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Mobile Apps Becoming as Big as the Internet?

Yesterday, I came across a very interesting article about the mobile applications market and its future outlook.

Apps will be as big if not bigger than the internet,” said Ilja Laurs, founder and chief executive of GetJar, a leading independent mobile application store. “They will peak at around 100,000 by the end of the year. That will be a tipping point and after that there will be a gradual fall in the rate of development. The full blossom will come in ten years and mobile apps will become as popular as websites are today with consumers.”

But he also warned developers for rushing into this market blindly: “The reality is that this space is only so big and only able to support so many people. Unfortunately the overhype that goes with [Apple’s] App Store is what has driven so many to rush to develop for the market. It is fashionable to do apps and every media outlet tells you apps are cool. But the economics are a different story. The ratio of those developers who will fail is about 90%; they will simply not make a return on their investment or make a good enough living at this”.

The Symbian Foundation believes that apps will become more personal and practical as their numbers grow. To date, Apple has the most popular application store with 65,000 applications and 1.5 billion downloads so far. But other companies plan or already started following this route: Nokia with its Ovi store, RIM with its BlackBerry App World, Microsoft and Symbian, many others too (we’ll post about this soon).
The down side

But the down side when looking at those great download numbers in the iPhone’s App store is that the life cycle of an app seems not very long. Once downloaded users seem to lose interest pretty fast. A problem of which social gaming company Playfish faced with its iPhone app “”Who Has the Biggest Brain?”: “It has been played on the web by 15 million people and when it launched on the iPhone it went to the top of the iTunes chart. But it quickly fell away and I think that’s an experience many people are going through, no matter the quality or originality of the content. You are competing for the top slot in a catalogue and you cannot, no matter who you are, hold onto that slot for an indefinite period of time. Many developers are realising that its hard to reach a sustainable business in a catalogue environment because it’s a hit-driven environment.”

Lee Williams, executive director of the Symbian Foundation, thinks: “The App Store is flawed - right now [it] is just a bucket of apps. You need to get beyond that bucket and give the consumer the opportunity to wander down a really relevant aisle of content and applications that they can get access to. When this problem is solved, the type of application you will see will be about more than an iBeer drinking app or a candle that flickers in different colours.”

And what is Google’s opinion to the whole App store topic? Vic Gundotra, engineering vice president at Google, believes: “Many, many applications can be delivered through the browser and what that does for our costs is stunning. We believe the web has won and over the next several years, the browser, for economic reasons almost, will become the platform that matters and certainly that’s where Google is investing.”

Well said Google. There is no question that apps are powerful and really attractive for users because they can now customize their mobile phone to their needs. Operators cannot dictate anymore which applications should be on your mobile phone screen. Should they be worried about losing power? Steve Glagow, Vice President and Head of Orange Partner, Orange, told at Nokia Developer Summit in April this year that app stores aren’t really a threat to operators. On one hand customers nowadays keep their handset longer. On the other hand the popularity of app stores help them to make money. Most of the operators had app stores (mostly for business customers) before Apple released its iPhone App store, but customers weren’t really aware of this or interested in. With the rising popularity of applications customers now also take a look at the operator’s app store (like Orange Application Store). And the more the operators offer their customers, the less they turn away.

With Nokia’s step enabling “normal” web developers to create (web-based) apps and widgets for (Nokia) handsets the way is paved for a massive growth in this area. Now we need to find solid business models. Short life cycles of apps aren’t good news especially for advertisers since they are seeking (longer) dialogs with its target group. But a first step could be to put a focus on developing qualitative and useful apps, because in the end ’quality beats price‘…