Friday, October 22, 2010

Apps Do Matter

Now that we've reached a critical mass in the smartphone market, the next big growth area are the Apps.  When you include all the iPad users in the mix, the opportunity for App sales is clearly bright.  In fact, one-third of iPad users still haven't downloaded an App according to a study by Neilsen.  Consider also, the Apple announcement this week of putting the App store on the Apple Mac desktop -  and now you have something quite interesting.

Apple has increased its presence by being available on several consumer devices unlike the Android platform which is confined to smartphones (at present anyway), or Microsoft, which is trying to get a piece of the mobile space having missed the smartphone market completely.  But it's not all about the smartphone or the hardware. Competitors have to figure out how to catch up with 300,000 Apps (and growing daily). Where are the Apps for the Microsoft mobile platform other than Office?  Developers have shifted focus to the Apple environment and since it costs so little to develop an iPhone App, compared to desktop software, a whole industry has quietly emerged of small independent developers who don't need millions of dollars in VC money anymore.  And imagine all this has happened in a terrible economy.

According to a recent Nielsen study, the 63 percent of iPad users that did download an App, actually paid for it.

The desktop has always had software, but at a premium price.  Microsoft owned that business model, setting the price of the desktop software to almost the price of the hardware (by these days standards).  With Apple now such a dominant player in the tech market, even that traditional business model is about to be decimated.  We don't need to be forced into buying expensive software on a disk anymore.

The App store will allow consumers more choice within a cohesive platform and at significantly lower prices than traditional desktop software. All of Apple's products, from the iPhone, iPod, iPad and even the new Macbook Air will all take advantage of mobile consumers who are also business users.  And we are only at the beginning of this revolution!


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