App Store Market Consolidating, says research2guidance

Mobile-specialising analyst research2guidance has released its Smartphone App Market Monitor Vol.5 2011 report, which warns that the market for full-catalogue app stores, in competition with the Apple and Android duopoly, is dwindling.

After the opening of more than 30 app stores in 2010, largely from MNOs and OEMs, proved to have little impact, the report says, 2011 saw fewer entrants to the market. Both the Apple App Store and the since-rebranded Android Market, meanwhile, continued to gain momentum, with numbers of downloads increasing – to more than 1bn per month each by Q4, 2011.

According to research2guidance, 2012 will likely see more consolidation, as more stores will seek alternative monetisation, hope to be acquired, or follow Microsofts example in closing down the Windows Store, and exit the market altogether.

“At this point, any new market entrant will need to provide something fundamentally different to what Apple and Google are offering,” says research2guidance research director Grace Gair in a blog post, “or invest a significant amount of money (e.g. Microsoft’s investment in the development of the Window’s Phone Marketplace).”

The analyst points towards potential substantial alternatives for entrants to the app store markets – including web app stores, facilitated by the development of mobile browsers, or targeting niche segments of the market as a potential – one area which blossomed in 2011, with nearly 100 in existence by the end of the year.