Looking Ahead at the App Store’s Future

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Seems the App Store had a birthday Monday (more or less -- its birthday is really July 11th, three days from now, but who can blame Apple for wanting to get a week long party out of the celebration?), celebrating its first full year of operation, most of which was spent being a massive game changer in the cell phone/smartphone market.

What's a poor pundit to do with such an auspicious occasion but look ahead to the next year and try to guess what will come?

The first challenge for Apple is going to be how to split the market for the App Store without lessening its value. For instance, right now there are some 63,000 apps on the App Store, give or take a few thousand. One of the significant aspects of that number is that each and every one of the work on each and every iPhone (so long as it has been updated to whichever version of the iPhone OS that app requires).

The limitation today is not the selection of hardware, but rather the OS. So when Apple touts this or that number of apps that are available, there's no nitpicking the data, and the perceived value of all those apps applies to everyone.

While that's something we have every reason to take for granted today, that could change when and if Apple releases another device that runs iPhone OS, but has a different screen resolution or different capabilities.

I've already written about how I think Apple will indeed release some kind of touch screen device that's bigger than an iPhone but smaller than a tablet, and that I think this will be Apple's answer to the Netbook market.

When that device gets released, however, it is going to require a new class of apps that takes advantage of its characteristics. Even if it can run legacy iPhone apps through emulation (or whatever), legacy iPhones won't be able to run apps built for it.

That means that Apple will have to manage a schism in the App Store for the first time. How will the company do so?

The short answer is likely to be, "Very well -- thanks, Chompy," but it's the longer answers in which I am interested. For instance, how to browse? Will there be a new iPod Super Touch section? Will Apple require all apps be built in such a way (using a solution provided by Apple) that they run on both kinds of devices?

One would presume that iPhones would only see iPhone apps and iPod Super Touches could only browse iPod Super Touch apps, but what about when you're browsing from iTunes on a Mac or PC?

Would Apple start breaking out numbers? For instance, "We have 100,000 iPhone apps and 16,000 iPod Super Touch apps." Or would the company simply say there are 116,000 apps on the App Store?

These are trivial questions when compared to such things as actually making these devices, but they are important issues for a company like Apple where the awesome end-user experience is so much a part of the company's amazing success, and I am certainly barely scratching the surface. You've got new issues of support, new issues of quality control, new customer-training concerns.

Even if Apple never releases my so-called iPod Super Touch, eventually a new iPhone will hit the market with a different resolution or some other significant differentiated that will force a schism in which apps run where.

I'm glad I get to just write about these things instead of having to solve the actual problems.

On to another change I expect in the App Store -- if not in the next year, in the next two to three years -- and that's Mac apps. I think that sooner or later Apple will begin offering Mac OS X apps through the App Store.

It makes sense in so many different ways, I just think it's inevitable. The biggest reason, of course, is the power of convenience. One of the reason iPhone apps have sold so well is that Apple made is bloody convenient to buy and download them.

I believe many Mac users would very much appreciate the same level of convenience on their Macs. The benefit to Apple for offering this service is that the company gets to, A.) Control more of the user experience than they currently can otherwise do on a Mac, and B.) make a crap-ton of money doing it.

Truth be told, I would NEVER want for the only way to load an app on my Mac be through iTunes, and I don't think I'm alone in that. I don't want Apple, or any other company, to have that much control over what I do with my computer, and you just have to look at the controversy that has accompanied Apple's approval process on iPhone apps to get a taste of what kind of hell that could be on the Mac.

But, if the App Store represented another way for me to browse and buy apps, I think it would be awesome, especially for non-geeks. I haven't seen any recent numbers on this, but it used to be that something like 80-90% of all applications were bought and installed on new computers (Macs and PCs) within the first few weeks of owning said computer.

A Max OS X App Store would change that, especially in the causal gaming market. Hell, even Dashboard might enjoy a resurgence if you could get new Widgets through something like the App Store.

I also think many developers would enjoy such a marketplace for their wares, at least those willing to play by Apple's (seemingly amorphous and sometimes vague) rules. Apple collects the money for them, and they get access to millions of consumers already shopping on iTunes.

If the deal were the same as for iPhone App developers, 70% of each sale is more than they can hope for in most retail situations (though less than the close to 100% they get when selling it themselves online), and even if not, Apple paying for bandwidth and the processing fees, and fulfillment...that's well worth the 30% Apple is taking for iPhone apps.

There would be plenty of headaches for Apple and developers, of course. Hardware compatibility alone would be orders of magnitude more complicated for the Mac platform with its many thousands of combinations of hardware, display size, resolution, memory capacity, and hard drive capacity, not to mention processor speeds...

Compare that to the iPhone which currently exists in three models with some five or six memory configurations that don't really matter to developers yet. All of them have the same resolution, and they all have roughly similar attributes.

These are all things Apple would have to be concerned with if the company takes this path, and in comparison, managing iPhone apps is much simpler than managing a Mac App Store, but I think it will come.

Other changes during the next year will be more incremental in nature. With so many apps, for instance, it's becoming harder for developers to get their iPhone apps noticed. As the market continues to grow and mature, developers are going to have to grow and mature the ways in which they market their apps.

In fact, this is something that I think will be important for future Macworld Expos. I think iPhone developers are going to need places like Macworld Expo to get their products in front of consumers and the press just like Mac developers have known for years.

We're also going to be seeing more iPhone app advertising, both online and on TV and radio. We're likely to see podcasts dedicated to discovering new iPhone apps grow in popularity, which will lead to TV shows, and segments on broader shows, dedicated to the topic.

I can even see new services for iPhone apps that are similar to what Pandora does for music. Rate this app. Those users who like this app also like these apps. Check 'em out...You know, that sort of thing.

There are already many, many times more apps on the App Store than any ten iPhone users could even hope to make a significant dent in, and I am confident the marketplace will soon be testing out any and every way anyone and their brother can think of to make the process of finding cool apps easier.

It's been fairly amazing to watch the App Store over the last year. Each time Apple announcement some new milestone, it's just shy of jaw-dropping. The next year or two, however, will likely be even more intersting.

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Comments

Lee Dronick

I too would like to see OSX apps available through the iTunes Store, both Apple and 3rd party apps, as long as I could use my pre-paid cards for the purchase. In particular it would be handy for those $20 and shareware apps.

I do think we need a better way to browse the App Store, more subcategories so that we don’t have to scroll through numerous pages. This should help with searching queries as well.

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