New analysis from Frost & Sullivan's An Insight into the U.S. Smartphone Application Storefront Market,
finds that smartphone downloads from all app stores will reach 6.67
billion in 2014. The market segments covered in this research include
prepaid and postpaid mobile, SMS and MMS, mobile Internet, iPhone,
Android, Windows Mobile, Palm, and Symbian.
"Next-generation devices are being introduced at a rapid pace, and
stakeholders are offering app stores to facilitate downloads of
compelling applications from multiple categories, serving a wide range
of communication, entertainment, information, and personalization
requirements of the mobile user," says Frost & Sullivan
Industry Analyst Vikrant Gandhi. "For example, Apple, Google, Nokia,
Palm, and Microsoft have either already introduced app stores or are in
various stages of app store rollouts and are working to ensure that the
entire service experience is compelling for the end user or device
owner."
A vast majority of applications are available 'free of cost' to the
end user, significantly driving adoption in the U.S. smartphone app
store market. These applications leverage advanced device capabilities
such as touchscreen, accelerometers, full Web browsing, and
location-based services, among others, to deliver a truly compelling
proposition.
The most significant challenge is to ensure service differentiation
and optimal management of the scale of the app store business. App
store providers should always be open to support new business models to
drive the introduction of innovative services and content types. Having
a clear value proposition is also important for mobile operators.
"Unless the app store providers establish exclusivity agreements
with application developers - something that is not feasible for a
large majority of applications - it will be difficult to provide enough
differentiation through the app stores," notes Gandhi. "The best
example of how this could be done is Apple's app store, in which the
entire experience of service purchase and consumption - including
device characteristics, form factor and the operating environment - was
a radical shift at the time of its introduction."
This does not mean that services could not be differentiated at all.
The moot point then is the extent to which providers are willing to
invest in their infrastructure to offer new service to their customers,
which then ties back into something that is still being examined -
identifying the main purpose of launching the app stores and if app
stores alone are strong enough reasons to purchase a particular type of
device.
A single participant cannot provide all the services in the mobile
content industry. App store providers need to work with multiple
application providers and offer them sufficient incentives for their
app store initiatives. Services of independent, third-party app store
providers such as Handango, Handmark, and PocketGear can also be used
to run an app store business profitably with adequate service
differentiation.
"For instance, outsourcing or white-labeling of the app store
business might become a good idea in the long run since a device vendor
or an operating system provider may not want to commit large resources
to manage the smartphone app store business," concludes Gandhi..
An Insight into the U.S. Smartphone Application Storefront Market is part of the Mobile & Wireless Growth
Partnership Services program, which also includes research in the
following markets: U.S. Premium Mobile Downloadable Content and
Applications Markets; U.S. Mobile Advertising and Mobile Search
Markets; U.S. Mobile Financial Services Markets - Mobile Banking and
Mobile Payments; U.S. Mobile Social Networking Markets; Advancements
and Trends in Mobile Video Services; U.S. Off-Deck Mobile Content
Markets; U.S. Mobile Messaging Markets; U.S. Mobile Video Services
Markets; and U.S. Mobile Connection Aggregation Markets. All research
services included in subscriptions provide detailed market
opportunities and industry trends that have been evaluated following
extensive interviews with market participants.