Posted by & filed under Apple, business models, Ecommerce, Google, industry analysis, iPad, revenue model, smart phones, smartphones.

Description: Apple’s iPhone App Store launched in July 2008. In just over two and a half years, iPhone, iPod Touch, and iPad users have downloaded 10,000,000,000 applications for their iOS devices.

Source: Informationweek.com

Date: Jan 24 , 2011

“With more than … seven billion apps [downloaded] in the last year alone — the App Store has surpassed our wildest dreams,” said Philip Schiller, Apple’s senior vice president of worldwide product marketing in a prepared statement. “The App Store has revolutionized how software is created, distributed, discovered, and sold. While others try to copy the App Store, it continues to offer developers and customers the most innovative experience on the planet.”

Apple says that the App Store has more than 350,000 applications buried inside it, with more than 60,000 dedicated to just the iPad. But what of the App Store’s competitors? Google, Research In Motion, Palm/HP, and Microsoft each run their own app stores for their respective smartphone platforms. Do any of them have even the slightest hope of matching Apple’s achievements?   Read rest of story

Questions for discussion:

  • Google, Research In Motion, Palm/HP, and Microsoft each run their own app stores for their respective smart-phone platforms. Do any of them have even the slightest hope of matching Apple’s achievements?
  • What makes Apple apps different than their competitors?  Is this a sustainable competitive advantage?

22 Responses to “What’s Driving Apple’s 10 Billion App Success?”

  1. Brittni Maurer

    I don’t believe that any of these of similar companies such has Google, Research In Motion, Palm/HP, and Microsoft have any chance of catching up to Apple App store any time soon. I had thought this before reading this article and now after reading it, it has backed up by thoughts. I think that as of right now Apple App stores are so well ahead of any other App store that they don’t have anything to worry about. As I think of all my friends they all own a Ipod, a product by Apple. This shows that Apple has a way higher percentage of the market then any of their competitors. In or for their competitors to catch up they would need the support and money from the market, and I don’t believe that they will be getting the enough support to go forward.
    Apple Apps are different from their competitors from the total different way of going about getting their product out there. Apple has a totally different marketing strategy, which has let them to their success in today’s sales. The competitive advantage that they have right now is sustainable for a couple more years but eventually the other companies will catch on and there for eventually take away the competitive advantage that Apple has right now.

  2. Caley Sinclair

    When looking at cell phones, Googles android system is slowing catching up. Apple has built its company on its ease of use, and Android is also now becoming known for its ease of use. When using a cell phone, I much prefer the android option to an Apple iPhone. With the android you can easily connect to your google accounts and back you info up on the cloud. This gives users who are inclined to Google an easy choice to make. If Google were to introduce a way to access the Android market from your Google account and send any apps downloaded from a source other than your phone to it, they will catch up to Apple faster than people may think. Androids popularity is growing steadily, I have personally witnessed this by working in the cell phone industry. The iphone is still popular yes, but many people are intrigued by the new and easy to use Android.

  3. Oloff Dreyer

    I think that Apples’ competition don’t really have much of a chance to catch up with Apple. This article outlines the reasons as to why they are at such a disadvantage, mainly the providers and the phone developers seem to be the issue, yet you would think they would sort out these complications to provide their market share with better options out of fear of losing what customers they already have. I think if these complications can be worked out, then Apples’ competition might have a fighting chance in the future. Apple apps is different from competitors by providing their customer base with the first app store and their marketing scheme they use. Apple products appeal to the younger generation and is also easy to use, which the competitors have as a downfall. I believe this advantage is sustainable up to a point, eventually the market will change and competition will catch up or evolve from something else.

  4. Ashley Halliday

    Apple has a competitive advantage over their competition with the ability to create a niche like marketing strategy for apple users. Owners of Apple products can appreciate the company’s user-friendly software and innovative products. Apple apps differ from their competition through their skill to promote their product into “must have” status. They do not limit their target audience making their products desired by all age groups, socio-economic backgrounds, race, gender and so on. For example, the new iPad has gained popularity among generation y and earlier showing that their technology is easy to use, even my granny can read books on a iPad!
    Apple’s ability to increase buyer awareness through iTunes and commercials makes it challenging for competing companies to gain popularity. The apps are easily assessable, relatively inexpensive, and Apple has an app for virtually everything; “there’s an app for that”.
    With that said, I think it would be difficult for Google, RIM, HP, and Microsoft to match Apple’s achievements.

  5. Kendra Warne

    Apple will continue to dominate the market, regardless of whether or not its competitors can create the programs required to keep up.

    Even if Apple’s competitors create a program that is better iTunes, there are two reasons why Apple will still dominate the market:
    1) Apple has created brand loyalty that is tough to compete with. This can be illustrated by looking around the library at your local university where a growing majority of students are using a laptop with a glowing apple on it. Also, ask a Mac laptop user whether or not they would switch back to the ol’ PC.
    2) Apple strives for product excellence and succeeds because they constantly change and evolve their products. If a program comes along that it better than iTunes, Apple will just implement their next version of iTunes or “must-have” product that will keep them on top of the market.

  6. Rob C

    Prior to apple’s major success within the past few years I was not an apple fan whatsoever. Sadly enough, it did not remain this way. I eventually began to encounter issues with my PC laptop and desktop and also with my mobile phone. Now, all technology is flawed when it comes down to it (We all know this). Each device will run its course and over the years will begin to encounter issues as wear and tear breaks down its functioning capabilities.

    But let’s say you begin to consistently experience problems early on in the lifecycle of your technical device. What then? Do you convert to the brand that everybody else is raving about? Well that is what I did. And fortunately enough, the transition has been a good one thus far. And the item I am most pleased with has been my iPhone.

    Apple’s huge success that has allowed them to separate themselves from the competition has been primarily due to their innovative creations and designs that attract consumers worldwide. Their apps have an additional essential to their products such as the iPhone and iPad that have stemmed from iTunes. I think that this essential has been an incredible creation and is just the beginning of what is next to come from apple.

  7. John

    Apple has a sustainable competitive advantage in this market for many of the reasons stated in this article, but the one that sticks out for the most is the simple fact that they have a huge market share of not just mp3 players, but also phones and the fact that they have integrated both of these technologies with that of itunes. They have successfully created a very simple and easy to use program that can be used on the go or synced at your convenience using your computer. Apple has also done an amazing job of distinguishing themselves from their competitors, yet still retaining control of their product with their own operating system, download program (itunes), file formats, and apps. Another thing that Apple has done very well is integration. Apple never makes a product that does not compliment another existing product or service, or at least work with it. This combined with their strong brand image and differentiation strategy gives apple a very strong sustained competitive advantage.

  8. katelynne.swenson

    I don’t think that any of these companies really have a chance at matching Apple’s achievements. Take the iPod for example. They weren’t the first in the market and definitely won’t be the last, but Apple has far surpassed any other company in its achievements and still dominate the market. Even though Google, Research In Motion, Palm/HP, and Microsoft all have similar products as Apple’s smart phone platform, I don’t think they will ever catch up to Apple. Apple has built a name in the consumers mind, that surpasses all of their competitors. Even though some companies may come close, they won’t take away any of Apple’s consumers which is a major part of Apple’s competitive advantage. Apple has made their App Store easy to use and user friendly and I don’t think another company can match what Apple has done. I owned an Andriod powered phone before my iPhone, and even though their “market” was simple, it has no where near the achievements of the App Store Apple has.

  9. Kevin Beauchamp

    I think Apple apps have a distinctive advantage due to their focus on the aesthetics and structure of the iPhone and the apps themselves. The iPhone is one of the only smartphones where the screen occupies the vast majority of the screen, which allows for more user interaction with the phone. It also allows Apple to create more unique and ambitious apps that are very user friendly. Apple has taken advantage of their apps as iPhone and iPad commercials focus on the app capabilities more than the product itself. However, the mobile phone industry is based on change and a sustainable competitive advantage for Apple is unlikely. A new type of distinct feature is always on the verge and could be implemented by a competitor before Apple is able to. However, it will be difficult for competitors to implement the best aspects of the iPhone apps while being unique themselves.

  10. N.P

    Apple is always on top with the latest technologies and now applications, they have completely surpassed the competetion and will continue to do so. They provide an abundance of advertisments to support their technologies as well as applications. This keeps them in the public eye and provides their public with more reason to purchase their product. Apple is quite innovative and regardless of the competition, consumers are going to want the newest and latest applications which Apple is willing to provide. Through their devices, appliations are easily accessed and used. I think this provides Apple with a sustainable advantage. The iPad was built to cater to many uses for consumers and one of those uses being applications. The use of each application through the iPad is quick easy and efficient. Applications used through the competitions devices may not be accessed as conveniently as through Apple products.

  11. Warren S.

    It does seem doubtful that any competitors can match Apple’s sheer number of apps. Apple seems to have the best user friendly “iTunes” to conveniently keep track of all apps and sync them easily to the portable ipad and itouch. My guess is that if any company can compete with Apple it is Microsoft. They hold a large percentage of people that constantly use Microsoft Office as an example. Easier said than done of course, but the fact that Microsoft has the pull of a large market share of their operating systems out in the world is certainly a positive in their favour. It then becomes a matter of creating an innovative easy to use system and integrates it with any Microsoft product. I would say that Apple has a huge head start and as a pioneer should see continued success for many years to come. Apple still maintains a large competitive advantage over the competition because they have the best all in one package, which seems very difficult to duplicate.

  12. Teigen C.

    Just as the article said, I believe that Apple’s success can be directly linked to their “easy-to-use” system. The fact that customers can purchase a prepaid App card, open iTunes and preview and shop for aps on their computer and successfully transfer them to the given device (iPod, iPad, iPhone) without having any problems or issues at all, is amazing. It is definitely the easiest and the most convinient way out there! Not only was Apple the first company to produce applications for their electronics, they did so in a way that consumers could use.

    As a blackberry user, I am very dissapointed in Research in Motion’s Blackberry Ap World. First of all, there are hardly any apps in comparison to Apple. Next, it is extremely hard to set up payment (using Paypal, or credit card). The only apps that I ever download have to be free ones for this reason. Also, I often find myself only ever looking at apps on my cell phone. Even though App World is online, it is not as well managed as iTunes.

    Basically, Apple has everything you want.. variety of apps, effective costs, and the whole easy to use aspect. I can’t see any other company compete effectively with Apple.

  13. Tara

    I agree with Warren S. that it is doubtful other competitors will match up to Apple’s achievements. The magnitude of growth that the App Store has generated is in large portion due to innovation, brand image and user friendliness. The Android’s progress is notable, however, Apple has built up such a strong brand image that customer loyalty is likely to stay with them.
    Recently I purchased an Ipad of my own and even though I am not a loyal Apple customer (own a HP laptop), the Ipad has been very easy to use and the applications really helpful. This will definitely influence my decision down the road when purchasing new technology and goes to prove how innovation can really boost a companies competitive edge, for short and long term.

  14. A.S.

    “The App Store has revolutionized how software is created, distributed, discovered, and sold. While others try to copy the App Store, it continues to offer developers and customers the most innovative experience on the planet.”

    As stated above, this is what makes Apple so different from its competitors. Apple’s competencies have given them a competitive advantage in the market. This includes a variety of factors such as new product development, user friendliness, accessibility, and brand image. But the most recent 10th billion app sold defines the companies core competency. Although it’s competitors have introduced their own line of App stores for their respective smartphone platforms, Apple has already claimed supremacy in the market through strong brand reputation, and will continue to be a dominant force for years to come. From the first product that Apple ever launched, to the latest Ipad, Apple will continue its legacy in being a global innovator in technology, software, and user friendly products, where no other competitor in recent time will have a chance to take lead in that market.

  15. Jolan Naismith

    As of today it doesn’t appear as though any other company presents much of a threat to Apple’s dominance in the “App” world. In an era where technology changes so rapidly and companies have the ability to adjust competitor’s issues before releasing their own product why is it that no one can catch Apple? Do they simply fill their cracks too quickly for others to take advantage of them or do they avoid cracks all together?
    As an individual who doesn’t currently own a smart phone and is constantly going back and forth between the iphone and blackberry this article was another notch for Apple products. To buy something because it’s cute doesn’t always pan out months down the road but Apple has substance behind their image, they are user friendly and consistent between their products. No one wants to have to take a course to understand their phone I believe this is one of Apple’s major advantages over other companies, it’s just easier. Until others can compete with that Apple will continue to dominate.

  16. AS

    Apple is such a dominant brand in the market of smartphone applications, it will be hard for Google, Research in motion, Palm/Hp and Microsoft to Apple’s achievments. Because of Apple’s centeralized Itunes App store accessible from your own computer it makes purchasing App’s extremely user friendly compared to competitors. If Google or Microsoft want to even come close to Apple’s sucess they need to develop a system that can do this and then create a competitive advantage to overcome Apple. It seems that everyone you talk to owns at least one type of technology that can download App’s from Apple (ipods, pjones, computers) it will be hard for Google or Microsoft to capture that market share. What makes Apples apps different from their competitors is there easy manageable system to organize them and purchase them . It also you access it from your computer making it easier to read about them and decide if you want to purchase them. This definately a sustainable competitive advantage. As well as Apple owns all the apps and where competitors have third parties developing apps and selling them to Google and Microsoft for a profit, therefore having a smaller margin. I think Apple will continue to dominate this market for a long time to come.

  17. t.sedrovic

    As the owner of a Blackberry, I have only a few problems with the App World, and it mostly has to do with the accessibility of the apps. I know there are some apps out there, which I’ve seen in commercials, etc. But sometimes it will NOT show up in my app world even if I search word for word. In my opinion these quirks will be fixed, and within a year, both Google and RIM will have the ability to compete with Apple in the world of Apps. As others have stated, I don’t believe their ability to sync with iTunes is all that great. I can sync my blackberry to my pc, but why would I want to do that when I can just as easily download the apps straight from my phone? It is easier to search for apps on a laptop yes, but when I have a hard time with the Blackberry AppWorld search, I just pull up google on my phone and search that way.. isn’t that why we have smartphones anyways? PC or Mac I am all PC, but Iphone or not does not matter to me anymore- the only reason that I chose Blackberry over Iphone is the rate plan was much better. I don’t think that Apple’s advantage with the App store is very sustainable.

  18. J.E.

    The problem with other app stores is that it is just too little too late. Apple came along with their brilliant way of giving users freedom to browse apps, read reviews on apps and even build apps with the purchase of apples SDK. I do not see how anyone could match what apple has done in the amount of downloaded apps in so little time ever again. I also believe that apples numbers will start to decrease as well. The Android based system is proving to be quite a great platform. I believe more and more people will switch to platforms other than apple’s OS in the future but I also do not ever see another mobile OS surpassing what apple has done. I do not know what the future of apple will be like but I also know I would not invest in them at this time. They are too much of a one man show and if Steve Jobs were to die it would be a bad day for the company and lead to a shaky future.

  19. Dylan B

    If we were looking at products alone, Apple destroys their competition in terms of quality, usability, and sales. If we look at purely the app stores offered by the major manufacturers, Apple has that market in the bag as well. I have a blackberry torch and an iPod touch and although I’ve always been a pc supporter (albeit not in the “my name is Dylan and i’m a PC” sort of way) the iTunes store is so far superior that its hard to defend research in motion. I can find an iTunes app in no time (as the selection is so far superior), download it, install it, and use it with ease. The blackberry app store is slow, confusing, the selection is poor, and apps are generally poorly designed. I’m a PC and a Crackberry-er but the fact remains that iTunes has found a winning model. Keep it up applefaces!

  20. m.lee

    At stated by Katelynne, Apple was not the first to market but have since surpassed its competitors. I believe this is due to its rapid growth that was not expected in the market. Before apple dominated the industry they developed iTunes, and as consumers where given the ability to adapt to this software before their version of the mp3 was released and they gained consumer trust. As Apple allowed users to view their system, more applications were developed. This allowed consumers of Apple to obtain a benefit if the joined the network. As Apple has established a reputation that has allowed them to gain over 90% of the market share I believe that competitors will have a hard job competing. Consumers are more likely to invest in a developed product instead of a product that has to play catch up with the industry leader. I am not very surprised that apple has gain market share in other products; as they are compatible.

  21. Wendy.R

    I believe that although apple has created a well established reputation, competitors still have the ability to compete. The competitors will have much ground work to catch up on and they might best be served to follows Apples footsteps. This would allow the competitors to narrow the gap between themselves and Apple. Although this would prevent them from differentiating themselves, the competitors could benefit from learning from Apples mistakes. I believe that Apples main advantage is that all of Apples products are compatible. Many consumers are reluctant to switch products once they have established themselves with a set brand. By striving to reproduce this advantage, competitors are likely to influence prospective buyers.

  22. Trevor.T

    I believe that Apples ability differentiate themselves from their competitors and ultimately give the customer what they want is their largest advantage. Oh and making it easy to use doesn’t hurt. When other companies develop products work together with ease I think we may see a shift in the market share. The only problem is that apple has developed a differentiation strategy that isn’t matched in their niche. But Microsoft was once their so really anything can happen. Someone has to come along with a better product, or apple has to fail in some regard to tarnish it’s reputation for anyone else to have a shot at a larger market share.

Leave a Reply

Your email address will not be published.