One of the media obsessions that irks me is the obsession with how many iPhone apps are available in the various appstores. Latest number I heard was 87,000 or so (and it may well be 100,000 by today) with around 2bn downloads. Meanwhile the Android counter-attack with droid applications has been flooding the market with the fact that it is catching up and now has 15,000 or so apps.
What matters from a business perspective is the number of apps that are being downloaded and paid-for. The vast majority of the apps in these various appstores are free. The estimate is that somewhere between 1 in 15 or 1 in 40 of all downloaded apps is a paid-for app. So while it is interesting to see that users now have access to a wide array of free toys to play with on their phone, it doesn't do much for the economic argument under-pinning all the network and device investment.
This reference is a couple of months old but it estimates that the total revenue from the first billion downloads of iPhone apps is perhaps somewhere between $70m to $160m. While this is a nice chunk of change it is a drop in the ocean when divided between the 30,000 or so apps developers and, more importantly, looked at in perspective with the $1.5Trillion industry it is trying to change and rejuvenate. So we are still at the very early stages of this new business model and it is all still to play for.
The key metric for
Service Provider success in the apps industry is how many apps are being downloaded and paid for. Real revenue can be generated by just a few hundred excellent, fit-for-purpose apps that meet a real consumer need, and which consumers are willing to pay for. Service providers can rapidly become major players in this game, and have it within their power to turn apps into a real revenue generating business. But apart from a few notable exceptions, they are not taking the threat or the opportunity seriously yet. And by the time they wake up to the potential, Apple and Android may have stolen the game.
Posted
11-05-2009 4:01 AM
by
Martin Creaner