Mobile Sands

February 13, 2009

An Amazon App Store?

At MWC next week, Nokia, Samsung and Microsoft are expected to either showcase their mobile application marketplaces (“app stores”) or at least share detailed plans regarding them. Google has announced that its Android marketplace will start supporting paid apps next week. Blackberry  and Palm have already joined the race to build app stores. The one company that has every right to be in race, but has been conspicuously quiet is Amazon.

An “App Store” is a store

Handset vendors rushing to emulate Apple’s success may be forgetting that Apple was one of the world’s leading online retailers of digital content – long before it launched iPhone or its App Store.  Apple, in fact, launched iTunes “jukebox” in Jan 2001, 10-months before the first iPod hit the market.

Apple’s experience in selling music and video online is evident in the way it organizes mobile apps in the iTunes store, from creating top-10/top-50 lists in a wide range of categories to highlighting notable new apps and providing automated and staff recommendations.  Consumers have shopped with iTunes for years. How many handset companies have this kind of expertise?

So, why not partner with Amazon?

In coming years, for a handset to succeed, it will need a rich set of applications. People will not only buy a handset for how it looks or what it costs, but for what it does. Applications will be source of stickiness for both handset vendors and operators. Operators and handset vendors who will not have access to a large ecosystem of application developers will lose subscribers, market share and profits. See my previous post comparing Verizon and AT&T’s performance in Q4’2008.

Not only is Amazon trusted by millions of consumers and has the technology to sell in a compelling manner, but it also has demonstrated that it can succeed in selling digital content. It started a digital music store in Sept 2007 that, in 14 months, became the #2 digital music store. Still far behind Apple, but way ahead of Microsoft. With Kindle, it has shown that it can not only sell lots of DRM-free MP3, and but also work with a large number of publishers and create a profitable, new market.  Can Nokia claim such success with N-Gage?

I am all for the creation of mobile application marketplaces and wish that the new entrants succeed. I just have a nagging feeling that these attempts will look similar to the attempts of dozens of bricks-and-mortar retailers to enter the online retail business in mid-1990s.

Place in the sun for Third-party App Stores

Thankfully, all handset-platform vendors other than Apple are allowing third-parties to create marketplaces. This has allowed companies like Handango and PocketGear to be built, and is allowing Samsung to launch an app store. This keeps the doors open for Amazon to build an app superstore in the future, or for other customer-focused niche marketplaces (think Zappos) to appear.

 

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1 Comment »

  1. […] plans to build “app stores” at Mobile World Congress, I had written a blog post titled, “An Amazon App Store?”, pointing out that the ” one company that has every right to be in the (app store) race, but […]

    Pingback by Amazon to Build Android App Store | Mobile Sands — October 1, 2010 @ 2:56 pm


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