July App(lication) Store Report: Same As It Ever Was?

The July edition of the WIP App(lication) Store Report is out, and this month, we take a look at what’s changed — and what hasn’t — from the days when operator content decks dominated mobile content distribution. Download the full PDF for a printable version of our App(lication) Store Catalog, including the analysis below.

Editor’s Note: Just after last month’s 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 title 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, while we’re taking legal advice. Thanks for reading, and on with this month’s report.

A continual comment that’s made about app(lication) stores is that they offer a much improved discovery experience for users when compared to earlier WAP content decks, and this, in turn, leads to better sales opportunities for developers. More sales means everybody’s happy and everything’s working. Right?

Looking through many of the major app(lication) stores reveals a few things that haven’t changed all that much since the days when carrier WAP portals dominated the mobile content business. In particular, the dominance of larger app makers in the top-download charts and in the “featured app” slots harkens back to the days when the biggest winners in the mobile content space were the companies with the best biz dev teams, not the best apps and content.

Some app(lication) stores, such as the iTunes App Store, do a decent job of highlighting content from lesser-known developers alongside the big names, but the reality in most stores is that it’s truly a long tail game. Like in so many things, the 80/20 rule provides a good rough estimate: in this case, 80 percent of the apps are sold by 20 percent of the providers — leaving the other 80 percent of developers fighting over the rest of the market.

The attention around this is intensifying as a larger number of app(lication) stores, such as many operator stores and the Amazon Appstore for Android, try to differentiate with developers by emphasizing their strength in merchandising, recommendations, or other buzzwords around consumer app discovery. But seeing the most prominent promotional slots filled by the same class of big players as before could cause many smaller developers to doubt these claims.

It’s logical that store providers fall back on big names and established brands. They want to drive as many downloads as possible, and in a time- and resource-constrained environment, choosing to highlight well-known brands based on their ability to deliver results are a much easier path to take than sifting through thousands of apps to find a better casual game from a small developer. Should a hit emerge from the long tail, they can rely on sales trend data to catch it later.

This may be a frustrating reality for many small and independent developers, but it emphasizes the area where things really have changed since the days of content decks: these stores have truly enabled the long tail of app discovery and distribution.

  • The benefits of this long tail take on several forms:
  • the ability for users to search app(lication) stores from their PC, rather than just from their mobile device
  • the ability for web content to link to apps inside of stores
  • app(lication) stores that aren’t limited to a specific operator’s users make advertising a more viable proposition
  • multiple distribution channels exist, with many of them very easy to utilize, compared to relatively closed operator decks
  • diversity of business models beyond sale or subscription
  • utility of social media to drive personal recommendations, particularly across operators and platforms

Note that while these benefits all have to do with discovery and merchandising in a broad sense, none of them rely on the discovery and merchandising mechanisms of the app(lication) stores themselves. Here, the song remains the same for small and independent developers: app(lication) stores are distribution channels, not marketing machines.

For all but a small group of app makers, the stores can’t, and shouldn’t, be counted on to market their work. The stores enable discovery from outside means, then support distribution in a (relatively) easy way, and developers must take advantage of these capabilities to drive downloads of their apps.

The difference from the days of WAP decks is that the system is much more wide open, and that developers have the ability to effectively market their apps. The system isn’t closed to small developers, but it’s not going to market their apps for them.