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The Status Quo for Mobile Application Distribution

Mobile application storefronts had collectively distributed a cumulative total of 81 billion smartphone and media tablet apps -- as of the end of September 2012 -- according to the latest market study from ABI Research.

Of these apps that were distributed, 89 percent were downloaded from native storefronts that come with the mobile device's operating system (OS).

"The current status quo is based on storefronts that the operating system vendors provide as part of the OS experience, and there is no evidence that this would change in the future," said Aapo Markkanen, senior analyst at ABI Research.

A year ago this wasn't the scenario. For example, some mobile operators could find a viable business case in the curation of Android apps, but that opportunity quickly evaporated once Google executed on its own storefront strategy.

As I've stated before, the creation and expansion of an independent software application developer ecosystem is a significant strategic asset. Few service providers demonstrated they were capable of achieving this goal -- NTT Docomo was a pioneer, but few followed their lead.

Today, it makes sense for mobile network providers to distribute apps only under special circumstances -- such as the ones that we're now seeing in China.

Similarly, ABI believes that it's unlikely that the universal, catch-all nature of app distribution would start breaking up into smaller niche storefronts. There is a certain demand for specialist stores, but even then the niche players should position themselves as recommendation channels driving traffic to native storefronts and not actual distributors.

Markkanen explains, "Running a user-friendly app distribution channel is expensive. Besides the adequate hosting and billing systems it takes quite a lot of human labor, since successful app discovery requires some form of editorial approach. The opportunity for smaller storefronts built around selected categories is therefore limited."

Practically the only exceptions are B2B apps and the consumer categories that the universal storefronts don't want to be associated with -- most notably the porn industry.

Mikandi is a storefront example that has built a business out of the distribution of such outcast mobile apps and related content.

These findings are from the ABI Research mobile application markets research service, which focuses on the distribution and the economics of mobile apps, providing data-driven insights on areas such as download volumes, revenues and business models -- plus, trends within different applications categories.

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