Cut out the mobile app middleman, says Frost & Sullivan

Cut out the mobile app middleman, says Frost & Sullivan

According to Frost & Sullivan, mobile app stores eliminate the middleman and the additional costs associated with buying through an intermediary.

"The success of the iPhone Applications Store and the launch of the Android Market for the first Android-based device, G1, gave rise to the phenomenon of applications stores in 2008," says Saverio Romeo, industry analyst at Frost & Sullivan.

"However, the idea of the applications store is not a new one. Qualcomm may have been the first to put the idea of an applications store into action by opening its Binary Runtime Environment for Wireless (BREW) to software developers and allowing users of BREW devices to download applications directly to their phones."

This was not a true "farmers market" in the full sense, since Qualcomm was the intermediary of an exchange between an elite group of users, BREW devices consumers, and software developers who needed to fulfil specific requirements to be part of the BREW catalogue.

Mobile users are becoming increasingly aware of their ability to personalise their mobile experiences, and in the first 100 days of operations, the iPhone App Store logged 200 million downloads.

This success has inspired similar app stores, including the Samsung Mobile Store, Nokia Ovi Store, O2 Litmus and the Blackberry Application Storefront.

Mobile network operators and mobile device manufacturers that have direct relationships with users can offer an easy-to-use way of purchasing a variety of applications. Mobile social networking companies can also play the card of the applications store because they have communities of users.

Opportunities for content providers lie in the development of applications and the ability to sell them on different stores for different platforms and devices. There are also business opportunities for service and technology providers in the areas of billing, distribution and retailing, storefronts, advertising, and marketing; all elements necessary for a successful store.

"The advent of the mobile applications stores has brought a new model of mobile content distribution. There are opportunities for different players of the value chain," adds Saverio Romeo. "The competition between stores will mainly lie on the quality of the catalogue, on the level of interactivity with the users and on affordable pricing models. In the latter issue, the role of advertising can be crucial. The adventure has just started."

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