Will Amazon Android Appstore contribute to market fragmentation?

Retail IT directors may soon be able to market mobile applications cross-platform. When Amazon launches its Android Appstore, it could change the way enterprises buy software and the way retailers market mobile applications.

Retail IT directors may soon be able to market mobile applications cross-platform. When Amazon launches its Android Appstore, it could change the way enterprises buy software and the way retailers market mobile applications.

Gartner predicts revenue generated by applications downloads from app stores, either through direct spending by end-users or advertising revenue, will grow 1,000% between 2010 and 2014. As Amazon readies to rival Google and emulate Apple's success, the need to differentiate from its competitors could drive it towards a business-focused, cross-platform app store.

But how will it create new opportunities for cross-platform applications and enterprise app stores?

Google, Apple, Blackberry, Nokia and Microsoft all have application stores for mobile apps running on smartphone devices. For Google's Android operating system (OS), a host of third-party app stores have sprung up from the likes of Vodafone in Europe and most recently, Amazon, which analysts have warned will cause fragmentation in the app store market.

Roberta Cozza, principal analyst at Gartner, warns the market may fragment if Amazon's apps are not available through Google's Android Market too.

"Android users are not aware of what they're missing at the moment if they don't have the latest version of Android, which is why fragmentation has not had an impact on sales yet. But as users become more knowledgeable about applications, they will realise what they're missing and it will become more of an issue going forward. Developers have to have in mind that applications developed for the latest OS version may not run on older versions," warns Roberta Cozza.

App store operators taking on Apple

Windsor Holden, principal analyst at Juniper Research warned that some operators launching app stores are "brushing up what they already offer in portals and calling it an app store".

"Operators are not renowned for being the best sellers of content. If you look at Amazon, they are a specialist in retailing content and achieving sales. We've got someone who is far more likely to succeed as it's their core business," he adds.

Holden believes Amazon's Appstore could fuel competition. "Google is like another supermarket on the block. Competition is good. Maybe they'll be some migration of traffic from Google. Or it could spur Google on," he says.

But ultimately, the market will continue to fragment until open standards allow apps to be offered across a variety of handsets. But, "getting operators to agree is like herding cats," adds Holden.

Vodafone, China Mobile and Sprint formed an alliance called The Wholesale Applications Community early last year to offer a single, open platform that delivers applications to all mobile phone users.

Fragmentation is a more complex issue for businesses. "For enterprise applications, it's often not the case of merely going to an app store, it's about getting a relationship with an app platform provider or solutions provider because of data security. There are a number of handsets aimed at pro-sumers [professional users], talking about enterprise apps running on personal handsets. But they have a lot of issues," he says.

But app stores aimed at enterprise users may become more prevalent. Adrian Bridgwater says on Computer Weekly's CWDN blog, Apple's new Mac App Store targets businesses. "Apple is arguably much more interested in seeing what it can achieve in the enterprise space and the mobile enterprise space at that," says Bridgwater.

Enterprise app stores are in the pipeline. "One new idea that's been thrown around quite a bit lately (both in person and virtually) is applying the "app-store" concept, familiar to people with smartphones, to the world of enterprise applications," says Dennis Gaughan, analyst at Gartner in a blog post.

Gaughan says the idea "has legs" but issues surrounding deployment, app integration and interoperability must be addressed first. Increased fragmentation may prevent enterprise application stores from taking off. "The first hurdle is to try to replicate the app-store usability in a heterogeneous environment without breaking the bank on development and integration costs. It would also require a level of co-operation between vendors that, to say the least, has been difficult to achieve."

The more app stores that open, the more opportunity emerges for app stores to be able to focus on a particular market, such as the enterprise.

When Amazon launches its Android Appstore, it could makes its application store open to other platforms. While Amazon hasn't indicated specific plans, it wouldn't be a huge step to build and sell applications for other operating systems to create the first cross-platform app store. And it wouldn't be a giant leap for enterprises already using Amazon's cloud and web services to develop applications using Amazon Web services, host and then on the Amazon Elastic Cloud Computing platform (EC2) and distribute them through an Amazon app store all via the Amazon infrastructure

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