Apple App Store marketshare up, but pressure on prices

Peter Dinham
Sunday, 24 May 2009 15:04

IT Industry - Market

The Apple App Store grabbed a 12% share of the mobile applications market in 2008, according to Strategy Analytics, although the value of that marketshare was lower due to intense application price competition between developers.

The research firm claims that the Apple App Store’s “favourable revenue share for developers has created a tremendous buzz and fostered innovation,” and, it maintains, "has excited consumers, inspiring an unprecedented volume of downloaded applications."

According to David MacQueen, author of the report - “How Apple Changed the Market for Mobile Applications” -  the downside to this popularity is that “with so many developers rushing on board, competition has become fierce and the majority of applications are downloaded for free, or at a very low cost.”

Endorsing MacQueen’s report, Strategy Analytics’ VP, David Kerr, says that other handset manufacturers have reacted to Apple’s success by launching their own stores, although in the past it has been the carriers which dominated application distribution.

“Carriers are now changing tactics, hoping to re-attract developers—leading to a rapidly changing environment where each company category has its own strengths and weaknesses.”

“Apple’s (stores) has won the initial skirmishes but the war is far from over,” Kerr concludes.