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Only Apple can get away with App Stores

It's a Flash™ in the Pan

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There are certain words I try and avoid when writing, because they confuse more than they enlighten. Terms such as "Business model", "Sustainability" and "Platform" are not just self-serving jargon - the real meaning is the opposite of what is intended. Well, even before this week, I expected the term "Mobile App Store" to be heading the same way.

News of yet another Mobile App Store - this time from a sprawling alliance of mobile networks and Asian handset manufacturers - has been met a shrug of collective indifference. It's one of those things you just know is going to be a flop, simply from the track record, motivations and offerings of the people involved.

Indeed there's evidence that far from being the next gold rush, App Stores were only going to be a pretty minor part of the landscape, and only for a tiny number of players. It's just that most people in the mobile industry don't want to see it that way - opportunism triumphs over common sense.

Let's be honest, the App Store is a phenomenon unique to the iPhone, and it owes much to the singular appeal of the iPhone, whatever you think of it. It's different enough from its predecessors to create a lot of enthusiasm. It may be true that Apple wrapped up a lot of existing technology in the iPhone (lagging behind the market leaders in specifications), but it's irrelevant. The multitouch user experience is so superior, it actually makes people want to use the web, maps, and, yes the App Store.

But the reason there's a market at all is also down to Apple's decision to ban Flash and Java applications. So those little novelty web pages where you can watch dancing hamsters, play Blackjack or rate Hotties for their Hotness, don't work in Safari, and must become Dancing Hamster, Blackjack or Hotness Ratings apps. Of course now you can take your pick from many useful and high quality apps for the iPhone too. Apple created an artificial scarcity and guided supply and demand through a channel it controls completely. Who guessed there was a billion-dollars-a-year worth of value lurking underneath?

App Store Developers may chafe at the margins and the medieval nature of the approval process, but Apple has put them in touch with real money - they're finally at the races.

The problem facing rivals such as telcos, and manufacturers such as Nokia and the Android OEMs, is that they don't have the control Apple does, and their devices aren't compelling enough. Imagine the reaction if Vodafone, for example, banned Flash tomorrow. Nokia is committed to being "open" and with Maemo and Symbian has been as good as its word. But can you imagine Nokia banning Java, just to drum up a bit of interest in Ovi?

What was announced yesterday should have been drawn up a decade ago - years in which users have had to tolerate dysfunctional offerings such as operator portals, or Nokia Download. But if I was in charge of either, I wouldn't be holding my breath.

Don't get me wrong, I think running some kind of Store will be mandatory, just like running a Customer Service line is mandatory. But when they see how little money they get, it will be done just as grudgingly.

Apple's success in creating a billion dollars seemingly out of nothing just reminds developers how hard it is to make pennies from the Web. But if you've studied the economics of Facebook or Twitter, you know that anyway. ®

Bootnote

Colly Myers wrote a must-read post about App Stores late last year, here. Networks don't really want you to run apps, he reckons.

Build a business case: developing custom apps

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