Mobile App Stores A New Form Of Fragmentation

After singlehandedly popularizing mobile applications, Apple's App Store set other handset makers racing to open their own versions of the iPhone-geared outlet.

But not everyone thinks the mobile app craze is a boon for the industry--a promising trend in difficult economic times. Telecom consultancy The Shosteck Group sees the rise of competing mobile app stores as an unwelcome extension of the closed wireless carrier portals restricting consumer choice.

"Apple introduced its App Store and now we have Microsoft, Google, Samsung, Nokia (Ovi), SonyEricsson and a host of others announcing theirs. Please explain how these Apps stores are different than operator portals and walled gardens of a few years ago," according to the latest edition of the Columbia, Md.-based firm's Insights newsletter.

It continued: "And how much more fragmentation will these Apps stores cause in the industry. What happened to common platforms? Ironically, these Apps stores will put mobile operators into the role of a transport pipe even more than they are already."

Even the long-term viability of iPhone apps has come into question. Data released last month by Pinch Media, which helps developers monetize their iPhone apps, found that typically only 1% of those who downloaded an app became regular users of it. Whether an app was free or paid didn't make much difference. The store currently offers more than 15,000 applications, and users have downloaded apps more than 500 million times so far.

Shosteck argues that the industry should be doing more to innovate than coming up with their own "Appleization" to gain brand loyalty. Instead, wireless companies should consider developing new mobile services targeting individual sectors such as health care, agriculture and education that have yet to fully embrace the medium.

"The Shosteck Group finds it fascinating that very few are paying attention to these lucrative segments that need to better understand how mobile can play into their future," according to the company's newsletter.

3 comments about "Mobile App Stores A New Form Of Fragmentation".
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  1. Brian Suthoff from Localytics, March 2, 2009 at 8:54 a.m.

    Apple is a great brand and set a daunting example, but I completely agree that more device-specific app stores will further fragment the market -- at least until most of them fail, just as the operator portals have. A few companies are addressing these problems by building cross-carrier and cross-device (including non-smartphones) mobile app development and distribution platforms. For one, check out Everypoint at www.everypoint.com.

  2. Mark Sigal from The Middleband Group, March 2, 2009 at 1:53 p.m.

    All fine and good but fragmentation relative to what? My point is that the space is incredibly fragmented to begin with. What Apple has done provides one model for unification but of course there will be 2-3 others.

    So as opposed to no bridges, there will be 2-3 others. That sounds like improvement to me, unless goal is to have an LCD experience that takes advantage of none of the uniqueness of any of the device platforms, something that already sort of exists.

    I blogged on this topic in general in a Guest Post for GigaOM called:

    Android vs. iPhone: Why Openness May Not Be Best
    http://bit.ly/y6pb6

    Check it out if interested.

    Mark

  3. Faisal Laljee, March 3, 2009 at 12:20 a.m.

    Nokia, Samsung and others may want and try to have their own App Stores. However, the two that will emerge from this will be Apple and Android. I am not saying that Nokia and others will not sell smart phones, but simply that sooner or later, they will adopt the Android OS or develop app stores that integrate with Google's. So they can waste time and money on developing their own App Stores or be smart about it and embrace Android as their default OS.

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