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Jobs: Catch the App Store if you can

Summary: Apple CEO Steve Jobs had a simple message for all the App Store rivals trying to emulate the iPhone maker's model: Good luck catching us.Apple marked the first birthday of its App Store and noted the following about what is becoming a business model moat in the wireless business:1.

Larry Dignan

By for Between the Lines |

Apple CEO Steve Jobs had a simple message for all the App Store rivals trying to emulate the iPhone maker's model: Good luck catching us.

Apple marked the first birthday of its App Store and noted the following about what is becoming a business model moat in the wireless business:

  • 1.5 billion apps downloaded;
  • 65,000 apps;
  • An army of 100,000 iPhone developers.

You can quibble with Apple's timing---technically the App Store tuned 1 on July 11---but that's one helluva moat. In a statement, Jobs indirectly noted a laundry list of rivals---Research in Motion, Nokia, Android, Microsoft and Palm primarily---all trying to replicate the App Store. Jobs said:

"With 1.5 billion apps downloaded, it is going to be very hard for others to catch up."

The App Store is one of the primary reasons that the iPhone has been a hit. Piper Jaffray analyst Gene Munster on Tuesday said that Apple is likely to deliver better-than-expected iPhone sales for its June quarter. Munster writes:

We believe upside to Mac and iPhone units could help Apple beat Street estimates for the Jun-09 quarter. Our survey of 256 iPhone buyers, along with indications from AT&T leave us confident in our iPhone est of 5 million in the June quarter vs. the Street at about 4 million.

The big picture here is that the App Store has rewritten the rules in the wireless business and Jobs knows it. Apple has first mover advantage and isn't likely to ease up. As Bernstein analyst Craig Moffett noted Apple has been very disruptive to the wireless industry and the fun is just beginning.

The industry tug of war will revolve around devices and carriers as dumb pipes. Indeed, consumers are increasingly thinking of their smartphone as application delivery devices more than handheld for email and phone calls. The vendors that make apps easy will win. Wireless carriers see the shifts coming and some such as Verizon Wireless are already playing around with an application marketplace, according to GigaOm.

Simply put, carriers have no desire to be a dumb pipe to deliver access. Apple's march could easily relegate carriers to dumb pipe status. It's an interesting development that will take years to play out.

For now, Jobs has thrown down the gauntlet to its competition. Catch the App Store---if you can.

Topics: Mobility, Apple, Networking, IT Employment, Wi-Fi

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63 comments
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  • Why should the wireless carriers

    be any different from:
    1. my electricity utility
    2. my water utility
    3. my gas utility
    4. my ISP
    5. my sewer/wastewater company ?

    I don't want the wireless carriers to be any different. I want to be able to switch from one to another with almost zero switching costs.
    davebarnes
    Reply Vote

    • I am not sure what you mean?

      I think most utility companies such as Water/Electric/Gas/Wastewater are run by a city or county municipality, and are typically controlled monopolies, and are not likely competing with anyone.

      But if you mean in terms of not requiring contracts, I have seen some ISP's requiring service contracts to get a certain rate or promotion. But you almost always have an option to tell the cell companies that you don't want a contract, but you will likely be required to buy a phone outright.

      I guess you really need to define "Switching" costs.
      xXSpeedzXx
      Reply Vote

      • Meaning.....

        The utility companies provide utilities to my home without caring what TV or internet service I choose to use (Cable or satellite, Broadband or DSL). They provide a service that I pay for, the middle men with no say in anything else. Why should carriers be any different in 2009/10?

        Verizon wants to fight to keep its draconian ways by not playing nice with other App stores. They want to create their own "App Store" and platform, and probably make it hard for consumers to get access to a Rims App World, or a Windows Mobile Store. That's not only providing the utility service, but its also requiring me to buy only Verizon's Internet service and Verizon TVs in my home.

        The playing field has changed thanks to Apple and the iPhone and someone needs to remind Verizon this. Its all about the Apps now, and making it a seamless process to consumers.
        dave95.
        Reply Vote

      • Well, no !

        Maybe where you live utilities are a public service.

        Around here, the electric is a co-op. Waste services are private
        companies.

        As for phone, you get to choose Ameritech or... whatever.

        So the above poster makes a valid point. Why shouldn't phone
        carriers be anonymous, faceless entities with no power over the
        consumer?

        Maybe because THEY don't like the idea of being powerless... the more
        services they provide the harder it will be for you to switch carriers.
        Jkirk3279
        Reply Vote

  • Call me ignorant

    But .65 apps per developer after one year does not sound all that impressive to me. Perhaps that's just the number of registered developers, rather than the number of truly active developers.
    Michael Kelly
    Reply Vote

    • .65 apps per dev

      [/i]Perhaps that's just the number of registered developers, rather than
      the number of truly active developers.[/i]

      That's what I'm thinking. There are several devs out there with multiple
      apps. so that means many more with none if there are 100,000 devs but
      only 65,000 apps. It's gotta be devs that registered then either never
      followed through with an app, or just haven't released it yet.
      JakAttak
      Reply Vote

      • Hard to calculate

        Some devs have multiple apps, some apps would have multiple devs
        working on it. Some would be writing for jail broken phones.

        And some would be students. I understand that even Stanford now has a
        class on writing apps for the iPhone/touch.

        I can also see short term apps, like the 08 Election apps that would
        properly be pulled at this time. And apps that are moving towards
        market, but have requirements outside of Apple's. FDA approval is one
        really big area that would delay apps.
        Ken_z
        Reply Vote

        • rejected apps

          Also, don't forget the developers with apps that were
          rejected by Apple for various reason.
          Yuniverse
          Reply Vote

        • other reasons to register as App Developer

          I had to register as an App developer in order to download Apple's iPhone
          Simulator application, to test my Web pages in the iPhone environment.
          So not all registered developers are actually *developing* anything.
          keithparks
          Reply Vote

        • re: hard to calculate

          I can see that getting FDA approval for (what?) the preservatives used in
          iPhone apps would be a huge delaying factor.
          rahbm
          Reply Vote

  • RE: Jobs: Catch the App Store if you can

    There are pobably about 5 "useful" things an app can do that smartphones don't all do out of the box: 1) Office stuff, 2) Social networking stuff, 3) Internet widgets (weather, etc.) 4) GPS stuff and 5) Games. That means, all a phone needs to be competitive is to have excellent apps in those 5 categories, and only in games (which matter not to business) does Apple have a formidable lead. Too bad the iPhone is a crappy platform for games (no buttons), so even that lead is less than it seems.

    I think the rest of the industry will be fine.
    x I'm tc
    Reply Vote

    • Hehehe

      ...another jealous blackberry user, eh? Have
      ever tried some of the games for the iPhone?
      Obviously not. Developers have created some
      excellent games for the iPhone that are
      helladdicting.

      Every person that makes comments like yours
      just advertises their ignorance to those who
      have seen what a wide variety of apps are
      available for the iPhone. It's the number 1
      cellphone for a reason. Go ahead say it: I dare
      you to say it's just Apple fanbois buying the
      iPhone. :) You KNOW what comes next right?
      deanrobinson@...
      Reply Vote

    • you're quite wrong

      You were doing ok until you made a sweeping statement about the iPhone being a crappy game platform. You simply do not understand the appeal of a simple to play games on a device that you carry everywhere you go. Both my 6 and 10 yo's have DS's but prefer to play on my iPhone more often than not games like Sally Spa for my daughter and Cube Runner for my son. Sally Spa costs a mere 99 cents and Cube Runner is free. Trust me, I'm a Windows person through and through, but I have to admire the iPhone for its ingenuity.
      nothingness
      Reply Vote

      • Um, wha?

        There are certainly lots of games available for great prices on the iPhone! Personally I was psyched to see the redo of Archon. But seriously, no handheld game unit would dare to ship without buttons because buttons are inherently superior -- for one thing, when you touch the screen, you are <i>covering</i> it!!! For another, hand controls are totally imprecise and all those accelarometer games are <i>aweful</i>.

        But no, I am not a jeolous Blackberry user. I am a jeolous Pre user (although <i>my</i> phone actually gets reception!) with an iPod I never use (doesn't work with Rhapsody) who nevertheless recognizes that buttons are good for games.
        x I'm tc
        Reply Vote

        • Project Natal

          http://www.xbox.com/en-US/live/projectnatal/

          No Buttons.

          Buttons may someday become a thing of the past. Welcome to the 21st century.
          xXSpeedzXx
          Reply Vote

          • Project Natal

            ...Looks cool. I missed where its touch screen was, though...

            And when is it coming to my iPod, exactly?

            But seriously, the iPhone has lots of great games. It has them because it is a very popular platform and thus there are boatloads of money to be made, not because it is a <i>good</i> platform for games. Touch screens are great! My old Treo had a Touch screen and I missed it terribly when I went to a Nokia E71. My Pre has a touch screen and I love it! And yes, I wish there were more games. But it isn't going to be as good a gaming platform as a PSP or DS, because even the buttons it has aren't designed for games.

            To argue that buttons wouldn't make the iPhone a better <i>gaming</i> platform is totally naive.
            x I'm tc
            Reply Vote

    • really?

      "Too bad the iPhone is a crappy platform for
      games (no buttons)"

      Tell that to EA, Gameloft, and the other game
      publishers who are seeing million dollar sales on
      the iPhone platform. Tell that to customers
      buying games for the iPhone. Really, if you are
      not well versed on a topic, its best to stay
      quiet less you risk being exposed as ignorant.
      mrgoodall
      Reply Vote

    • Crappy platform for Games?

      "Too bad the iPhone is a crappy platform for games"

      I guess it depends on the type of games you play. I've become
      addicted to Tower Defense style games, which are fantastic on a touch
      screen. 'Button mash' fighting style games are definitely better on a
      gaming device with dedicated buttons, but most puzzle/racing/card
      type games are easily played w/o hardware buttons.

      While I'm not a serious gamer, I do have a DS with about 15 games
      and a CFW PSP with several hundred games (thanks, sister-in-china),
      neither of which I've played for more than an hour combined in the
      past 6 months. Compare that to my iPhone, which I get about 1.5
      hours of gaming in a day (commute, lunch break, elevator, etc).

      Perception has something to do with it as well - whip out an iPhone at
      work = he's probably doing something productive. Whip out a DS/PSP
      at work = he's definitely not doing anything productive.

      Gritztastic
      Reply Vote

      • LOL

        I also LOVE the geoDefense game! It's very addicting.
        My wife hates that i'm on it so much.

        "Perception has something to do with it as well - whip
        out an iPhone at work = he's probably doing something
        productive.
        Whip out a DS/PSP at work = he's definitely not doing
        anything productive."

        LOL agreed!
        Yuniverse
        Reply Vote

    • New areas are developing

      While you focus on 5 primary areas the iPhone is attracting a lot of
      focus on various areas. Medicine is one very hot area for developers
      and you'll find articles on this move.

      I have several medical apps on my iPhone, including one for Diabetes
      management, ICE information, etc.

      I would suspect that there are a lot of industries that are looking at
      potential apps, like engineering, law, etc.

      I would think it wise to consider the iPhone/touch platform as a
      handheld computer platform where one model has a phone attached.
      Right now we are about the "8086 PC" stage of development, with a lot
      more to come.
      Ken_z
      Reply Vote
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