Third party mobile applications have been around for for a long time - ever since there were APIs and development platforms for mobile devices. I remember developing applications for a Palm III device using the Code Warrior IDE back in 2001. Microsoft also promoted Windows CE/PocketPC/Mobile development via Visual Studio and .NET from early on. In response the developer community created tons of mobile device applications that have been sold or given away for free on the Internet. So what has changed with the advent of the app-store? And why all this sudden interest? These are some of the obvious reasons for app-stores to exist:
- The host company gets a cut of the revenue. For example Nokia will get a 30% cut on each sale in its Ovi software store. The developer gets to keep the balance. In addition, by providing this portal facility to developers host companies can attract developers who create cool applications, spurring the popularity of their devices.
- The developer gets a suitable hosting platform for her applications. This includes a payment system, and users may be more willing to trust big names (Apple, Nokia) instead of a small unknown development company when they give out their credit card information.
- The user gets a one-stop application shopping solution where she can compare applications and buy with confidence since hosting companies are most likely to certify applications for compatibility, quality, security, and legal compliance before selling them.
Its not all red for telecom companies though. Smart phones and new applications are driving up data plan usage in a big way. There are some unknowns here, for example, users may start using flat-rate data plans for voice (through VOIP) and SMS (through IM and email) substitution. But will the cannibalization hurt telcos or will data plans compensate for the loss of voice and messaging revenue?