Ever since the $1.9 billion purchase of 91.com in July by Baidu, many people who hadn’t paid much attention to app stores outside of iTunes and Google Play have all of a sudden taken notice. Since the health of the alternate app store ecosystem is an area near and dear to us, we felt it to be a good time to speak to and where we see things heading in the future. Why are these stores important to developers? What role do they play? How should publishers position themselves for the future with alternate stores?
First, many people ask why these alternate stores even exist. We often hear “why would anyone use anything other than iTunes or Google Play?” Depending on who you ask iTunes and Google Play account for 70-85% of the non-Chinese app download market. Furthermore, with no Google Play store in China, the largest consumer market in the world is dominated by alternate Android app stores. So we believe the right question for a developer to ask is “Do you want access to the other 15-30% of the market that the big 2 don’t own?”
Alternate stores exist for a number of different reasons. Some, like carrier and OEM stores, are legacy stores from the pre-iPhone days. Others like Amazon Appstore are innovating and taking advantage of key competencies that they have over incumbent stores. Yandex and Baidu’s stores are strategically positioned to help their parent companies compete against Google. Still others are social networks where users share and comment on apps. The reasons for being are quite varied but what they all share is a desire for great content to offer their users.
This week Google announced that they would no longer allow 3rd party in-app payment processors in the Play store for the majority of digital goods purchased through apps in the store. We believe that this change, along with new in-app commerce technology enabling multiple payment providers to be included in a single billing SDK like that being offered by Lotaris, have the potential to fundamentally shift the landscape for alternate app stores. The Google Play changes will force payment providers who either depend on mobile or want to get into mobile to find new outlets for their developers’ apps to be distributed and they’re likely to invest heavily for that business. Secondly, if Lotaris is successful or Yandex with their open source in-app billing initiative is successful, then it will open up new revenue streams for many app stores. Most stores make money by selling feature placement. In-app billing is a potentially more profitable revenue stream and would likely lead to new innovations, more customer acquisition efforts and more stores opening up. This is good for stores, good for publishers and will ultimately be good for consumers.Share this article on