Mobile App Stores – The next wave – is it ?

Since the last few months I have seen an  increased chatter about how mobile app stores are the next big thing. Last year and before it was the topic of mobile advertising ( claimed a  couple of billion dollar industry globally and with CAGR over 30% ) that had caught the fancy.  With the deep recession since last year ( officially) and ad budgets getting cut across the board and hence the curtail on experimental ad budgets for mobile the sheen has weared out for it and that I think has given place to the app stores as new fancy.

Case in point is that last week I happened to see a report from wirelessexpertise at the momo london list on mobile app stores. Later Anuj of wirelessexpertise reached out to share the same with me for Indian audience and I had to respond with the following as feedback in email  ( I must admit however that he took it very candidly)

First of all the report has very little relevance for Indian market even if it made sense for global context :(. Some thoughts in detail in particular order.

• Marketing, payment and delivery is still bundled in Indian operators and no one knows when 3rd party billing will arrive (couple of years maybe) . I have to admit however few operators are setting infrastructure to be ready.
• The internet/paypal is so small that online players are not able to yet make a case of them running an online only business and they have hence resorted to runing an offline business too. So there is almost 0 case of paypal purchase of mobile apps at all.
• iPhone is irrelevant too for consumption in India ( atleast till now).
  
• Apps are used in 100s but filled in SD cards ( from places like gaffar market), piracy is rampant. For ~50 bucks you get 100 apps & movies, songs to choose from at these local shop
• The revenue numbers are to me completely out of tune, my best estimates put it at not more than 500 million – 1 billion $ so far and not 4 $ billion. ( I would glad to be more educated here and be proven wrong)
  
• Handango is left out which is more relevant than samsung app store.
  
• Getjar is not an appstore, I dont rememeber buying from it and I did not see any setup so far in to enable purchase, it is best for promotion (marketing channel and purchase point).
  
• What would have made a convincing case is to highlight success stories ( even in just apple iphone case) , even then an alert reader would point winner/survivor bias and argue against generalizing the case.
• This is verizon’s 3rd attempt , if I am not wrong  once before iPhone and two time after iphone to get an app store strategy working and it has not worked so far.

Moving away from the report, if we were to look at the overall picture, except Apple I am yet to impressed by others.

Nokia has been in this for way long, their latest attempt is OVI and I must say I am not impressed, extremely few sucess stories emerged so far. Infact Medianama has called it a mess and I tend to agree.  I can also say this from a developer point of view too.  We have wwigo in OVI and for very little (or I would even claim none) fault of ours we have been butchered by OVI users. Simple things here are the most dificult.  The changes we ask ( even a small text change) gets implemented after a month and have no support/means available to reach the end users to help address the feedback that user gives us.  I could just write 5 blog posts expressing my anguish about my entire experience 🙂

Samsung has just not got the right DNA for building platforms. Some of the recent activities that Samsung did completely foxed me, they killed the 3rd party enabled/provided store after initial trials which successfully signed up many developers, created a totally different store of their own, changed all contracts overnight and left many developers high and dry.

Microsoft has just started I am more hopeful because they grok on how to build developer communities.

Have to give it to iPhone ( for a differnt way/reason) , they have made  a lot of money for themeselves and also have created a few successful developers.  I know of even Indian companies have been tremendously benefitted( with apps for a global audience however)

Summary here is that lets tone our volumes a little bit about making large claims about the next big thing and not jump from one item of fancy to another. It is critical we do that for the entire industry to grow in the right way.  Personally I think It is always better to make smaller claims and overdeliver than to make large claims and then underdeliver.

The above however may not work for research reports ( not just this one but any research report for that matter – nobody reads a report that says that there is no certain new market but reads to know that there is some  huge market) but it is important for startups,entreprenuers, small companies to keep in mind especially because we tend to believe in everthing that we read and can’t help it.  They have very scarce resources and cannot afford to make too many mistakes in decision making and hence need to be well – informed.