App stores operate in a tough competitive environment. The industry already has a number of dominant players, including Apple’s App Store, Google’s Android Market, RIM’s BlackBerry App World and Nokia’s Ovi Store. And the list of challengers is no less daunting: Amazon recently launched into the market with its Appstore for Android, and there are numerous operator and vendor stores in the mix.
When it comes to the latter categories, one company is positioning itself as the partner of choice, providing a white-label platform for third-parties looking to offer app stores. Appia powers portals for three of the top-10 global operators and four of the top-five worldwide handset manufacturers/OEMs, and claims to have a catalogue of more than 140,000 free and paid-for apps, supporting more than 2,000 different mobile phone models.
In recent weeks, the company has announced a couple of high profile deals. It is powering the mobile app store for browser company Opera Software, which is being promoted by a “speed dial” shortcut on the home screen of the browser – making it “immediately accessible by more than 100 million people who use an Opera browser on their mobile phones.” It also inked a deal with Telcel, the largest operator in Mexico, to power its Ideas APPSTORE, with Appia integrating with Telcel’s billing and customer care systems.
The company has some significant history. Before adopting the Appia name earlier this year, it was known as PocketGear, having been spun-out of value-added services enabler Motricity in June 2008. Early last year, it acquired rival Handango to create “the world’s largest cross platform, open app store and content marketplace.”
While Appia still maintains its own direct-to-consumer activities, Dov Cohn (pictured), VP of Products and Marketing for the company, told Mobile Apps Briefing: “the strategy and the market dynamics decided that we were not going to become a consumer marketing company. It’s just simply too expensive to try to aggregate consumers ourselves, to do all of the marketing required to generate awareness and drive consumers to the sites we run. We focus now on helping those brands that have great customer bases already – handset manufacturers, operators, mobile portals – extend their portfolio through an apps store that we power.”
The role of the operator
Cohn has some clear ideas as to how operators can best use their attributes to benefit from growth in the mobile apps industry. “I think they should focus on their brand, and their reach, and creating a store experience that meets the specific demographics and consumer needs of their customer base. The things that the operators are always good at are brand, and establishing a product suited to the market they are targeting. What they are not historically good at is partner management, establishing and maintaining developer relationships at scale to provide the breadth and depth of catalogue that is necessary.”
“A big part of what we bring to an operator is an application catalogue that is large and can be tailored to their segmentation strategy, but that does not require them to go off and structure and establish all of the relationships necessary to build that catalogue. And we put it together in one storefront across every major mobile operating platform, so rather than having to do a deal with five or six different platform companies, we can give them a unified storefront across all of those,” he said.
Continuing opportunity in the mass market
While much of the industry focus is on apps for the smartphone, Cohn is one of the band who highlights the continued potential for Java apps targeting the mass market. This is especially true of emerging markets such as China, India, Indonesia and Latin America, which offer a large customer base, but where smartphone penetration is still low. However, Cohn also notes that in future, web-based applications may prove to be a better tool to address this customer base.
“Java has been a problematic platform for developers historically, because of device fragmentation and the need to create dozens or even hundreds of builds, for all the different mobile platforms. I think the opportunity for developers to reach the 65 percent of the mobile market that is looking for applications on a Java handset is in browser-based applications, especially as these feature phones are able to use rich media and rich applications through a browser, and can deliver a fully interactive and dynamic experience that is comparable to a native application,” he notes.
The evolving market for app stores
Cohn also sees a continued opportunity for app stores as HTML5 becomes more widely deployed. While some observers have noted the potential for web apps to break with traditional distribution channels (particularly in the iOS ecosystem, as a way of reducing Apple’s control over app delivery), app stores can evolve to maintain their position in the channel. Web apps can be packed in such a way as to appear the same to consumers as native software, benefitting from the significant momentum seen in the mobile app ecosystem.
“App stores serve a couple of primary roles. First is distribution by the app developer and discovery by consumers, and that same need will continue to exist for browser-based applications. Second is to provide a quality function, in that there is an element of quality assurance and control that an app store provides to a consumer, and that provides a benefit not only for the consumer but for the application developer. Third, there is a commerce element, where the app store enables commerce so that developers can sell more, charge and make money. All these elements are still going to be necessary or desired by mobile developers in a web application,” he said.
The potential for WAC was also noted, with Cohn stating that: “we expect that this year we will be a partner in that ecosystem, helping them with the distribution of widgets. To us widgets are another content type, and the operators want the value we provide as a one-stop-shop. The operators are asking us to help them integrate widgets into their storefronts, and we are working on that right now.”