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App Store Business Will Grow

Research firm says the challenge will be differentiation and ROI

More than 6.6 billion apps will be downloaded via smartphones in the year 2014.

That’s the prediction of research and consulting firm Frost & Sullivan.

“For some time, mobile operators have been offering a branded ‘catalog’ of mobile content and services that could be purchased from the handset itself,” the company noted.

“However, all that is changing for smartphones, in which newer types of targeted app stores are being introduced to enable the device owner to purchase content from outside the operator environment. The availability of a large number of inexpensive or free mobile applications that leverage the next-generation technical capabilities of the target device will help drive adoption. However, in the end, service differentiation and generating suitable return on investment from the app store business could be challenging.”

The company is out with a report called “An Insight into the U.S. Smartphone Application Storefront Market.” That covers prepaid and postpaid mobile, SMS and MMS, mobile Internet, iPhone, Android, Windows Mobile, Palm and Symbian.

It notes that “next-gen” devices are coming out rapidly and that companies are offering app stores to drive downloads of content in multiple categories. Apple, Google, Nokia, Palm, and Microsoft are among those offering or planning app stores. Most apps are free to the user.

“These applications leverage advanced device capabilities such as touch screen, accelerometers, full Web browsing and location-based services, among others, to deliver a truly compelling proposition.” The challenge for providers, the company says, is to ensure service differentiation and optimal management of the scale of the business.