The Apple App Store appears to have got off to an incredible start. In a few months there are several thousand applications available both free and for a minimal price, and consumers have responded. In its first month alone, it generated around 60 million downloads and $30 million in revenue for Apple. Those are incredible numbers when you realize that 90% of the Apps are under $10, and on the applications side there have already been several that have had million+ downloads. It is clearly a game changer and is going to redefine the nature of not just software distribution, but also software development.
I however think the model is so much more than that; and that is where the concept of a Trojan horse comes to play.
Over the coming months and years the variety, creativity and use of available applications is only going to grow. And copycats are coming, a validation of the model and a sure sign of success. Both RIM and Android have mentioned creating similar models to distribute their software. There have also been some detractors, who have argued that the App Store is a walled garden and that with Apple controlling everything, inevitably they will limit the freedom and creativity of developers and deny consumers true freedom of choice. They argue that the walls should be taken down or at the very least lowered, so no more than a small fence.
They may have a point or two on their side. However, with the platform only a few months old, I am sure it will evolve and become more flexible as the volume of applications continues to grow. Now back to my point of the Trojan horse, I actually think the App Store is something way more powerful than a software distribution tool - even calling it a walled garden is a bit of a misnomer - its not exactly a garden - its more like the grounds of some massive stately home (or ranch, but I'm a Brit and stately home sounds better anyhow). More importantly I would argue that rather than a walled garden it is more of a Trojan horse, i.e. a subtle plot to take control of an even bigger garden.
Think about it....
Overnight Apple created a vibrant development community, created a more-or-less accepted and easy to administer small payments model for developers and customers alike, along with a vibrant community of commenter's and reviewers. All good stuff.
However, I think this is just the beginning.
Take the above model and apply it to the other areas that Apple is using iTunes to gain market share/dominance. What about music, what about film? Think of an App Store for musicians, what if any musician or band could take advantage of the same distribution model and post their music on iTunes. You get great distribution, a known and fair revenue model and a great democratic way to find new music and easily get it onto your iPods / iPhones / Computers / home entertainment systems. Yes, I know that MySpace already is very music focused and that it is possible for independent musicians to get onto iTunes. However, what I am theorizing is a slightly different model. Using the App Store / iTunes model, you would create a disintermediating and democratizing force for musicians and consumers alike. Would it work? Well, I think there are way more bands and musicians out there struggling to get heard than there are iPhone developers!
Now take the model again and apply it to a beefed up Apple TV - this time with a focus on casual gaming - the possibilities go on. As with music, yes there are a number of other ways to download independently created games for PS3's etc. but in most cases the user experience is poor and you need to be in the know or a semi hacker to get stuff to work well - and the game is stuck in one place - on your console.
The beauty of Apple and to paraphrase their marketing (apologies for that) - it just works. They have created a seamless, engaging and enjoyable user experience that is easy to grasp and works better than any thing else across multiple entertainment platforms - computer, TV, Phone etc. And it works for everyone - you don't need to be some wizard of hacking, network configuration, formats etc - it is simplicity, consistency and engagement with a sense of style and brand cachet for the masses.
What Apple really has done is to create a workable, enjoyable and simple cross device digital distribution model. It is a win-win-win model: For the consumer, for the producer of content and of course for Apple.
Who knows if Apple will do any of this, the thought is intriguing though.
Baron Conway
Strategists & Planners