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Mobile Applications Stores: A Virtual 'Farmer's Market'

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The mobile content market with the advent of the applications store has brought a new model of mobile content distribution. The applications store gives an opportunity to capitalize on direct relationships with consumers, linking them to the brand and offering an easy to use way of purchasing a variety of applications. It is like on a farmer's market, where people can purchase fresh products and homemade food eliminating the middleman and the additional costs associated with buying through an intermediary.

Saverio Romeo, Frost & Sullivan Industry Analyst, says that "the success of the iPhone Applications Store and the launch of the Android Market for the first Android-based device, G1, gave rise to the phenomenon of applications stores in 2008." However, the idea of the applications store is not a new one. Qualcomm may have been the first to put the idea of an applications store into action by opening its Binary Runtime Environment for Wireless (BREW) to software developers and allowing users of BREW devices to download applications directly to their phones. This was not a "farmers' market" in the full sense. Qualcomm was the intermediary of an exchange between an elite group of users, BREW devices consumers, and software developers who needed to fulfil specific requirements to be part of the BREW catalogue.

The launch of the iPhone Applications Store was a huge success with 200 million downloads in only the first 100 days of operations. Behind this success there is certainly a very well known brand, but also a model of content distribution that interacts directly with the final user as it happens in a "farmer's market". This has been possible also because mobile users are becoming increasingly aware of their ability to personalize their mobile experiences. This consideration and the success of the iPhone Applications Store have driven the launch or announcement to launch many other applications stores within the market, including the Samsung Mobile Store, Nokia Ovi Store, O2 Litmus and the Blackberry Application Storefront.

Applications stores provide a great number of business opportunities. Mobile network operators and mobile device manufacturers that have direct relationships with users will be able to capitalize these relationships, linking customers to the brand and offering an easy-to-use way of purchasing a variety of applications. Mobile social networking companies can also play the card of the applications store because they have communities of users. Opportunities for content providers lie in developing applications and being able to sell them on different stores for different platforms and devices. There are also business opportunities for service and technology providers in the areas of billing, distribution and retailing, storefronts, advertising, and marketing; all elements necessary for a successful store.

"The advent of the mobile applications stores has brought a new model of mobile content distribution. There are opportunities for different players of the value chain," adds Saverio Romeo. "The competition between stores will mainly lie on the quality of the catalogue, on the level of interactivity with the users and on affordable pricing models. In the latter issue, the role of advertising can be crucial. The adventure has just started."

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