Apple’s iTunes App Store is celebrating it’s 1 year anniversary this week. Apple says their App Store has racked up 1.5 billion downloads, with more than 65,000 apps and more than 100,000 developers in the iPhone Developer Program. The overwhelming success of downloadable applications has forever changed the expectations of cell phone users and how developers create and market software.
The App Store debuted a year ago with 552 applications aimed at iPhone and iPod touch users. It resulted in over 10 million downloads in its first weekend of operation, with $500m in sales during its first month. By December the AppStore had 10,000 apps with 300 million downloads. Now, on its 1st birthday, the App Store’s collection (148apps), exceeds 56,000 apps and passed the 1 billion download mark in April.
AdMob says Apple has sold a total of 30 million combined iPhones and iPod touches. Their data suggests that about 75 percent of those are sold in the US with two-thirds of the combined iPhones and iPod touches using the mobile Web or applications.
Apple doesn’t break out details about iPhone and App Store profits, so it’s difficult to get a precise figure. But Shaw Wu, an analyst for Kaufman Brothers, said his “guesstimate” for Apple’s quarterly App Store revenue is a few hundred million dollars at best, out of $1.5 billion in overall iPhone-related revenues. App revenue per phone is about $27, says the WSJ, if one divides the number of downloads by the number of devices, and assumes that the average selling price of apps is $1. Apple’s share of that $27 is about $8 (30%).
“The App Store business is a facilitator of hardware sales. Profit is not really the motive,” said Wu.
The App Store has also created a cottage industry of small-time programmers who can get rich overnight with just one hit idea.
The number of smartphone users, currently about 25 million (mostly Apple iPhones), is relatively tiny, but sales in North America grew 69 per cent in 2008, says Gartner, with smartphone sales expected to increase four-fold by 2013, according to In-Stat. In-Stat expects the number of users accessing mobile applications stores with smartphones to reach nearly one-third, or 100 million, of all smartphone users by then. Everybody’s got to go.
Apple’s competitors for download applications now include:
- The Android Marketplace. T-Mobile introduced the world’s first Google Android phone, the G1 in the US on 22 October 2008. The company claims it has sold more than 1 million devices with xx downloads. T-Mobile USA is betting big on its second Android smartphone, the MyTouch 3G (HTC Magic) which will be generally available starting August 5th. Like the iPhone, the MyTouch has a touch screen with a virtual keyboard. Android phones like HTC Hero, the first Android device to support Adobe Flash, are expected to be joined by nearly two dozen Android devices by the end of the year. Android 1.5 enabled functionality such as video recording, stereo Bluetooth and an on-screen keyboard.
- BlackBerry’s App World features some 2,000 applications as of this week while Google’s Android Marketplace now has some 5,000 total apps. The Android Marketplace is also planning for a Direct-to-Bill system for applications which will show purchases on your phone bill.
- The Palm Pre: Sprint has an exclusive on Palm’s smartphone with multi-touch screen and a sliding keyboard. It was launched on June 6, 2009, and is the first to use Palm’s new Linux-based operating system, webOS. WebOS has a built-in application catalog, and APIs for extending JavaScript in order to access hardware features of the device.
- Nokia’s OVI: Ovi, a “personal dashboard“, was announced on August 29th 2007. The OVI store was launched world wide in May 2009. Users can share photos with friends, buy music and access third-party services. The OVI Store supports for more than 75 Nokia devices, with integrated mobile billing through 27 operators globally and is localized in 5 different languages.
- Windows Marketplace for Mobile is Microsoft’s announced application and service by Microsoft for their Windows Mobile platform that allows users to browse and download applications that have been developed by third-parties. The application will be available for use directly on Windows Mobile 6.5 devices, and on personal computers. It was announced at the 2009 Mobile World Congress, and is expected to be released by the end of 2009.
- LG Electronics is launching an online store for mobile phone applications with an initial focus on Asia. LG expects their “LG Application Store” (lgapplication.com)” to offer up to 2,000 applications by the end of year with at least 100 free programs for LG handset users. The LG Mobile Developer Network is designed for third party software developers. LG plans to release 80 mobile phone models around the world this year, of which 12 will be smartphones. LG is the world’s No. 3 handset maker, trailing Nokia and Samsung.
Verizon is planning their own app store that would include popular smart phone makers like Windows Mobile, Android, Blackberry and Palm. Verizon is hosting a Verizon Developer Community Conference on July 28 to encourage developers to design software for the carrier’s phones. Verizon’s applications may be based on a set of standards from the Joint Innovation Lab, says PC World, an alliance between four worldwide carriers including China Mobile, Softbank, Verizon, and Vodafone.
iPhone App Store, Android Market, Blackberry App World, Palm App Catalog and Nokia Ovi Store and Windows Mobile Marketplace provide a platform for marketing, selling and distributing software.
Adobe announced in February that they planned to bring Flash 10 to the Android platform by the end of 2009. Adobe says they have optimized Flash’s performance on the ARM processor and a 2.0 version of the Android OS (aka Donut) is expected around the same time as the launch of Adobe Flash Player 10 mobile. Flash applications don’t need to be submitted to the Apple App Store. In the app store, you download native or native-like apps directly to your iPhone. With Flash, a developer can build an app, put it onto any web server, and launch the app from the web server.
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