Apple keeps the app store pretenders at bay

It's amazing to think that mobile application stores didn’t exist 18 months ago, such has been their phenomenal impact on the industry. Launched in July 2008, Apple's pioneering 'App Store' (now a colloquial term though still an Apple trademark) currently boasts over 100,000 applications and recorded its 2 billionth download in September; not bad for a device with a fraction of the installed base enjoyed by the big five device vendors. Apple has always played down the revenue-generating potential of App Store (preferring to position it merely as a tool to lock in customers to its platform), though analysts have predicted that it is likely to become a billion dollar business by year-end.

The inevitable rush by rivals to replicate the success of App Store was a key theme of this year, though none have yet to threaten Apple's dominance. Indeed, some players seemed so desperate to join the apps party that they rushed out stores that were substandard by comparison. Nokia (still the clear market leader in apps-capable smartphones) is a good example; its attempt to combine its disparate array of services (and third-party apps) into its 'Ovi Store' was poorly received on launch and is planned for relaunch next year. Even Google's attempt (Android Market) has recently attracted criticism. Such a disparate apps environment is unlikely to be sustained longer term, and we predict that there will be significantly fewer app store platforms up and running in a year's time. Moreover, we predict that competition to Apple is likely to come from operator-backed stores rather than vendor efforts; the Joint Innovation Lab (JIL) initiative, the mobile software alliance comprising Vodafone, China Mobile, Japan's SoftBank and Verizon Wireless, will be a serious contender in 2010.

(This article is part of a series of predictions for 2010 from the GSMA Intelligence team.)