Name an internet-connected device, and as the Apple commercial would say, there’s an App store for it.
Nokia, Research in Motion’s BlackBerry, Palm, Microsoft, and the surging number of gadgets running Google’s Android operating system all provide access to online retail centres where people can browse programs to buy and install on their phones.
Apple’s success with the iPhone and the 100,000 applications that now run on it has helped it reached a market value equal to Google’s. Some of its competitors’ attempts to mimic Apple’s achievement can appear unimpressive by contrast.
Yet Android, in spite of appearing only a little more than a year ago, now offers 20,000 apps, double the number available just five months ago. The sheer number of apps now on offer means the contest between phone platforms is now focused on quality, not quantity.
More fundamentally, the apps boom on Android shows that the historic technology shift now under way will have more than one winner. Even those who have tied their fortunes to the iPhone, such as program developers, say that the surging “app economy” is much bigger than one family of products offered by one company.
Gus Tai of Trinity Ventures, a venture capital firm which has significant investments in companies making iPhone apps, says: “Android is definitely going to be a force to be reckoned with”.
Now other hand-held devices can connect to the internet in a usable way, the iPhone is losing some of its competitive advantage. In addition, developers point out that it is not difficult to tweak a program made for the iPhone to run well on another gadget.
David Yoffie, a Harvard Business School professor says: “Most previous application environments had fairly significant switching costs”.
“From Apple to Unix or Windows, it was very costly for a firm to make the move. But the cost for moving an app from Apple to Android is $5,000 or less for a typical company. It’s actually very inexpensive.”
Prof Yoffie says that he expects several smartphone platforms to survive, with the top apps available on each.While Apple has the lead in sheer number of applications and in unit sales of the most high-functioning phones, it will be a serious challenge to retain it in the long term.
Gartner technology consultancy predicted in October that Android phones, now supported by the four US wireless carriers with the greatest number of customers, would overtake Apple in unit sales by 2012 and rank second in smartphone share only to Nokia.
The significant factors in Android’s favour are the system’s support from web behemoth Google and the fact that it is open-source, so that anyone can modify it for distribution.
That said, the app market on Android has had some hiccups. For now, sales can be made only through Google Checkout, a virtual payment platform that has not been as widely adopted as rivals such as PayPal and is not available in all countries. Developers complain that consumers have a hard time finding out about their wares.
Programmers have another worry, which is that Android runs on a range of hardware. They can tailor a game to work best on one sort of Android phone, but it will function differently when it is used on another sort of phone or even on an Android laptop.
However, the number of apps installed per Android handset owner is rising, and there are other signs that the platform is strengthening. Google’s David Conway, senior product manager for Android, says: “Since the beginning of the fourth quarter, if you’re talking about paid apps, we’ve seen a tripling of transaction volume and revenues”.
Most of the best-selling apps on the iPhone and Android phones are games, but business software is also being distributed, and corporate technology departments are agreeing to support more of the devices.
The good news for Android and other iPhone competitors is that so much computing activity is moving towards the “cloud”, where data are stored remotely and can be accessed from phones or computers anywhere. By design, programs that handle such data already work well with multiple devices. That means the iPhone will not be able to control exclusively processing requests to access the programs and data.
Those who have the most money at stake, such as investors and entrepreneurs, are convinced that no single company, nor even one sort of hardware, will dominate the market. They say the big winners in software will be those that prove the most flexible, allowing different experiences from varying devices.
Mr Tai, referring to a series of electronic games based on American football that demands a great deal of processing power, says: “It’s not whether Madden will go on your phone.
“It’s what parts of it could be hived off.”
Lars Buttler, a former head of the online division at Electronic Artsvideogaming company, makes games that reside on the cloud at his company Trion World Network.
He says that players of Trion games would, for example, give simple orders to characters from their BlackBerry while the action takes place on servers elsewhere.
He says: “We refuse to see the console or the PC or the iPod as a platform. It’s an access device.
“The platform is broadband. And that’s everywhere.”
Apple has what many see as the best gadget and for now the broadest array of things to do with those gadgets. But the former is a matter of degree and the latter is more about bragging rights than superior utility. In a world where access to the web is what matters most, Apple cannot expect to rule alone.
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