August App(lication) Store Report Now Out

This monthly report is provided courtesy of WIP, and is based on the entries from the WIP App(lication) Store Catalog, the leading resource listing app(lication) stores for mobile developers.

Editor’s Note: Just after the June Report was published, we here at WIP received a letter from Apple’s lawyers. Apple has trademarked, or has filed for trademarks for, the term “app store” in the US, Canada and several other countries. Based on its US trademark — which is being challenged by Amazon, Microsoft and several other companies — Apple has demanded that we cease and desist calling this report the “App Store Report” because it “improperly suggests to U.S. consumers that numerous companies offer an APP STORE mobile download service”, not just Apple.

This is why you’ll notice this edition of the report is titled the “App(lication) Store Report”, and any other references to “app stores” have been changed to read “app(lication) stores” — just to be sure we aren’t confusing US consumers who might be reading this.

When examining the sales charts from many app(lication) stores, there’s often a difference in the apps that appear on the “top-selling” list and the “top-grossing” list. The former tends to be dominated by games and the latest must-have consumer apps, while the latter often includes business apps which sell for much higher (10-20x) prices. Purchases of these apps tend to get lumped into the “prosumer” category, which essentially means they’re business users making individual purchases outside of their company or organization. The higher app prices are supported by many users’ ability to expense such purchases, a scenario in which price becomes somewhat irrelevant, up to a certain point.

Without question, some developers are seeing a great deal of success in selling to the enterprise market via app(lication) stores. For individual sales, friction on these transactions has been reduced in the same way as on individual consumer sales. But the bigger prize on offer is large-scale, volume sales to enterprises. How are app(lication) stores helping to facilitate this?

Apple was in the news recently when it announced its Volume Purchase Program (VPP) for the iTunes App(lication) store. The VPP allows a company to buy apps from the iTunes App(lication) store in bulk quantities: a person within an organization enrolls in the program, goes to a special VPP version of the store, selects the apps they want and the quantity they’d like to purchase, pays via credit card or PayPal, then receives a spreadsheet of redemption codes they can distribute to employees in a number of different ways. Essentially, if a company finds a third-party app in the store they want to roll out across their iOS-carrying workforce, it’s easy for them to do so (Apple also offers a similar program for educational organizations). VPP also supports custom B2B apps, though these must carry a minimum price of $9.99.

This differs from the traditional enterprise mobile software sales model by cutting out the need for the enterprise to have a direct relationship with the developer (or for the developer to build a direct relationship with the enterprise). This is not ideal for every situation, or indeed where a company wishes to try and secure volume discounts or other benefits from a seller. But for commodity applications that require no customization (and perhaps where the price is already low enough), it’s a model that combines the ability to make mass sales for the developer with ease of use for the business.

The other major smartphone platforms all support the distribution of apps to enterprise users in other ways:

  • Android: .APK files can be sent directly to users via email or through mobile device management systems
  • BlackBerry: the BlackBerry Enterprise Server allows admins to push apps to users’ devices
  • Symbian: .SIS files can be sent directly to users; third-party MDM systems support distributing apps; Nokia Beta Labs is testing an application that allows photos and other content, ostensibly apps, to be pushed to devices
  • Windows Phone 7: the WP Marketplace supports “private” apps; third-party MDM support

It should be noted that the above discussion focuses on the platforms, and not the platform app(lication) stores. The platforms themselves support the distribution of apps to employees in a number of different ways, generally through support for MDM platforms and services. But Apple’s VPP appears to stand alone in enabling bulk purchases from an app(lication) store, without requiring a direct relationship between the organization and the developer.

Obviously this model is not suitable for every situation or type of application, particularly any in which customized apps are needed. But, again, for commodity apps, it is easy to see this model emulating the way many companies approach PC software for employees: creating a standard set of available applications which employees can request or choose to install. For developers creating applications for business users (as opposed to customized enterprise apps), it’s a real boon, and creates a significant new opportunity for revenue growth.

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