BMW is developing an app store in support of its iDrive offering. Source: Flickr user jeffwilcox
The app-store model may be moving beyond mobile in a big way. But how well can the entrenched wireless players compete if everyone is an app-store operator?
That’s what I began to wonder after iSuppli reported last week that the automotive industry is embracing smartphone-like applications. BMW is developing its own branded app store and Parrot has showcased an Android-based device that offers “automotive implementation of all smartphone features.” Nokia is expanding into the automotive market, too, with a solution that integrates a smartphone with the car’s in-dash computer systems.
And the app-store distribution model seems a natural fit for other industries and platforms. It’s easy to imagine cable and satellite TV providers establishing their own stores, delivering casual games and other interactive offerings directly to consumers through their set-top boxes much as they deliver on-demand video today. Indeed, Microsoft’s Xbox and Sony’s PS3 already enjoy the support of app-store-type systems that distribute games and videos as well as game-enhancing avatars. The next step: embracing mobile as connectivity expands from phones and laptops to a host of consumer-electronics devices, and enabling users to play the same game — or platform-optimized versions if it — on different devices.
Similarly, app stores are likely to move beyond narrow, platform-specific markets and into broader distribution models. I’ve speculated that an app store is likely part of Facebook’s plans, and rumors are circulating that Amazon may join the fray.
It’s those latter two that ultimately could be a threat to mobile-specific stores. Facebook boasts a jaw-dropping 300 million users, has a solid track record among developers, and has launched an in-house payment solution. Amazon, meanwhile, posted $4.65 billion in sales during the second quarter of 2009 and earlier this month introduced payment-processing tools for mobile phones. Uptake of Apple’s App Store — which has been a revolution in mobile data — pales in comparison: just 20 million-plus iPhones have been sold and Apple generates a projected $3.3 million a day (or $297 million per quarter) through its App Store.
The established mobile players have some substantial advantages over any would-be competitors from outside the mobile world, of course. Consumers won’t want to establish accounts at multiple app stores and shop at device-specific outlets every time they want to check out the latest offerings, which is why I think interoperability will be crucial for any player’s long-term success, and why I think Nokia and Parrot have the right idea.
Smartphones will also have an opportunity to serve as a kind of vehicle for apps, enabling users to access them in multiple ways from multiple devices. A phone can serve as an extension of a console game, for instance, allowing users to play the title away from home and sync with the console as he progresses through the game. Conversely — and as Nokia’s solution demonstrates — the car can serve as an extension of GPS-based, web-enabled smartphone apps, integrating information such as fuel levels and engine-status updates with directions to local gas stations and mechanics.
Apple seems particularly well-positioned to withstand an assault from outside the mobile industry: In addition to its massive edge as a first-mover in mobile, it delivers apps to a non-cellular gadget (the iPod touch) and its App Store is a component of the massive iTunes business — an operation that could be expanded to TVs for a true multi-platform play.
The iPhone’s momentum continues to grow, and Apple won’t soon relinquish its crown as king of the app-store space. But Google’s Android is just beginning to get legs, and newer players like Research In Motion’s App World and Palm’s App Catalog are still in their infancy. So the emergence of a huge player looking to distribute apps to a host of different kinds of platforms could create tremors as it lumbers onto the field.