Apple Apps' Incredible Success Has Many Marketing Implications

The Apple (AAPL) App Store is the biggest thing to ever happen to the video game industry, so it is amazing when you realize that it is less than 15 months old. And that Apple never expected to make a profit from it, they just did it as a service.

According to Apple’s figures, there have (as of September 28th) been 2,000,000,000 apps downloaded, and they are now hosting 85,000 separate apps. There are more than 50 million iPhones and iPod Touches in the world. And there are 125,000 developers signed up to make apps for them. Amazing figures. It is little wonder that Apple is rumored to be working on a home console to take on Nintendo (NTDOY.PK), Sony (SNE) and Microsoft (MSFT).

16,537 of those apps are games, a staggering number, which must surely mean that in the last year the iPhone has attracted more new games than all other platforms combined. This is an explosion in creativity like the industry has never seen before, but also a massive marketing problem for the publishers of these games.

So what does this all mean?

• High street retail of plastic and cardboard video games is doomed. We already knew that; what the App Store has done is to bring the demise a lot sooner as the whole industry moves over to the app store model for content delivery.
• Horrendous product differentiation problems for developers. How do you make your game stand out from the 16+ thousand others?
• Globalization now comes easy for developers. Apple publishes to the whole world. There's no need to ship physical stock anywhere. This makes a tremendous difference.
• Apple TV is one of Apple’s lesser products, however it is a very obvious basis for a much more powerful home entertainment hub that would include video gaming. Apple must be doing this.
• The immense number of apps gives Android a very difficult moving target to catch up with, and an almost impossible target for Zune to attack.
• Apple is opening up iPhone availability to more and more air time providers, so availability (and thus sales) are going to shoot up.

This is amazing stuff and I look forward to the chapters unfolding in an ongoing tale.

Comments

[iJah420:]

Yes INDEED!

My buddy bought in @ $42. He is a happy camper.
In addition the naysayers have FINALLY been silenced.

iJah420 is also a happy camper. Good Luck Ballmer

Oct 01 08:39 AM

[Jon408:]

My wife insisted (over my doubts) that we buy Apple when the iPOD was introduced; she thought it was going to be a big deal. I liked Apple products, but hated the stock, seeing the company as unnoticed and unloved. So we got in at under $10 (pre split), and I then proceeded to add to that holding whenever I could. Amazing run, and it's only just in the middle... Long term buy and hold is the ticket. I've never sold a single share, not even to swing trade.

Oct 01 09:53 AM

[lovethelang...:]

Not that the competitors aren't still way behind, but they don't have to have 85K apps. A lot of the apps are either redundant or junk. Having *good* games and a solid group of the "utility" apps would get them a long way.

Long AAPL but let's be real ...

Oct 01 10:07 AM

[otlguy:]

The comment that the majority of apps are junk, though true, is tired. Mac fans were using it when PC users would spew the fact that Windows has more apps available.
Fact is the App store has quite a few useful if not fantastic apps in all areas. The crappy ones certainly do not detract me from buying the ones built with quality... What the mention by Apple that it has 85,000 apps does, in this extremely fragmented market is cement that they have a nice jump on the competition, and that along with a great devkit brings quality developers to the platform.

Oct 01 11:01 AM

[iJah420:]

AAPL can NOT control the slock crap code and lack of UI experience of the schlep developer(s)........ even though they possess the best SDK on the planet have asses programs will be submitted. What AAPL CAN control, is the approval of APPS. That being said, it is inevitable that some crap ware will get through.....fact remains as otlguy points out....Apple has a massive head start in a very fragmented sector. Apple is the envy of the tech world.

Lets do a list of how Apple has effected so many other companies in so many diverse sectors. ie. music, games, computers etc.

Nokia
RIIMM
MSFT
Verizon
T-Mobile
Sony
Motorola
EMI
Dell
Universal etc. etc...

I say NO OTHER COMPANY ON THE PLANET has had such an impact.......and to add insult to injury Apple ain't done yet people.

Have a Grateful day!!! AAPL long.

Oct 01 12:01 PM

[AdamC:]

Isn't it strange when Apple rejected the craps of farts, the whole tech community was up in arms bad mouthing Apple for rejecting them and now these craps are being billed as craps in the App Store and giving it a bad name.

Frankly I wonder who are to blame for these craps, the buyers, tech bloggers criticizing Apple on the approval process or the hoping to get rich developers, etc..

Oct 01 12:23 PM

[brewer:]

All software should be distributed this way. When will Apple make an app store for their Macs?

Oct 01 12:40 PM

[Synthmeister:]

Apple was the first company to put all the pieces together for a complete online development/deployment... system that was cheap, easy and worth doing because of the installed user base. Developers don't have to worry about packaging, shipping, web-commerce, credit cards, bandwidth, sharing revenue with middlemen or DRM. Apple handles it all.
Yes, wading through 85K apps is daunting, but imagine how bad it would be if those 85K apps were spread across 6 different websites.

Oct 01 12:54 PM

[Constable Odo:]

I'd like to know how these people that claim most of the apps in the App Store are crap are determining this figure. What is the most amount of paid apps that someone who is making this claim have downloaded to their iPhones/Touches? 500? 1,000? Unless someone has downloaded over half the apps that are available, they're just talking out of their asses. I don't think that even 148apps.com has been able to determine the ratio of good apps to bad apps and they seem to be on top of App Store proceedings. Apps and games are only going to get better over time.

There is a claim that PSP and DS games are better than ones for the iPhone/Touch, but even if that is true, both of those gaming platforms have been in existence far longer than the Apple iPhone/Touch platform. So I think that the iPhone/Touch platform will undoubtedly produce some very good apps over a period of a few years. People wanted less expensive games and now that the App Store has low-priced games, people are crying about the quality not being up to $30 games. Just go out and buy all three platform devices and then you will all be satisfied.

All developers are getting a chance to try their hand at games and apps, but now it seems people are complaining that the quality of the games are low and yet if Apple were to start vetting developers, there would be another uproar that Apple was being unfair to new developers. I'm glad Apple doesn't have to listen to the bitchers and whiners and will just continue to do what they need to do to pull away from the rest of the mobile platforms.

Oct 01 01:48 PM

[Jon T:]

Those crap apps were the training ground for developers experimenting with a new platform.

They liked what they saw and the rest is history.

MSFT went up more than 30,000% over 12 years with it's run at the PC market.

AAPL is about to do something similar, because no-one has the combination of an OSX, and a team like the one in Cupertino.

Oct 02 09:19 AM

[bobthenoob:]

<i>"brewer:
All software should be distributed this way. When will Apple make an app store for their Macs?"</i>

Thanks to highly efficient SDK, most iPhone/Touch apps are less than 1 mb in size so downloading takes only a few seconds. It would be nice to have a central place to look up computer apps though Adobe CS4 Design Premium came with 2 install DVDs, that would probably take several days to download.

Oct 02 10:09 AM

[mollytjm:]

i'm with brewer..i'd love all the apps to be for the mac also. as to 'junk apps'... first of all, you can search...they already have best lists, featured lists, top paid, top free... and ALL have very good reviews so it's easy to pick and choose if you're looking for a certain category (there's that choice too). Sometimes an app seems like it isn't too great, but then the developer gets encourage by downloads and makes it a good app. it doesn't matter though..even with some apps being less than perfect, there are THOUSANDS that are wonderful. i keep downloading and enjoying.
long APPL

Oct 02 10:33 AM

[Tom B:]

Something to think about: 12% of US households now have at least one Mac. 88% left to go, plus the global markets. Enterprise is still deciding whether to keep Vista or side-grade to Win7. When all the IT fossils who grew up in the DOS years retire, it will be the end of the Enterprise/Windows co-enabler pathology.


On Oct 02 09:19 AM Jon T wrote:

>
> Those crap apps were the training ground for developers experimenting
> with a new platform.
>
> They liked what they saw and the rest is history.
>
> MSFT went up more than 30,000% over 12 years with it's run at the
> PC market.
>
> AAPL is about to do something similar, because no-one has the combination
> of an OSX, and a team like the one in Cupertino.

Oct 08 12:01 AM