Startup Trends: App Stores
One of the most remarkable things about proprietary products (such as the iPhone, Android, Twitter, and Facebook) are their ability to almost instantaneously spawn off new miniature economies around themselves.
Before the iPhone existed RIM’s Blackberry and the Palm series of PDA’s and pre-smartphones dominated the slice of the market that would eventually be ceded to the full on smartphone explosion. Before smartphones went mainstream, Blackberry and Palm both had what could be considered “apps”, yet all were, for the most part, included in the core software of the phone and thus consumers were more or less relegated to only downloading new games or ringtones when they felt the need. Fast forward just a few years and the landscape is completely different. According to recent reports spending on mobile apps in 2009 topped $4.2 billion, and is projected to reach up to around $7 billion in 2010 (both figures take into account paid downloads as well as free downloads supported by “in app” advertising). This is thanks in part to the ever-growing international adoption and popularity of Apple’s iPhone, whose app store recently announced that it had reached the 3 billion download mark and currently have over 100,000 apps up for download in the iPhone App Store. Google is also hot on the scene with their Andriod software and recently topped the 20,000 app mark in their App Marketplace.
At the risk of stating the deadly obvious, mobile applications are HOTT! However, with 100,000 apps in the iPhone App Store and 20,000 in the Android App Marketplace it is incredibly simple to get lost, or download one app only to find out later on that a another, even better and more effective, one was available all along. So, the smartphone economy (including software platforms), which spawned the app economy, has now spawned another wave of startup businesses seeking to aggregate and display these apps in a way which most benefits the smartphone users as well as the app developers – see the new AppStoreHQ. (Thankfully, this is about the end of the cycle – unless someone is crazy enough to start an aggregator of aggregators).
The app store trend doesn’t end in the mobile space. Facebook and Twitter both are proprietary core platforms which have managed to develop a vibrant economy of applications around themselves. Facebook’s “app store” contains a bunch of applications and games free for users to utilize, yet the apps support themselves with advertisements and premium features (social game developer Zynga has pocketed millions from their popular Facebook apps). Will premium Facebook apps eventually be introduced? With the development and integration of the Facebook payment platform, I think paid Facebook apps have a definite shot at becoming a reality. At this point, no one has really seemed to develop a platform aggregating, showcasing, ranking, reviewing, and displaying all available Facebook apps (other than Facebook) and websites utilizing Facebook Connect. Doing so would certainly be a chore, but could reap untold benefits as people flock to places which take information and make it digestible and useful.
Many free and paid applications have been developed around popular micro-blogging service Twitter. Twtbase.com was a primary mover in the categorization and aggregation of a database of Twitter applications. OneForty has recently moved into the space and has taken on venture funding to produce the destination where Twitter users can easily find and implement both free and premium Twitter applications. While OneForty has established themselves in the Twitter app niche, there is nothing saying someone else can’t come in and steal a bit of their spotlight. The Twitter app market is certainly one to watch as Twitter continues to evolve and produce “in-house” apps and features.
The four app platforms mentioned are just the beginning of what will turn out to be a rather large market in the future as more proprietary devices and software platforms are constructed. Adobe Air is the perfect example of one which is just beginning to see a wider base of developers making both free and premium desktop apps to run on the framework. The key is to be on the lookout for emerging proprietary devices and platforms for which apps can and will be developed. If you are not skilled enough to create apps, find a way to aggregate, categorize, and display the apps in a way which is useful to both users and developers. The app trend is just a baby, don’t watch it grow up and wonder where your opportunity went!


