App stores unfazed by proprietary threat

Arrival of proprietary mobile app stores such as Windows Marketplace won't topple third-party stores that can still differentiate, say MobiHand and Handango.
Written by Victoria Ho, Contributor

The arrival of Windows Mobile's own app store will not rain on the parade of existing third-party app stores, which say they still have what it takes to differentiate themselves in the market.

Microsoft last month took the wraps off its new app marketplace that would allow users to browse, download and install apps directly on their devices, without the interim step of syncing their phones to a PC.

The software giant said it expects this convenience to raise app downloads, in particular, in the "non-geek" segment of the market that are not familiar with installing apps onto their Windows Mobile phones through their PCs.

This service duplicates what providers such as MobiHand and Handango, have been offering, but these third-party stores can still deliver more than Microsoft in the app store game, company executives said.

Steve Howard, MobiHand president and CEO, said in an e-mail interview, the store offers a "substantially larger" product catalog covering 5,000 apps, compared to the 246 that Microsoft debuted with. The store also runs bundled deals and special offers not found in the Windows Mobile apps store, he added.

Howard said Microsoft faces a challenge in being able to quickly roll out apps, as it needs to coordinate telco and phone manufacturer agreements in order to bundle the app store with new phone models. In this aspect, MobiHand's network of some 200 white-labeled stores is expected to help the company differentiate from its competitors, allowing it to reach more phones and "not just the newest 6.5 phones", he said.

Microsoft previously said it intends to extend its app store to support Windows Mobile 6.0 and 6.1 phones by the end of 2009.

Handango, too, touted its market know-how. Its CEO, Alex Bloom, said in an e-mail interview: "Our ten years of experience in this space have given us the opportunity to solve many of the complex issues associated with being an app store." He listed some of these as direct billing, content and device identification.

The increasing number of different phone platforms and their respective app stores also play in the company's favor, said Bloom. With customers not tied down to one device platform, the third-party app store is positioning itself as a common platform for users to "find and manage their mobile media across the lifecycle of multiple devices", he noted.

MobiHand's Howard noted: "Monopolies generally do not serve the best interest of either consumers or manufacturers...[that] like to have choices."

He added that the efforts of Microsoft, and other phone makers, in marketing their stores aggressively is expected to boost third-party app stores' businesses. "Only a few years ago, almost no consumers were even aware that mobile apps existed, and even fewer knew how to discover, purchase and install them on their phones.

"Now, thanks partly to marketing efforts of these platform companies, far more consumers are purchasing apps," he said.

Bloom echoed this point, noting that its Windows Mobile subscriber base has become "more active and engaged with the site this latter part of the year, than they were in the first half of the year"--thanks to the media attention around Windows Mobile Marketplace.

Wider net for developers
According to the Handango, the mobile market's "increasing fragmentation" will also push more developers to common platforms. By offering developers "multiple channels" to market such as direct-to-consumers, operators and manufacturers, they are given more avenues to get their apps seen, he said.

He noted that developers also face barriers in understanding the policies outlined in the various proprietary app stores. Apple's app store policy, for example, has drawn criticism for being unclear.

Bloom said: "Developers are looking to Handango to help ease the path to accessing [proprietary] channels."

Howard said third-party app stores can ensure developers' apps stay listed and accessible to consumers, especially in the event where a proprietary store decides to remove a listed app.

He added that third-party stores also give developers that are not able to be featured on proprietary marketplaces the chance to get seen by potential users.

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