It's been two years now since the hottest cellphone of the decade was launched by a company with no experience in the handset business. Apple's iPhone, announced at the annual Macworld event in January 2007 and commercially launched in the US six months later, has since be credited with forcing 'real' handset manufacturers to rethink phone design in terms of usability and drop-dead cool. It's also been credited with jump-starting the mobile internet, with operators with iPhone deals reporting massive jumps in data usage. And it wasn't even a 3G phone.
Clearly that wasn't enough. With six million iPhones in circulation after its first year, Apple's next trick was to make it easier for users to find, download and buy apps for their iPhones - and also make it easier for apps developers to reach them. Enter the App Store, launched in July 2008 in conjunction with the release of the iPhone 3G.
The concept - which riffs heavily off of older operations like Qualcomm's BREW and firms like Handango - couldn't be simpler: a virtual storefront modeled after Apple's iTunes service where apps developers could place their apps, set their price and take their cut of the revenue. The App Store started off modestly with 500 apps ready for download, a third of them games. By the start of December 2008 that had grown to 10,000 apps.
Indeed, the short history of the App Store is packed with eye-popping numbers. The service registered 10 million downloads in its first three days, 60 million in the first month and 300 million in five months. The first-month figures alone earned apps developers $21 million. (Oh, and Apple sold a million iPhone 3G handsets in those first three days. The original iPhone took 74 days to hit that number, according to Apple chief Steve Jobs.)
The App Store's success hasn't been without controversy, with criticisms ranging from tight controls on APIs to pricing. But that hasn't stopped others from jumping on the apps storefront bandwagon. Three months after the App Store opened, Google launched Android Market for its fledgling mobile phone OS Android with 50 free apps. Palmlaunched its Software Store in December with 5,000 apps for both Palm OS and Windows Mobile - it will also host apps for the new webOS on its new Palm Pre smartphone announced at CES in January. RIM has its own app store in the works set to launch in March 2009, while Microsoft is reportedly working on its own version (rumored to be called Skymarket) that could see the light of day later this year when Microsoft launches Windows Mobile 7.
Even niche smartphone maker O2 has an app store, launched in December. Industry observers expect that Symbian will have its own software store before the year is out, although both Symbian and its chief investor Nokia have been silent on the topic. (Nokia, which has been making serious pushes into the content space via services like Ovi and Comes With Music, declined to be interviewed for this story.)
One reason for the hype is the potential impact that such virtual storefronts will have on cellcos, which up to now have mainly defined their mobile content strategies via tightly controlled decks. Before the App Store, apps developers had to deal with carriers if they wanted to get their products in front of the end-user without relying on hard-to-navigate retail websites. Now cellcos technically aren't even necessary, apart from the connectivity.
User data gold mines
Little wonder, then, that cellcos are looking at adopting the App Store model for themselves.
T-Mobile in the US (distributor of the first Android-powered handset) was the first to announce plans to create its own apps storefront in September 2008, saying that it wanted an apps store that catered to all handsets.
In Asia, China Mobile was one of the first cellcos to express interest.