Mobile apps stores (visit for insights)

IEEE Communications Magazine • November 2012160 0163-6804/12/$25.00 © 2012 IEEE

INTRODUCTION

Smartphones have revolutionized mobile phoneusers’ experience, thanks to several key techno-logical advances. The deployment of third gener-ation (3G) and 4G networks has considerablyimproved the available mobile bandwidth,enabling the provisioning of content and servicespowered by the cloud computing infrastructure.In parallel to that, device hardware specifica-tions have improved to the level of personalcomputers, along with drastic interface improve-ments and usability enhancements.

Additionally, user habits are shifting frommere consumers to a more part ic ipat ivemodel. User-generated content is a realitythat is fostered by the hardware and networkcharacteristics of these devices. Current-gen-eration phones are equipped with the toolsfor generating content (e.g., through installedcameras), as well as the capability to publishit immediately, from anywhere. This has beenfurther promoted by the explosion of social

networks, which are a natural match to thepersonal and mobility characteristics of thesedevices.

These factors have been leveraged by newplayers in the mobile ecosystem, resulting in themobile application store model for content andapplications delivery. This signifies a paradigmshift in the mobile landscape, enjoying tremen-dous success and currently being the model toaim for every remaining player. For the year2012, reports forecast $15 billion revenue frommobile application stores [1].

In this article we present the main character-istics of mobile application stores. We focus ouranalysis on two successful stores with differentapproaches: Apple AppStore for iOS andGoogle Play (formerly known as Android Mar-ket). We first describe the common characteris-tics of these solutions, identifying the keysuccess factors of these platforms and outliningthe fundamental value network of this model.Additionally, we compare side by side their dif-ferences, as they constitute two differentapproaches to the ecosystem as regards controland innovation.

THE MOBILE APPLICATION STOREMobile application stores have revolutionizedthe landscape of mobile applications and ser-vices. However, they are not the first attempt atmobile content provisioning. The most impor-tant precedent is the Japanese semi-walled gar-den I-Mode [2], launched in 1999. This modelachieved significant local success, but could notbe translated to the rest of the world.

This section presents a general overview ofthe mobile application store model. First we pre-sent the technological and social changes overthe latest years that have enabled the success ofthis approach. Once the context has been clearlyexplained, we describe the market through acharacterization of the underlying value network,and finally, we present the key innovations thathave nurtured the ecosystem.

ABSTRACT

The mobile user experience has been signif-icantly altered with the arrival of mobile broad-band widespread deployments, massiveimprovements in available smartphones, and ashift in user habits toward a more participative,communicative role. In this context, mobileapplication stores have revolutionized softwareand content delivery. These stores focus on theapplications, building around them an ecosys-tem of developers and consumers. The storegreatly lessens the barrier between theseagents, providing significant benefits to bothdevelopers and consumers. In this article weanalyze this phenomenon, describing its origi-nating factors and fundamental characteristics.We also perform a more detailed study on thetwo most successful application stores, identify-ing different approaches to implementing themodel.

TOPICS IN CONSUMER COMMUNICATIONSAND NETWORKING

Félix Cuadrado, Queen Mary University of London

Juan C. Dueñas, Universidad Politécnica de Madrid

Mobile Application Stores: Success Factors, Existing Approaches,and Future Developments

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IEEE Communications Magazine • November 2012 161

MOBILE APPLICATION STOREENABLING FACTORS

Over the latest years, technological advances andsocial changes have modified many aspects ofour lives. They have dramatically altered whatwe can do with mobile communications, as wellas what we want to do with them. These factorsare fundamental for understanding the successof the mobile application store model.

From the network side, standardization bod-ies have followed an active roadmap in the defi-nition of mobile communication standards (goingfrom 3G to 4G), which raises the level of mobileconnections to wired network broadband stan-dards. These specifications are being deployedby telecommunications operators, as data traffichas become the only way to maintain or increaserevenue [3]. These important investments ininfrastructure make the mobile Internet a reali-ty, providing an affordable mobile connectioncomparable to home broadband, barring conges-tion limitations.

In parallel to the evolution in wireless com-munications, the capabilities of end-user devicesare improving significantly. Current-generationsmartphones have significantly improved hard-ware specifications (up to four 1.5 GHz process-ing cores, 1 Gbyte of RAM, plus a dedicatedGPU), and are equipped with multiple sensorand actuator interfaces (GPS, camera,accelerometers, capacitive multitouch screens,multiple wireless communication interfaces) [4].Those hardware enhancements are seamlesslyintegrated into mature multitouch user inter-faces, fundamentally altering the user experi-ence.

In addition to these changes, the role of usershas been altered significantly. Traditionally userswere passive consumers of information and con-tent. Nowadays, they play a more active role asprosumers. User-generated content [5] is a reali-ty, thanks to the availability of simple contentcreation and publication platforms. Audiovisualand journalist content is created by users, pro-viding huge value to the available platforms at avery small cost. This change of role has beenpromoted by the arrival of social networks.These communities allow users to communicate,interact, and share through a self-contained plat-form. Their acceptance has been overwhelming,partially cornering the traditional Web vision [6].

THE MOBILE APPLICATION STOREVALUE NETWORK

The initial business model for mobile contentwas based on the semi-walled garden concept,where the operator exercised complete controlof the value chain. This has been significantlyaltered with mobile application stores, whichcreate an open environment. The number ofactors is significantly larger, and the establishedrelationships are more complex. Consequently,traditional value chains are not useful for analyz-ing this model. Instead, we present a value net-work analysis, where we identify the keyfunctions and relationships that provide value tothe ecosystem [7]. Figure 1 shows the main func-tions of the ecosystem. The relationships

between them show value or informationexchange. The three central pieces of the busi-ness model behind mobile applications (provider,store, and consumer) are highlighted in a clearertone.

The value of the store is proportional to thecontained applications. An enormous variety ofassets is offered through this mechanism, rang-ing from native applications, access channels tosubscribed Internet services, and consumablecontent, to device-enhancing software. Currentstores are generalist, offering both professionaland leisure-related content and applications.Applications cover a wide spectrum of interests,including games, social network access, news,weather, productivity, and health.

The left-most function is the supplier to theecosystem, the application provider. This functionis key to the success of this model, as it fills themarket with applications to be acquired. This isfostered by imposing a low entry barrier to devel-opers. Multiple profiles of application providerscoexist, ranging from amateur developers tolarge enterprises. These actors provide applica-tions, which are defined as native, installablepieces of software, developed using the platformapplication programming interfaces (APIs) andguidelines, and provisioned through the market.

The producer role is supported by two addi-tional functions. First, mature creation tools arenecessary, as they enable a productive develop-ment process for applications at the targetedplatform, as well as support channels for address-ing the technical difficulties. Additionally, thealways connected nature of the devices becomesa differential factor for many developed applica-tions, as they can rely on content and serviceshosted at a remote infrastructure (e.g., cloudcomputing). Therefore, many developed applica-tions rely on a remote services provider, which canbe the same actor providing the application or adifferent one in charge of providing support(e.g., online leaderboard services for games).Cloud computing has become a fundamentalfactor in the success of many applications, as itextends the possibilities of these applications,while at the same time reducing computing costsin centralized servers [8].

On the other end of the value network residesthe consumer (the end user). S/he accesses the

Figure 1. The mobile application store value network.

Applicationconsumer

Applicationprovider

Creationtools

Remoteservice

provider

Billing

DevicePlatform

Network

Socialnetwork

Searchrecommendation

marketing

Mobileapplication

store


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IEEE Communications Magazine • November 2012162

store and consumes the developed applications.The consumer becomes the center of the ecosys-tem, interacting with many agents that were pre-viously oblivious.

Mobile applications reach the consumerthrough a technological framework. The impor-tance of these elements has diminished, as thevalue now passes through them. The frameworkis composed by a hardware device, installed withthe software platform (operating system and baseservices) that can execute the applications andaccess the store. Additionally, the device needs amobile or local wireless network connection, pro-vided by the telecommunications operator, inorder to access the store and the services.

The third main function in this ecosystem isthe mobile applications store. This function com-bines the traditional roles of content aggregatorand distributor. The store constitutes a directlink between developers and consumers, signifi-cantly reducing the barriers between them, asboth interact directly with it. From the develop-er’s perspective, the application store providesadded value through an integrated billing func-tion. This factor lowers the entry barrier forsmall developers and contributes to creating arich ecosystem. There is room for differentbilling providers than the one with the store, butthe store always acts as mediator (collaboratingwith the specific agents).

In principle, the application store is an openmarket, where every competitor has equalchances to succeed. However, it must be notedthat active markets are enormously competitive,with tens of thousands of competing applica-tions. These factors greatly increase the impor-tance of the functions related to discovery,marketing, and recommendation of applications(e.g., professional marketing actions, advertisingstrategies, and user opinions), as they play a fun-damental role in application success. It must benoted that the first vehicle for application high-lighting and search is the application store itself,but there is plenty of room for additional actorsproviding more complete functions that are ableto match consumers with desirable pplications.

Finally, although it is difficult to classify as asingle function, the social network is a very rele-vant factor in the ecosystem. The social networkconnects the application consumers, as well asthe developers. Their communication mecha-nisms are fundamental for the marketing andrecommendation functions (e.g. publishing‘achievements’ from a game into the consumersocial network, or having a direct means of con-tact with application developers through theirsocial network accounts), as well as for allowingdevelopers to interact directly with the potentialconsumers.

SUCCESS FACTORS FOR THEMOBILE APPLICATION STORE

A key factor for a successful content provision-ing platform is creating a positive feedback loopbetween content providers and consumers [9].Content determines the value of the platform.As more consumers adopt the platform, the larg-er the potential consumer base becomes for pro-vided content. This in turn increases platform

value, fostering the growth of the consumerbase. The key innovations of the Mobile Appli-cation Store model have been designed to takeadvantage of this loop, attempting to benefitapplication providers and consumers.

Most innovations are targeted at lowering theentry barrier for application producers. Develop-ment tools are affordable and high-quality, andlicensing costs to publish applications to themarket are very reduced. This is complementedwith high-level programming languages anddeveloper-friendly APIs, exposing the capabili-ties of these new devices while providing anabstraction layer over low-level, hardware-relat-ed concerns.

Additionally, the platform provides ready touse services and interfaces for advertising, secu-rity, cloud storage, or push mechanisms. Thepublication process is open to every developerand more streamlined, resulting in much quickertime to market. Moreover, full application lifecycle management is provided by the platform,including automatic update notifications for con-sumers and smooth management interfaces.

Finally, the revenue sharing approach is veryattractive for developers (with their share beinggenerally 70 percent of the benefits, even morein some stores), and is automatically managed bythe store through the billing service (greatlyhelping small developers and handling regionalregulations, such as tax management).

In principle there is no discriminationbetween great companies and independentdevelopers, although in practice larger entitieshave better tools to prosper a competitive mar-ket. Nonetheless, the store is a natural fit for thelong tail business model [10], enabling nichedevelopers to push and succeed in the commer-cialization of innovative, specific products.

Developer diversity has also been motivat-ed by the rise of multiple business models thatcomplement traditional purchases [11]. Freeto download applications generate an eco-nomic profit through a variety of mechanisms,including in-app purchases (also known asmicrotransactions), integration with advertis-ing mobile platforms, and periodic subscrip-tion models for content access. Moreover,applications are increasingly developed forintangible benefits: as a means of advertisingfor a company, as a support element for anassociated premium event (e.g., a music festi-val), or as an access mechanism for a sub-scription service, enhancing its perceivedvalue (e.g., allowing access to a music or videoservice anywhere).

From the consumer perspective, the changespresented in this model improve the user experi-ence for the market browsing and purchasingprocess. The store can be accessed through thesame device that will execute the applications (aswell as from external devices such as comput-ers), providing a simple interface for browsingthe store, searching for specific applications,paying and accessing them instantly. Additional-ly, the positive feedback loop provides an ever-increasing catalog of elements, and enables anaffordable pricing model, as well as alternatemeans to monetize apps (e.g., ad-sponsored, orfreemium).

Content determines

the value of the

platform. As more

consumers adopt the

platform, the larger

the potential

consumer base

becomes for

provided content.

This in turn increases

platform value,

fostering the growth

of the consumer

base.


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COMPARATIVE ANALYSIS OFAPPSTORE AND ANDROID MARKETS

Up to this point we have presented the main ele-ments of the mobile application store model.Apple defined most of these innovations withthe launch of the AppStore in July 2008. Thetranslation of the iTunes music delivery modelto applications and services for iPhone devicessupposed a tremendous success. Less than fouryears later (March 2012), the AppStore hostsmore than 600,000 applications, and total down-loads surpass 25 billion. Although the proposedvalue network displaces telecommunicationsoperators from the central role, they reportincreased profits from these users (60 percenthigher ARPU in the case of AT&T). This isoriginated by the traffic generated by applicationdownloads, as well as the traffic generated byusing the applications for accessing content andcloud services.

Following the success of Apple, each relevantcompany in the mobile ecosystem has attemptedto replicate their model. This way, platformdevelopers, device manufacturers (e.g., SamsungApplication Store for Bada) and telecommunica-tions operators (Vodafone 360 AppStore) havelaunched their own mobile application stores.However, it is still premature to determine whichof them become successful (gathering a criticalmass of developers and consumers). At this timeonly Google Android (and its associated store,Google Play) can be classified as a successfulpositive feedback loop, when comparing rate ofgrowth of applications and rate of selling devices[12]. Android is an open source mobile operat-ing system developed by Google, and supportedby the Open Handset Alliance, an association ofmore than 20 mobile hardware manufacturers.After a slow start, Google Play has gathered450,000 applications since its launch in October2008, as can be seen at Fig. 2.1

For obtaining additional insight on the mobileapplication store phenomenon, we analyze thesetwo initiatives. The AppStore is the main expo-nent of this model, being the original implemen-tation, as well as currently the largest ecosystemin number of applications and economic value.Android has experienced tremendous growthrates over the last three years, becoming current-ly the fastest growing mobile smartphone plat-form, with more than 850,000 devices activateddaily worldwide in February 2012.

While these two platforms follow the samefundamental principles (explained in the previ-ous section), in some aspects they apply oppositeapproaches. The AppStore follows a closedmodel. Apple controls the device specification,platform, and store, and exercises limited controlover the available applications in the market inorder to preserve the end- user experience. Onthe other hand, Android is aligned with the openmobile innovation principles [13]. Platformdevelopment follows an open source, collabora-tive effort, and applications have fewer restric-tions to join the ecosystem. Table 1 provides anoverview of the main differences found betweenthese two initiatives.

These differences clearly reflect the philoso-

phy behind each platform. While being consider-ably more open than the semi-walled garden, theAppStore model controls the central elements ofthe value network (store, device, platform, ini-tially the network). Developers have to followstricter acceptance requirements, also restrictingwhat type of applications can be published. Thisenforces minimum quality levels for the availableapplications, as well a homogeneous end-userexperience.

On the other hand, the Google Play modelfollows a more open approach, with considerablyfewer restrictions and more diversity for everyfunction of the ecosystem. This approachattempts to benefit from the force of the crowdin every aspect: hardware manufacturers supportthe platform with a wide variety of devices, theopen source nature of the project allows itsrapid evolution as bug fixes and improvementsare committed by third parties, and a non-restric-tive publication policy for Google Play fostersthe influx of applications, enriching the ecosys-tem. However, platform diversity can lead to itsfragmentation, increasing developer effort whencompared to a more homogeneous platform.Additionally, there is the risk that alternativeapp stores (e.g., Amazon AppStore and the Kin-dle Fire) can segregate from the Google ecosys-tem.

A significant number of these differences arerelated to the process of publishing applicationsto the market. Unlike previous models, the App-Store is open to any licensed developer, but itimposes restrictions on applications before theycan be published to the market. These require-ments include legal aspects (e.g., copyrightrestrictions), thematic limitations, and platformhomogeneity enforcement, mandating thatapproved applications follow every style guide-line, and do not replace any functionality. Onthe other hand, Google Play restrictions are lim-ited to the legal aspects. These differences causethe time to market for applications submitted toGoogle Play to be almost instantaneous (fromthe moment the developer submits a publishrequest), whereas in comparison the review time

Figure 2. Evolution of Apple AppStore and Google Play available applica-tions.

Dec-08Jun-08

100,000

0

Num

ber

of a

pplic

atio

ns

200,000

300,000

400,000

500,000

600,000

Jul-09 Jan-10 Aug-10 Feb-11 Sep-11 Apr-12

iOS AppStoreGoogle Play

1 AppStore and AndroidMarket apps figures takenfrom official Apple andGoogle reports and state-ments.


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Table 1. Apple AppStore and Google Play differences.

Criteria Apple AppStore Android Market

Platform (OS) iOS Android OS

Platform source code license Propietary Open Source

Licensing costs 99$ Yearly $20 one-time fee

Revenue share 70% Developers30% Apple

70% Developers30% Google/Telco carriers

Billing Mechanisms ITunes Google CheckoutCarrier Billing

Refund policy Not allowed Users can return any application before 15 minutesafter the purchase

Development restrictionsAttempted to limit development tools andprogramming languages. Restrictionrelaxed in June 2010

Available open source development tools. Freedom tochoose any development tool, programming languageor framework.

Application submissionrestrictions

Review guidelines discourage submission ofamateur, unpolished applications

No restrictions.End-User Programming is enabled through GoogleAppInventor

Development tools Closed IDE for specific OS (XCode), andadditional supporting tools

Open Source reference tools (Eclipse-based). Freedomfor different approaches

Approval ProcessInternally managedRestrictive criteriaPessimistic publication

CrowdsourcedPermissive criteriaOptimistic publication

Typical Approval Time One week Almost Instantaneous

Partnered Telco Operators Initially one per country, open to all sinceJuly 2010 Every major operator (with some devices sold exclusively)

Main ProgrammingLanguage Objective C Java

Device vendors supportingthe platform Apple Open Handset Alliance (20 members including Sam-

sung, HTC, and Motorola)

Device modelsIPhone (2G, 3G, 3GS, 4, 4S), IPod Touch (4editions)IPad (3 editions)

>200 (midrange and high-end smartphones, tablets)

Hardware heterogeneity Fixed platform with yearly device upgradesMinimum set of capabilities but large flexibility for devicemanufacturers (e.g. physical keyboard or not, multiplescreen size and resolutions, touch control technology)

Platform customizability Disallowed. Applications overlapping exist-ing functionality are rejected

Base platform functions (e.g. keyboard, authentication),can be replaced by market applications

Application Install sources Exclusively the AppStore Google Play, alternate markets (e.g. Amazon Appstore),apk files

Look and feel Homogeneous (safeguarded by by approvalcriteria, device characteristics)

Large diversity in hardware and software user interface.Point of vendor differentiation.Danger of fragmentation


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for AppStore submissions takes several days. Inorder to better describe both approaches, wepresent in Fig. 3 two state diagrams with the cur-rent approval and publication processes for thetwo platforms.

The left side of the picture shows the App-Store approval and review process. Whileentrance to the process is open to everybody,there are multiple controls and filters beforeapproving applications for sale at the store.Apple manually inspects every submission, apply-ing its defined review criteria. The review caneither approve its release to the market or rejectthe application, including in this case the ratio-nale for the decision. In this case, the developercan develop a new version, addressing Apple’sobjections, and submit it again to the process.Since its inception, this process has been inter-nally optimized and clarified, in order to addressthe complaints about lack of transparency andexcessive review time. As an example, sinceSeptember 2010, the list of review criteria ispublic, allowing developers to preemptivelyaddress most of the concerns.

On the other hand, the Google Play approvalprocess follows an optimistic approach. Submit-ted applications are automatically checked (forsecurity concerns) and immediately published tothe market. The acceptance criteria are checkedthrough crowdsourcing. Developers are liable forthe submitted applications, and users detect andreport unacceptable applications. After sufficientreports are raised, the suspicious application isinspected by Google, removing it if the reviewsare founded. Malicious applications can bedetected by users before any installation, as theOS shows the user what services and permissionsit will use from the phone (e.g., accessing thecamera, Internet connection, location informa-

tion, or performing calls). However, thisapproach brings additional risks, as it can behard to understand the impact on battery con-sumption, mobile data, or privacy implied by therequested permissions

The differences between both approaches areclearly seen. The AppStore model exercisesstronger control, which is supported by thepower of its brand, as well as its status as thelarger and most mature application ecosystem.Google Play approach is riskier, facing dangerssuch as increased application piracy, potentialfragmentation of the ecosystem due to the het-erogeneity in devices, or a flood of low-qualityapplications that ruin the user experience. How-ever, their adoption of the open mobile innova-tion paradigm enables faster evolution [13],allowing it to complete against a more estab-lished platform. Hardware-wise, the diversity indevices opens up the range of potential cus-tomers. Regarding software, there are manyapplications that could not be approved underthe AppStore, because their innovations com-pete with the core platform services, which canbring additional value to the ecosystem (e.g.,innovative keyboard input methods or windowmanagement systems).

According to app developer surveys [13], theGoogle Play approval process is more popular.However, we believe that consumer trust of theindividual applications from the platform isinfluenced by the approval process, and conse-quently the willingness of users to pay. App-Store’s initial control protects against maliciousapps, whereas Android users have to assess thetrustworthiness of each application and develop-er. While trust is not the only factor, the majori-ty of applications are free in the Android market(65 percent), whereas the same percentage rep-

Figure 3. AppStore and Google Play approval processes.

Android market approval and review processAppStore approval and review process

Decision

[ko]

[ko]

[ok]

[reports<threshold]

[reports>threshold]

User report /reports++

Developed

On sale

Submit /automatic check ok

Retire

Process

Submit

Apply changes

Retire

Retire

Release

[ok]

In review

In review

decision

Developed

Rejected

Awaitingreview

Acceptedfor sale

On sale

The differences

between both

approaches are clear.

The AppStore model

exercises stronger

control, which is

supported by the

power of its brand,

as well as its status

as the larger and

most mature applica-

tion ecosystem. The

Google Play

approach is riskier,

facing dangers such

as increased applica-

tion piracy and

potential fragmenta-

tion of the

ecosystem.


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resents paid applications in the AppStore.2 Onthe other hand, one of the fastest growing alter-native Android stores, the Amazon AppStore,has a percentage of paid applications similar toApple AppStore.

These processes are continuously evolving inorder to adapt to changes in the ecosystem aswell as to react to competitors. AppStorerequirements were less strict when the marketwas less mature, and turned progressively morerestrictive. However, recently Apple has slightlyopened its policy (e.g. relaxing restrictions onwhat programming languages are apps devel-oped with) because of the competition. On theother hand, Google Play is favoring developerswith new measures (harsher return policy,authentication services for piracy fighting —which is substantially easier on a more openplatform), and improvements of the consumerstore experience.

The difference in approaches can also beseen when analyzing how both platforms nur-tured a critical mass of applications, initiatingthe positive feedback loop. The AppStoreattracted from its inception considerable devel-oper interest, thanks to the combination of aninitial installed base of several million devicesand an application model with considerable ben-efits for the developers. In the case of GooglePlay, a critical mass of applications was gatheredby a combination of incentives. First, as dis-cussed, they initially embraced an open platformmodel to attract developers, including opensource development tools. The install base wasalso fostered by offering a wider array ofAndroid devices, as well as freedom to select themobile operator and data plan compared to theinitial iPhone restrictions. Additionally, they pro-vided high-quality versions of the leading Googleservices (e.g., mail and maps) as Android appli-cations, with features not available in competingplatforms, such as GPS navigation. Finally, theyorganized application developer contests (withtwo editions of the Android Developer’s Chal-lenge), with important monetary prizes that pop-ulated the ecosystem with a large number of freeapplications.

DISCUSSIONWe have presented in this article the mobileapplication store model and its main two imple-mentations. Both are linked to a developmentplatform, the iOS and Android operating sys-tems, competing directly with the remainingplatforms: Symbian, Windows Mobile 7, andBlackberry. In this market, application storeshave become a fundamental factor for success orfailure. Therefore, the concepts described in thisarticle can also be applied to these initiatives. Asan example, we have presented the approach fol-lowed by Google for attracting developers to thestore and platform. In order to nurture theirecosystems, competing application stores mustfind a way to bring that value to their platforms.However, the need to gather a minimum amountof applications and consumers limits the numberof potentially successful initiatives.

The nature of a successful application storeecosystem depends on a complex combination of

multiple factors (trust, brand, platform services,user profile, supported devices). We believe thatthe decisions on how to implement the applica-tion store model have a significant impact in theresulting ecosystem. Both analyzed approacheshave created a positive feedback loop, but theeconomic nature of each ecosystem differs sig-nificantly (in this case, with the Apple Appstorebeing more satisfactory revenue-wise for devel-opers [13]). As an example of those differences,several top applications in both systems pursuedifferent monetization strategies (as an example,Angry Birds is a premium app in the Apple App-store, while it is ad-supported in Google Play).

Another relevant question is about whetherthere is room for specialized application storesin addition to generalist stores. As the numberof applications keeps growing, finding qualityapplications and offering them to potentiallyinterested users becomes a major challenge. Apotential way of addressing this problem is tosegregate specialist stores, offering professionalapplications for a sector, a specific age sector,or tailored for a local region. The general longtail principle that powers the applications canbe applied to the store itself, as long as a criti-cal mass of interested consumers can be gath-ered.

We have limited this study to mobile applica-tion stores. However, there are other successfulapplications of this model: The tablet market isthe best known example, but also digital gamedistribution for consoles and PC platforms fol-low similar principles and have recently experi-enced considerable growth. This has motivatedmultiple attempts to replicate this model in addi-tional domains and markets. There are ongoinginitiatives to create application stores for operat-ing systems, web applications, television systems,or vehicle systems. This expansion of the modelraises additional questions, such as the relation-ship between the life cycle of the developedapplications and the execution platforms. Differ-ent device types show different usage habits andfavor different types of applications, raisingsome concerns about the convenience of a uni-fied store.

In summary, the model benefits providers,and it is simpler and more limited for the users,at the same time improving user experience.Consequently, as long as users keep demandingthis model, it can be successfully extended toadditional domains and device types, where thepossibility to create an ecosystem exists.

When analyzing the impact of the mobileapplication store model to existing stakehold-ers, telecommunications operators have beenaffected the most. Their controlled semi-walledgardens did not create a thriving content andapplications ecosystem, and have been com-pletely replaced by application stores. Today,operators face the risk of becoming a mere con-nection pipe for transferring value from devel-opers to customers, without receiving additionalbenefit from it. Additionally, the forecasts forrequired bandwidth usage point to an enor-mous increase in demand, due to the expectedgrowth in the smartphone installed base. Onone hand, this can lead to a revenue increase,but on the other hand, it forces them to invest

As the number of

application keeps

growing, finding

quality applications

and offering them to

potentially interested

users becomes a

major challenge. A

potential way of

addressing this prob-

lem is to segregate

specialist stores,

offering professional

applications for a

sector, a specific age

sector, or tailored for

a local region.

2 Statistics taken fromDistimo’s ApplicationStore Reports.


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