Fixed Mobile Convergence

Although app stores continue to grow in popularity as a concept in 2011, app store industry consolidation will become inevitable, says Ilja Laurs, GetJar founder and CEO. 

But Amazon is launching a new App Store for Android (News - Alert), and clearly expects to emerge as one of the winners.

The prediction of app store consolidation is not unusual. It would be expected, at some point. "Just as there were thousands of search engines in existence ten years ago, app stores will experience consolidation," said  Laurs.  "In five years only six major app store players will make it, and in ten years, only two to three app stores will matter; all other app stores will become app store ghettos." 

Perhaps the interesting observation there is that although a handful of major app stores will dominate, there might still be room for a number of specialized app stores. One also might argue that the prediction that only two to three app stores will matter implies that the number of leading operating systems might be no more than two to three. The wireless market has tended to support multiple major operating systems in the past, though, and it is not so clear that such consolidation will emerge in the future, though many would generally support the notion of consolidation. 

In ten years, all closed app systems will need to open up or fail, he said. Closed ecosystems make it harder for developers to get their apps discovered, shared and monetized, Laurs argues. The salient exception might continue to be the Apple iOS ecosystem, though. 

There might be quite a substantial change in interface technology as well. The new paradigm is tapping not typing, so in the next five years, consumers will access more services using apps (touching) than typing universal resource locators.

 As consumers shift to mobile modalities, HTTP and WWW which require keyboards will still remain popular, but will play less of a role in an apps dominated world, Laurs argues. 

Laurs also argues that brands that understand and advertise on the mobile market today will have a competitive advantage in reaching consumers tomorrow. It took ten years for the Internet to attract ten percent of its advertising capacity and mobile ad dollars will likely follow a similar pattern. 

As virtually all consumers, young and old have a phone, and as smart phones in the United States outpace feature phones in 2011, brands that understand and advertise on mobile platforms will reach those younger consumers while brands that don’t, lose out.

Laurs also predicts that in three years most brands will have an iPhone (News - Alert) and Android platform presence. In the next few years, spend on apps will be roughly equivalent to today’s spend on web presence.

Tablet devices will explode in popularity and their sale patterns will be similar to that of netbooks five years ago. While the iPad remains an expensive, niche device, tablets that leverage Android as an operating system (such as the Archos or Samsung (News - Alert) Galaxy 10) will benefit from lower price points, open platform, and wide spread availability from common retailers, Laurs believes.

The Amazon App Store for Android, which will launch sometime later this year, is aimed at creating a high-quality destination for Android app buyers and will give Android users a trusted place to pick up apps. You might well wonder why there is a need for an alternative to the Android Market.

Too few discovery tools and categories, little marketing support and use of Google (News - Alert) Checkout, a system that many users don’t seem to want to use, are some of the issues.

Amazon will take a 30 percent cut of the sale price, the same as Google and Apple. There is a $99 developer fee that Amazon is waiving for the first year. Developers must set a list price, but Amazon will be able to discount the app on its own. Developers will get at least 20 percent of the list price on discounted apps.