Is the App store the only model for online business?

23rd
JAN

Is the App store the only model for online business?

Posted by Michael under Online Retail

Econsultancy is taking issue with an article by Farhad Manjoo in Fast Company magazine, which claims that the app store model may soon hit a “dead end”.

Manjoo’s argument is that developers don’t need Apple – or, as he puts it ‘in the age of the Web, developers can get their programs to end users without anyone intervening’ and econsultancy considers this to be ‘a notion that’s as dangerous as it is naïve’.

So what’s the truth? Econsultancy says that the Apple App store is like a digital Wal-Mart and like that company, it has created a one-stop venue for people browsing for digital entertainment and content. Just as Wal-Mart has high standards and rejects many would-be suppliers, so does Apple, and in the same way, these standards allow customers to shop with confidence, in both stores, the customer is safe, well-served and going to be happy with their purchase.

That makes perfect sense – but there are other models to consider. In the bookselling world, Amazon has sent hundreds, if not thousands, of bookshops to the wall – but Waterstone’s has succeeded in making a high street book shop business work in the face of the online competition by focusing on a different kind of client and offering a different kind of service – at Waterstone’s the staff have direct input to the books they sell, provide their own reviews of material, and make recommendations to customers about what they might like. For those who like to browse the books, getting a physical impression of them, or take a possible purchase to the coffee shop so they can flick through it over a cappuccino, the Waterstone’s model works better than the Amazon one. And they’ve parlayed it into a substantial online business too.

So what does this mean for online sales and apps? Is there scope for a more bespoke service where some kind of online ‘adviser’ walks purchasers through what’s available and offers personal advice on which app might be best, based on what they already use?

Possibly, but it’s not clear what the business model would be that supports this kind of personalisation. One clue might come in the wide number of apps that aren’t English-language based: there does seem to be some scope in the Farsi/Chinese/Francophone marketplaces to try something different to the App store. Alternatively, there are niche markets – culturally or physically, that might be developed into a different customer base.

Econsultancy points out that ‘Developers can act like prima donnas and complain about how hard it is to get shelf space and how Apple doesn’t give them the treatment they feel they deserve, but the numbers don’t lie: Apple delivers buyers. And without those buyers, there’s nothing for the suppliers (developers) to supply.’ This is true, but only true as long as your requirements as a buyer fit the App store model.

There is scope for developers to explore the possibility of using the open web model to build a different customer experience for those who are already outside the App store customer parameter. But this means that developers have to give up thinking only about product and start thinking about customer too, which they are notoriously uncomfortable in doing – while they clearly give thought to what a customer wants from an app, there’s little evidence that the thousands of developers out there think much about what a customer wants when purchasing an app, and unless some aggregate of developers sits down to build a Threadless style community shop, the App store will remain the Wal-Mart of applications.