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The March of Mobile App Stores Continues

22 June 2009

The last year has seen a new phenomenon establish itself as a driving force in the mobile space: application stores. Ever since Apple introduced the concept of a uni?ed “storefront” for third-party applications for its iPhone to a mass market audience, competitors have struggled to embrace the concept and how to implement it for their own devices or services. Nokia, Palm, Sprint and Vodafone are some of the companies that have announced, or plan to announce, their own stores.

Another major player in the mobile handset space entered the application store business at CTIA 2009. Research in Motion (RIM), announced the BlackBerry App World for the USA, Canada and the UK.

One category of applications to greatly benefit from the availability of application stores is Navigation and LBS. Because of the inherent mobility of the devices for which applications are built, location will play an increasingly important part in the equation.

This article will shed light on the RIM’s effort just over two months after launch as well as examine some of the challenges facing not only RIM, but any company contemplating entering the App Store market.

BlackBerry App World
RIM introduced its long-awaited store on the first day of CTIA 2009 in Las Vegas, and the halls of the convention center were full of buzz.

After downloading the store to the device, users can search for applications according to categories, top-ranked applications or by name. There is also a tap which tracks downloaded applications and can be used to manage the user’s account. While the number of available applications was not overwhelming, that number has steadily risen since launch.

Maps and Navigation applications range from free services like buzzd and GPS Tracker to premium turn-by-turn solutions like Telmap’s Navigator or Appello Systems’ Wisepilot. Under the Social Networking & Sharing tab, applications like Flickr and BlipPlus from BlackLine GPS can be found which integrate location in image services and social networks.

Acknowledging limitations in geographical and device availability (only available in the US, Canada and the UK and only on newer BlackBerry devices), RIM released App World as a 1.0 launch—with the clear intention to tweak the system and then further expand the App World into other markets with more applications.

For RIM, the BlackBerry App World was an opportunity to show that its devices and OS are far more open platforms than popular reputation suggests. This is especially important when connected to RIM’s mission to establish itself as a platform for applications. Company representatives stated that RIM wants to be positioned, on a scale, between Google on one side (with Android being a very open platform) and Apple on the other side (with a relatively closed platform) with its application store. This position would allow for innovative applications to find their way on BlackBerry devices, while at the same time ensuring quality and user experience.

After downloading the store within minutes of it being available the author found one of the most talked-about issues of the RIM BlackBerry App World—the payment system. While Paypal has been popular, especially for purchases on eBay, RIMs partnership was a surprise, which threw users for a loop.

A more integrated payment system, especially compared to the perceived ease of use of the Apple system, would have done a world of good. Even though company representatives from RIM stated that the company has been satisfied with the Paypal payment arrangement, the author believes that a different solution has to be found sooner rather than later.

Another limitation of the Paypal system is that only one-time purchases are available. This means users can buy a yearlong subscription for Telmap’s Navigator application, yet cannot sign up for a monthly subscription.

Whether the best option is to have a system using just credit cards or a billing system which is integrated with carriers remains to be seen—RIM is not alone in this struggle to find the best answer. Nokia, for example, announced that some users will be able to charge premium content to their carrier bill, while other markets will have to make do with credit card transactions.

Overall, RIM has been more than happy with its foray into the world of application stores. Without mentioning concrete numbers, RIM reps stated that the company’s expectations for App World have been met and surpassed.

Others Follow Apple’s Lead
Besides Apple’s App store and RIM’s BlackBerry App World, the most anticipated application and content store release has been Nokia’s Ovi Store, which went live last week.

Nokia sees its application store as a continuation of its strategy to provide lasting solutions to end users. This strategy centers on Nokia providing services as well as devices to users, both being interwoven parts of a complete package and equally important. Location plays a central role in this undertaking.

A fundamental difference between application stores from Apple and RIM and Nokia’s Ovi store is that Ovi will immediately be available on a large number of devices, to large number of potential users. When the store was launched in late May, Nokia stated that users of 50 Nokia models could access the store, with over 50 million potential users.

Another handset maker looking to capitalize on the potential of an application store is Palm. The company is getting ready to release its long-awaited Palm Pre smart phone, and besides a new operating system users will be able to customize the device with applications from the App Catalog. The store is scheduled to be ready for deployment when the Pre is released on Sprint on June 6th.

Ever since Apple opened its App store, competitors have struggled with the concept, and on how to respond. RIM announced its BlackBerry App World early this year, while Nokia’s Ovi Store just went live recently. Others like Palm are planning similar stores.

Location can play a central role in making the usability case for applications to end users. Because handsets are mobile, the applications should reflect changing environments and locations.

But while users have shown a willingness to make use of new applications and stores from which to buy them, it is the handset makers and carriers which still have work left to do. Both bring attributes to the table, which are essential to building successful application and store business.

On the provider side, clear business models have to emerge—integrating carrier needs and handset-maker wishes. For consumers, questions like billing options, privacy and application availability have to be answered.

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