Competing App Stores Elbowing In on Apple’s Action?
Microsoft is the company often regarded as Apple’s nemesis — certainly judging from Apple’s own ad campaigns. In the mobile world, though, Microsoft has some catching up to do, particularly among consumers. Even with its new app store, it may not pose a huge threat. Nokia, on the other hand …
Much of the news affecting Apple (Nasdaq: AAPL) this week comes not from Cupertino, Calif., but from Barcelona, Spain, where the annual 3GSM Mobile World Congress is being held.
A number of Apple competitors, including Microsoft (Nasdaq: MSFT) and Finnish phone maker Nokia (NYSE: NOK) , announced their intentions to create mobile application marketplaces similar to Apple’s hugely successful iPhone App Store.
Even French wireless operator Orange is getting in on the game. The field of such marketplaces is getting crowded — already, Google (Nasdaq: GOOG) , Research In Motion (Nasdaq: RIMM) and Samsung have made similar announcements.
App Store Hoopla
It’s easy to forget that such marketplaces have been around in one form or another for years.
"Apple gets all of this press for the App Store, but places to go and buy applications, games and productivity applications have existed on carriers’ Web sites for a long time," said Charles Golvin, a wireless telecom analyst at Forrester Research. "Then again, no one did this as well as Apple."
Golvin doesn’t see the launch of new app stores as a threat to Apple. Rather, it shows that Apple’s competitors are validating Apple’s strategy and trying to play catch-up.
If there is a threat to Apple here, it’s mostly one of vying for the attention of mobile application developers, he told MacNewsWorld.
"A lot of the people who develop these apps tend to be smaller shops, and they have limited resources," Golvin said, "so they have to make opportunity cost decisions. It’s not a matter of developers saying, ‘We can make an iPhone app, a BlackBerry app, an Android app,’ and so on."
The Nokia Threat
If there’s one player out there right now with potential to weaken Apple’s position in the mobile market, it’s Nokia.
"[Nokia has] dominant market share around the world," noted Golvin. "If you look at the European market, Nokia is very strong in the high end. They have a lot of developers that have already made Symbian applications. So, if Nokia is successful in converting this developer base, it could have a really rich set of applications out there."
Still, Apple may have one advantage over the rest of the field.
"Apple was able to come and create its own rules and exclusive distribution channel," Golvin said. "There’s no way that Microsoft, Nokia or even [Research In Motion] will be able to create the same monopoly. There will certainly be other stores where you can buy Nokia apps. They have too many existing relationships and dependencies between them and their operator customers."
Speaking of Microsoft …
Like Nokia and Orange, the software giant will launch its own app store, called the “Windows Marketplace for Mobile.” The new app store will be accessible via mobile phones and the Web.
This isn’t exactly an innovation for Microsoft.
"Microsoft has done similar things like this before," said Matt Rosoff, an analyst at Directions on Microsoft, "but this is the first time there is a comprehensive store you can get to from the phone."
Windows Marketplace for Mobile is part of an updated version of the company’s Windows Mobile 6.5 operating system. To date, developers have created more than 20,000 applications for the Windows Mobile platform.
The purpose of the store is to make it easier for users of Windows Mobile smartphones to access and download Windows Mobile applications. However, many of its 20,000 mobile applications are geared toward business customers.
"I think Microsoft needs a more comprehensive entertainment strategy to draw in consumers, so maybe [Windows Marketplace for Mobile] will help," Rosoff told MacNewsWorld.
For now, Apple has the advantage of very good branding and the popularity of the iPod and iPhone business models, where the company controls everything having to do with the hardware and software, he said.
"That makes for a better consumer experience," Rosoff noted.
Apple’s stock was at US$95.35 per share in late-day trading Tuesday, down about 6 percent from where it was on Feb. 10.
"The S&P is down 4 percent, and Apple tends to be a little bit more volatile than the S&P," Tavis McCourt, an equity analyst with Morgan Keegan, told MacNewsWorld.
"The only news event [that might have a bearing on Apple’s shares] is the 3GSM conference. There are a lot of competing app stores being launched, and people may think that competitors may be catching up to Apple on that — but I think that’s over-reading it a little bit."