In November, ABI Research conducted a small survey involving 235 US smartphone users who installed applications on their devices in 2008. Even though the number of respondents is small, the results were surprisingly solid for the mobile software market: 16.5% spent between $100 and $499 on mobile apps during the year!
According to ABI’s senior analyst Jeff Orr, Apple AppStore is seen by some as hurting the market with the low-cost apps in its catalog. “It drives the price of content down to $1-2, using a model similar to its successful iTunes music store. If you exclude Apple from the mix, applications for other platforms cost about $7-25 each,” he added.
ABI also noted that many developers are lacking the resources to author applications for multiple smartphone platforms, hence they need to focus on one. That means they have a “margin vs. volume” quandary: sell many copies for the iPhone at a very low price of which the developer receives 70%, or sell fewer via one of the other application storefronts, but charge a higher price and earn more per transaction.
On the other hand, Orr said that Apple did a lot for the overall mobile software market with its massive marketing effort, creating “halo” effect for the rest of the industry. “In 2009 a number of new mobile application storefronts will be launched from Nokia, Palm, RIM and Samsung,” he concluded.
More information about ABI’s report titled “Mobile Application Storefronts” is available from here.