market is still in its early stages. The top five application stores represent 96% of the market's downloads, with Apple alone responsible for 77% of total downloads.

Independent applications stores like GetJar, Mobango, Handmark and Handango sold smartphone applications and other mobile content long before the Apple App Store's launch. These stores benefitted from Apple's boost to the market with quickly growing download numbers. In 2009, independent stores held a market share of 25%, but are increasingly threatened by the large number of new application stores being opened by OEM, OS and MNO companies. In 2009 there were 34 major full-catalog application stores in the market, as well as hundreds of niche stores.

With the broadening range of application stores, the development of a multi-platform strategy will become a must for corporate publishers, says the Research and Markets research group. The selection process when assessing application stores' appropriateness for a particular publisher can be effectively guided by a few key criteria: competition level, monetization opportunities, discoverability options and service and submission quality.

A recent Research and Market ( report ranks more than 20 major application stores in detailed assessment according to these categories. This application store ranking highlights the various strengths of the stores and demonstrates that there are indeed other valuable distribution platforms for applications besides the Apple App Store.

On the publisher side, mobile specialists such as small garage developers and gaming companies have been the dominant players in recent years. With few exceptions, more traditional companies started their push into the application market in 2009. As part of this study, a survey of 82 of these first mover companies revealed that virtually all selected the Apple App Store as the publishing platform for their first application. For these applications, companies report using a step-by-step approach with limited development budgets (averaging $35,000 US) and quick time-to-market cycles (54% of participants released their applications in 1-3 months) in order to become familiar with this new customer channel.

Based on the flurry of activity in the smartphone application market recently, best practices for large global companies looking to successfully enter this very competitive landscape have begun to emerge. Corporations are able to leverage the resource advantages they have over independent and garage developers. Besides successfully developing unique applications that effectively make use of smartphone features, these companies manage their existing marketing and service assets better than their competitors, allowing them to directly compete with the mass of mobile specialists, says Research and Markets.

In the next four years the market will see dynamic growth, according to the research group. By the end of 2013, the smartphone application market will have grown annually by 68% to a value of $15.6 billion. By that time the number of smartphone application consumers will have reached 970 million worldwide.


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