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For the past month I have been transfixed by all my wireless applications on my iPhone from Apple (AAPL). Now MSFT, T-Mobile and GOOG are entering the fray! AAPL’s iPhone App Store reported 60 million downloads and revenues of $30 million in its first month. Developing a marketplace to sell mobile applications developed by 3rd parties is growing by leaps and bounds with three new powerhouse entrants this week.
Enter GOOG: Last Thursday, Google announced it will host a new applications store called Android Market and unlike AAPL will stress that Android act as a central point of distribution rather than to filter content. They are choosing to use the YouTube distribution method. This also puts GOOG in an unusual position of both challenging and supporting AAPL’s iPhone software goals at the same time. This conflict of interest has even affected AAPL board meetings where Eric Schmidt, CEO of GOOG, has had to occasionally leave the meetings when those sensitive issues are addressed. The first Android phone isn’t expected until late Fall and it is rumored that Android Market will ship as beta and that only free apps will be available at first. A payment system and paid applications will follow later. Analysts have not factored into earnings this potentially lucrative marketplace and it’s subsequent revenues. GOOG share price has been under pressure lately
due to their last earnings disappointment and also concerns on future headwinds from currency exchange pressures on overseas revenues due to recent dollar strength. If GOOG can accelerate revenues from YouTube and GOOG’s Android Marketplace this should help counterbalance those future currency effects.
Here is a shot of GOOG’s Android Marketplace:
Enter T-Mobile: T-Mobile has also opened its own store. and is also in partnership with GOOG’s Open Handset Alliance, which not only promotes Android but pushes the notion of open software development for cellphones.
With a single go-to location for apps, T-Mobile could potentially upturn the normally closed US cellular market, which has only recently begun to loosen its control over which programs customers can run with initiatives such as Verizon’s Any Apps, Any Device and Sprint’s unrestricted, WiMAX-based Xohm network. Still, the prize for T-Mobile is said by one developer to be less about revolutionizing the phone market and more about creating an allure for its service that transcends any one handset, in contrast to AT&T’s dependence on the iPhone and other star devices.
“The App store was a big deal, but that’s one phone,” the anonymous developer says. “This is an entire carrier.”
Enter MSFT: No software party is ever complete without the 800 lb. Gorilla. Today MSFT announced plans for “Skymarket” its applications store for Windows Mobile 7 in 2009. Interestingly, MSFT is choosing to enter the marketplace arena even when it presents a philosophical dilemma. In essence they are choosing to embrace this “platform” due to the increasing popularity of easy distribution applications and innovative software products. The potential profit and revenue is of course a compelling reason as well. There are also possible synergistic collaborations and ideas which could be born from these market places to core company software products. The philosophical question comes to the balance of this new marketplace which could be a threat to MSFT’s core business and the development of a possible new MSFT which embraces the democratization of software revenues with 3rd party providers. MSFT is now on the hunt for such a person to lead the new program.
MSFT’s slide in recent years in the smartphone market has been due to the success of the iPhone and also the rise of the RIMM Blackberry. As of now MSFT currently recommends developers join Handango which takes a cut from between 40% and 70% of mobile developer’s revenues. One thing is for certain and that is “Mobile Computing” is the future and it is important for the biggest players to be involved. It seems that the acceleration of this phenomenon has just increased velocity with the rise of the Mobile Developer Community and the expansion of platforms. It seems that the wireless war just got hotter and that small developers are now the elite foot soldiers.
Enter RIMM: What is RIMM’s next move? A partnership or an organically born mobile app marketplace? They too have a philosophical dilemma much like MSFT but they are also at a greater advantage due to the popularity of their products and their sheer mobile consumer coverage. We will be waiting.
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