• by Mark Walsh  @markfwal, December 30, 2009

Will Apple be the Google of mobile app search? A new report from investment firm Broadpoint AmTech suggests the iPhone-maker has an opportunity to monetize the search process for applications as the number of apps balloons and discovery becomes more difficult.

"We do not think it is inconceivable for Apple to consider entering the "App" search business," states the report by Broadpoint analyst Ben Schachter, which looks more broadly at the impact of apps on mobile search. It maintains that apps pose a potential threat to established search players because they allow users to bypass the traditional search box to go right to the source for information.

So a mobile user might turn to the Amazon app for production information or the Fandango app for movie listings, instead of Google or another search engine. "If users get in the habit of using Apps to access the desired information or service, search engine traffic and query volumes for the established search engines/portals could be negatively affected," according to the report.

Schachter also points out that commercial and product-related searches, which are among the most lucrative queries because they signal purchase intent, are also the most at risk of being lost. That's because more and more apps are geared solely to providing product information or catalog displays, while others employ GPS navigation and barcode readers to help users find the best deals in a local area or enhance in-store shopping.

Apps are also increasingly powering mobile commerce. In the most prominent example, eBay has said it expects to sell $500 million worth of merchandise via its mobile app this year.

Where Google and Yahoo have become a key part of the typical research and shopping process online, the emergence of e-commerce apps in mobile may disrupt that pattern, leading to fewer product queries. The increasing ability of smartphone owners to populate device "decks" with their favorite apps will only hasten the shift away from using the search box as a shopping starting point.

In that sense, Google is laying the seeds of its own destruction by creating an open mobile operating system like Android. At the same time, through Android and the upcoming launch of its own mobile phone, Google is focused on increasing mobile Web use while extending its Internet-based business model. The importance of mobile apps has not been lost on the search giant, either -- its Android Market now boasts some 20,000 titles.

That total is still well shy of the more than 100,000 in the iTunes App Store. But exactly how Apple might build on its big app advantage to enter the search business, the report doesn't spell out. Rather than starting its own app search operation, it suggests the company is more likely to partner with an established search engine in a revenue-sharing deal. Google already powers search on the iPhone browser through an agreement in which Apple is believed to get the majority of ad revenue.

But the more Apple perceives Google to be a direct competitor in smartphones, the less likely it may be to ally with Google on mobile ventures over time.