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It's an 'app store' world for smartphones

“App stores," where phone users can download programs onto their phones "are quickly becoming an expected part of the smartphone experience,” says one expert in the wake of Research In Motion's announcement it will have an application storefront for its BlackBerry smartphones.
Image: Apple's App Store
Apple's App Store has made it easy for iPhone users to download programs directly onto their phones. Research In Motion plans to do the same most of its BlackBerry smartphones next March.Apple

Apple, with its one-stop App Store for the iPhone, made downloading programs like games and utilities for the device easy by using the phone itself. Google is doing the same thing with the new Android Market for Android phones, and next March, Research In Motion will start its own application store for BlackBerrys.

Is this how we’ll get all our phone software in the future? Experts say it is, especially for those who have smartphones with Web, e-mail and other computer-like programs on them.

“App stores are quickly becoming an expected part of the smartphone experience,” said Kevin Burden, mobile devices research director for ABI Research.

“The early applications on smartphones were just the core Personal Information Management programs — calendar, contacts, tasks and notes,” he said. “But with the increases in on-board processing power, storage and high-speed data connections, users expect more flexibility in the ways that they can customize their smartphones through applications.”

Apple’s App Store, launched in July, has been a huge success, with more than 200 million downloads as of last week. The store, part of the iTunes Store for music, TV and movies, so far has more than 6,000 programs, both free and paid.

All an iPhone user has to do is touch the App Store icon on the phone’s screen to get to the store to view and buy the programs that are available.

The company wasn’t the first to distribute phone software this way, but it “was the first to control the process from beginning to end, with a single fee ($99) for application developers and a rich browsing experience on the phone,” said Avi Greengart, Current Analysis’ research director for mobile devices.

Palm led the way
Palm, which makes the Centro and Treo smartphones, has had a longer history of selling device software directly to customers, something it began doing in the 1990s with its personal digital assistants.

PDA software could and can be purchased directly by computer download from the company’s Web site, as well as from other sites by software makers.

Image: Screenshot from Google Android prototype
This prototype from Google's Android operating system for mobile phones shows some of the free programs downloaded onto the phone using the Android Market.

“For awhile there was a packaged Palm software section in many electronics retailers,” said Greengart. “Remember — the Palm Pilot came of age right around the same time as the first Internet browsers, and well before ubiquitous broadband” Internet service, especially on phones.

Palm’s Treo was one of the earliest smartphones to become popular in the United States. The company sells software for it and Centros through its online Palm Store, and programs can be purchased via computer or by using the mobile Web on the phone.

“Palm once had a thriving application scene for its PDA line, and there are still more applications for that platform than any other,” said Greengart.

Leslie Letts, Palm spokeswoman, said there are “tens of thousands” of software programs for Palm-based devices.

Improvements to the way Palm’s software is delivered may be in the works, as the company gets ready to launch a new version of its operating system next year.

Palm’s devices had 10.8 percent of the smartphone market in the United States in the second quarter, behind RIM and Apple, according to IDC Research.

Software developers “understand and appreciate our loyal customer base, and are eager to work with Palm,” said Letts.

Microsoft, others may jump in
Other companies also have a foot in the App Store door. Microsoft is working on “SkyMarket” for Windows Mobile 7, the next version of its operating system for cell phones. (Msnbc.com is a joint venture of Microsoft and NBC Universal.)

Nokia, the world’s largest maker of cell phones, has started a “Comes with Music” download service in Britain for its devices, which some consider as a challenger to Apple’s dominant iTunes.

Nokia is in the process of buying the Symbian operating system it uses for its phones. The company plans to set up a not-for-profit Symbian Foundation, which could encourage phone software development, and ultimately lead to an app store.

Nokia already has “a ‘download’ area on its Symbian S60 phones” for phone applications, said Greengart.

The LiMo Foundation is yet another app store contender with LiMo, a Linux-based open source operating system for phones. There are now more than 20 handsets using LiMo, whose backers include LG Electronics, Motorola, Panasonic, Samsung and NEC.

Enough customers, software developers?
Is there room — and enough customers — for everyone to hang out a mobile store shingle? Even if there is, finding enough software developers willing to invest time, energy and money may be a different matter.

With heavyweight RIM having an app store, along with Apple and Google’s, “developers will be in short supply and may not be able to cover all three platforms,” said Rob Enderle, president of The Enderle Group, a consulting firm that studies technology trends.

“When you add Symbian and LiMo both going down likely similar paths, we have too many people who want (software) developers, but not enough commonality between platforms for good groupings.”

“This suggests that some consolidation is very likely in this group shortly.”

Meanwhile, the smartphone market continues to increase, with growth rates around 40 percent “year-over-year, while the rest of the (wireless) industry is growing at roughly 10 percent,” IDC Research said in report last summer.

And being able to personalize devices with software programs, as well as phone features, is becoming more important to consumers, according to Mformation Technologies, Inc., which recently analyzed survey findings of 4,000 mobile users in the United States and Britain.

“Consumers want to use more applications and services, but these need to be tailored to the needs of each user,” said Matthew Bancroft, vice president of Mformation in a statement. “They want a more personalized experience.”

The firm said that 94 percent of consumers already personalize their phones with ringtones or accessories, but 89 percent would “like a higher level of personalization through the ability to pick and mix applications, services and other characteristics of the handset, such as form factors and designs.”

Application stores certainly provide that opportunity for programs. Apple’s App Store has several different categories of programs, from navigation to take advantage of the phone’s GPS radio, to games, entertainment, business and productivity software.

RIM's approach
With Apple trying to woo corporate users to the iPhone, and Research In Motion trying to lure more consumers to the mainly business-oriented BlackBerry, RIM’s addition of an “application storefront,” announced last week, “helps nullify one of the selling points of its competition,” said Burden of ABI Research.

“It’s unlikely that Blackberry users that value its business e-mail capabilities would move to an iPhone or Android phone because of their app stores, but they certainly might have coveted the growing number of applications available for those devices had RIM not announced its own app store,” he said.

RIM says software developers will retain 80 percent of the revenue from sales, compared to 70 percent that Apple and Google gives developers.

RIM’s app store customers will use PayPal on their phones to pay for programs, the company says. Apple uses its iTunes Store for billing, with customers required to set up an account before they start using the service.

The first Android phone, the G1, carried by T-Mobile, went on sale last week, with only about 50 programs in the Android Market. All programs are being offered for free right now.

Many more programs are expected, and starting this week, software developers will be able to register for $25 to start creating programs for the market.