There is no doubt that with the release of the App store in ...


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There is no doubt that with the release of the App store in ...

  1. 1. One of the greatest inventions in 2008 was the launching of the App store by Apple in July of 2008. “Apple's decision to develop a new model—its App Store—marked a radical shift for developers and users in mobile software distribution.” (Faas, 2009) Apple is continually expanding its applications in order to allow for better mobility for businesses. “Within the past few months at least a dozen additional offerings have come online at the App Store that were designed to give iPhone owners a mobile channel into employers' computer systems.” (Weier, 2008) Apple has opened a door through which virtually every company that develops smart phones is going through. Apple has started a revolution not only in the smartphone industry, but also in the development of software and applications. In order to continue its new success and stay ahead of the competition Apple must expand this new success into new products and services. When Iphone 3G was released it did not catch anyone by surprise. It was a long awaited product and the buzz it was generating was tremendous. Current Iphone users were anxious to see the new model just as much as people who were considering buying the product for the first time. However just as much buzz as the new Iphone was creating, was generated by a brand new Apple product – the apple store. It was an unknown that had everyone talking about it. “The real story with the iPhone is what we don’t know yet: What all the new software that will become available for it will be.” (Saul Hansell, First Reviews of the iPhone 3G: Faster Browsing, Better Voice, Shorter Battery Life) Iphone 3G was released July 11, 2008. The App Store immediately became a very popular toy. This phone was much more than just a phone and the users raved about it. “If you have an iPhone, you just might forget the device is capable of making phone calls, since you’ll be so busy updating Facebook pages, coveting your neighbor’s co-op and wielding your handset to swerve around virtual racetracks.” (Rik Fairlie, Sampling the Best of the iPhone App Store’s Diversions). When the App Store was introduced to the public July 11th there were about 500 apps. Some of them were free and most of the others were just $9.95 or less. The App Store was created to be as user friendly as possible, so that downloading and using the apps is easy. “The App Store is simple to use, thanks to its elegant and intuitive interface.” (Rik Fairlie, Sampling the Best of the iPhone App Store’s Diversions). There are numerous categories of the applications that cover all possible needs in the user’s life. The application that has generated the most positive reviews is the built in GPS. However that is just the beginning. It is impossible to list all of them, but a short list of the best ones should provide an idea of what is available. For entertainment there’s the BoxOffice which is a free application. BoxOffice utilizes the iPhone’s G.P.S. capabilities to find movies nearby. The available games are incredible. One of them is Crash Bandicoot Nitro Kart 3D. Unfostunately it is not free - $9.99. You can just flip your iPhone horizontal and steer the car by tilting the phone to the left and right. There’re even apps for related to healthcare. Epocrates Rx is a free app which is a prescription-drug database. It could help a regular person by spelling out common medication dosages for adults and children, side effects, interactions with other medications and even photos of the pills to help identify medication. And of course there’s an incredible amount of excellent apps for socializing and everyday life. Yelp is a mobile version of that has been around for years and it is free. Facebook and MySpace are also available, so that the users profile statuses never ever go stale. And those 500 apps was just the beginning. 8 months has passed since the App store was released. “More than 25,000 applications have been created for the device, and they have been downloaded more than 800 million times over the last eight months.” (Brad Stone, Apple Shows Off Next Version of
  2. 2. iPhone Software) So far the App Store has been a huge success. It was one of the best Apple inventions. It has truly changed how the users view smartphones. However, equally important point is how it has changed Apple. “AT&T have adjusted their relationship so that Apple no longer gets a share of the revenue stream from the carriers - rumored to be as high as 30%.” (Will Apple look to mobile advertising revenues?). The new release changed the structure of Apple’s Iphone revenue. Mobile advertising is a very new industry, and Apple decided to capitalize. “Mobile advertising revenue streams are in their infancy but Apple has all the foundations in place to take advantage of what will become a huge business. One to watch. (Will Apple look to mobile advertising revenues?). Apple has taken significant steps to creating a dominant platform for the mobile industry with incredible amount of products available. It is also about to release a new operating system that will follow a similar path as Windows did for PC’s not too long ago. In addition to Iphone’s this OS will be available for ipod’s as well. “Apple said the new operating system would be available to current iPhone users at no charge sometime this summer. It will sell for $9.95 to owners of the iPod Touch.” (Brad Stone, Apple Shows Off Next Version of iPhone Software). Only time will tell how successful Apple is by using the App store to generate mobile advertising revenue. Right now it certainly appears as if a serious attempt at the market is being made. The available funds are certainly there for the taking. “People like the fact that if they have a $100,000 media campaign, $95,000 is running on traditional Web sites and $5,000 is running on a phone. It makes them feel cutting edge.” (William-Arthus Haynes, Advertising gets mobile). The App store is certainly a very exciting product. It is also a very new product, in the very earliest stages of development. It’s impact on the industry has been tremendous and nothing indicates that it will slow down in the near future. The iphone has opened the door for software development since it's beginings in July 2008. Because Apple's operating system was less popular in the desktop market, developers were less likely to create new software for the platform. So, Apple had fallen a bit short in this area. Hence, Steve Jobs and company had the idea to create the App Store. The original aim was to give developers a platform that would allow them to develop applications cheaply, but have mass distribution. In theory, this would easily allow for garage run software businesses. The iPhone Software Development Kit enables developers to quickly develop applications on their desktop, test them, then upload them to the App Store for distribution. This can reduce the development time from months to weeks. The cost of the SDK is free, but it costs $99 to have the application uploaded to the App Store. Once there, Apple will take 30% of the price of the application (or nothing, if the application is free). At the time of its inception, this software distribution model beat the competition, like Nokia, who charged 50% of the price from its developers. Apple decided to use a similar Operating System on the iPhone and the same programming language is used to develop iPhone applications as those for Mac OSX. This also gives developers an edge in that it takes less time to learn how to create applications on the newer platform. However, it does lock them into owning a Mac since the SDK cannot be run on any platform other than Mac OSX. It's been difficult for some developers to make money. Some have released applications for free and later charged a moderate fee, Tapulous is an example. Originally, the startup company gave away its eponymous game for free, but now charges $4.99. Another model, used by TD Ameritrade, is to give away software for free, but charge for services. In this case, trades. The software itself was developed by a software company in exchange for a cut of any trades. So, there is money to be made, but perhaps not as much as Steve Jobs originally believed.
  3. 3. At this point, Apple has set the defacto standard for application development and distribution. Nokia has the Ovi Store, Microsoft will have the Windows Marketplace, Palm will have the Pre Store, and Blackberry has it's Research In Motion (RIM). Google, however, has the most interesting from a development standpoint. It's Operating System, Android, has its own software store, Android Market. Google has tried to keep its system Open Source, as opposed to proprietary. The appeal of an Open Source operating system is that developers can interface with it in an easier fashion. Open Source software is that which allows the owner to freely view and modify its source code. In addition, Google doesn't seem to be using the applications it will offer as a source of revenue. There is only a $25 one- time fee to release an application and no percentage is taken. This may attract more developers in the long run, but for now, the iPhone seems to rule. There are 400 free applications available for Android versus 10,000 for the App Store (Choney, 2008) Of course, the future of this form of software distribution leads to an interesting dilemma: which platform would a smaller software company choose to write for? Ease of development and popularity will surely be a consideration. Some feel that the basic laws of Capitalism will sort things naturally and the platforms that are more popular will rise to the top. Others, however, feel the need to develop a platform that will work for many types of phones. Thus, creating a central marketplace for all applications. Handango is such a place. It offers support for 1,000 different devices and eight different platforms. Google's choice to separate the Operating System from the hardware might actually help them with this problem as well. The operating system and its applications are mobile to different phones. At the end of the day, as the major smart phone companies follow suit, there seems to be no doubt that the App Store has started a revolution. The future of Apple’s App store involves continued expansion. The App store has been a runaway success. Apple can continue this run by evolving and trying out new products and services. While developers will continue to innovate in the App store, Apple is said to be bringing the app store to other formats. There are many rumors on the internet about Apple and netbooks. Some claim Apple refuses to join the netbook market. Others state that the time is now to jump in. Netbooks have so far been largely a Western European phenomenon. Eighty percent of netbooks purchased have been shipped there (Wilcox, 2009). According to a recent article in Computerworld, Apple has five key opportunities (Finnie, 2009). These future possibilities include delivering a lower-cost netbook-style Mac and to foster and support independent software vendors. These two stand out the most. The Macbook is the nearest thing to a netbook that Apple produces. Rumors have persisted for quite awhile that Apple is developing one. Netbooks have seen increased growth, especially during these difficult economic times. The low-cost ultra-portable “mini notebook” seems like a perfect fit for increased mobility needs as well as the recession’s tightened wallets. Businesses are also choosing netbooks instead of full-size costly laptops. Predictions indict that netbooks will have sales of 139 million in 2013(Lai, 2009). There is also the idea that netbooks will eventually merge with smartphones. As computing devices get smaller and mobile phones get “smarter”, it is inevitable that they will become one. Apple’s platform has worked incredibly for the iPhone. Apple controls the distribution of its operating system and updates for the iPhone and iPod devices through its App Store. Why couldn’t this include a netbook and eventually expanded to full-featured computers? It is believed that it would not take much for the company to construct the OS, developer frameworks and an extension of the app store to incorporate an Apple netbook (Faas, 2009). The Mac OS X has been stripped down for the iPhone. It can be modified for a netbook. The app is currently compatible on the Mac OS X, Windows XP and Windows Vista. In this capacity it serves a middleman
  4. 4. for transferring files to an iPhone or iTouch. Perhaps in the future this capacity can be expanded to actually run applications on full featured computers. It has been written that “everybody wants to build an iPhone app” (Markoff & Holson, 2008). This enthusiasm can be carried over to building apps for a variety of devices if Apple decides to go in that direction. There is no doubt that with the release of the App store in July of 2008 Apple introduced us to a whole new era of smartphones. The App store to this point has been very successful in introducing and creating new applications at an incredible speed. The ease of use of the iPhone Software Development Kit has made it easy for developers to develop applications for the App store. However as mentioned, virtually every company that develops a smartphone operating system is copying the App store. As mentioned the future of the App store involves continued expansion. While it may currently have the edge in ease of use and installation many of Apple’s competitors are quickly closing the gap. In order for Apple to keep its advantage over the competition it must branch out into fields beyond smartphones and began to make their applications adaptable to other technology.