It was an excellent panel – despite being a bit stale, pale and male.

But I can’t help feeling that the central premise of the event was flawed.

We were meant to be discussing the “emerging economy” of mobile applications.

Emerging

Emerging? Mobile apps are beyond that. They have emerged. They are mainstream and they have been for a while. Vodafone* has been selling apps for nearly 6 year. Other mobile operators have been selling games, application, tools, utilities, ebooks, and other apps for just as long.

And it has been profitable.

Economy

Ah, that word, “profitable”. I’m not an economist, but I would have thought that an economy requires the exchange of money somewhere along the lines.

The vast majority of downloads from app stores are free. Now, undoubtedly a few of those free apps lead on to purchases – but not many. (See Tomi T Ahonen’s amazing dissection of the hype).

Then there’s the pricing of the applications themselves.

A game like Angry Birds (which seems to be a favourite) costs around 59p. A few years ago it would have sold for £4.99 via an operator store. 15 years ago the same quality game on the MegaDrive would probably have cost around £35.

Cheaper prices are good for customers – but are they good for the economy when the price continually trends downwards?

So we have a range of apps with an average price of £0.00. Of those that cost, the monetary sums are very low. Making money from apps is a fool errand.

So, who is making money?

The developers aren’t – not in any significant way.

The payment gateways aren’t – 30% of 0 is still 0.

Advertisers are – lots of adverts on apps which are given away.

The device manufacturers are – they can sell more hardware on the basis of freely developed 3rd party content.

The operators are – they’re selling more phones and more data bundles.

So what (if anything) has changed?

Open

What the app space hasn’t been is open. True, anyone could develop a J2ME or S60 app – and many did. But getting them distributed was always hard unless you could do a deal with a major publisher.

Now, the middle-man is (nearly) gone. The developer can submit their work to a central app store and have it in front of potential customers. Almost instantly.

Quality

Because there are many more highly-spec’d phones and SDKs have improved immeasurably, there’s been an outpouring of new developers.

But are they any good?

In the bad old days – when people actually made money from apps – there was a quality threshold.  If an app was buggy or crap, customers would ring up a call-centre and demand a refund.  That’s costly to a company, so naturally the bar for apps was set fairly high.

It also encouraged conservatism – releasing a beta app with experimental functionality was a risk.  Few people would buy it and the cost of refunds could be horrendous.

Now, we have everyone and her sister developing iFart apps.  Reading the reviews of paid-for apps can be quite depressing – constant tales of broken or missing functionality.

So, we have a decrease in price and a decrease in quality – but a rapid increase in supply.  Rapid to the point where developers struggle to even give away their product.  Is this a healthy economy?

What’s Next

Despite my grousing, I enjoy living in a world where anyone – even me – can develop an app.  The financial rewards are more like a lottery than a business, it’s true.  The rewards to society where a company can take a punt on a product like AudioBoo are immense.

But can it last? I’ve no doubt that this current boom will mirror the home-computer boom of the early 1980s.

The fragmentation that bedevilled that market will weaken the mobile marketplace – even with initiatives like JIL and WAC.

We’ll probably see another Codemasters emerge from Britain’s bedrooms – and the rest either get bought out or fail.

But I bet they have fun doing it.

Disclaimer.

*I work for them but this blog is a personal comment. Please set your bias filters accordingly.

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You can grab it by pointing your ‘Berry at http://blackberry.mobi/appworld.

First off, it’s very good looking. A good layout showing featured apps. Underneath are links to Categories, Top Downloads, Search, and My World (where you can see what you’ve downloaded)

There’s a fairly large selection of applications already available – not as many as iPhone, but this is a lot newer. The applications have a more professional feel. There are a few “fart” apps – but not the hundred which clog up Apple and Android.

The Top Downloads section is well arranged

Interestingly, RIM have chosen PayPal to handle the billing. This means they don’t need to do deals with carriers or set up their own payment gateway. I can’t help but wonder how much they will have to give away on each transaction and how many people will be turned off after suffering PayPal’s lousy customer service.

A note to Apple – you don’t need to sign up to PayPal in order to download free apps. Take the hint!

Again, a well arranged My World section allows a user to send in reviews for the apps.

The recommend functionality is well integrated.

If you have AppWorld installed, your ‘Berry will recognise the link and attempt to open it in the AppWorld, rather than the browser.

This is where it starts to go wrong. If you try to open the link in the web browser, you don’t get taken to a mobile friendly page. This is simply inexcusable.

Overall, this is a really solid offering from RIM. They’ve taken their time and come up with a quality product. Very interesting to note that while there are some free and sub-$9.99 applications, there are some apps ranging from $49.99 to $200. Wow. These apps are obviously targeting business users who haven’t quite get their head around the credit crunch yet.

Only two things spoil the party.
1) Pricing is in USD – there doesn’t seem to be an option for GBP or CAD (the AppWorld is currently only available in US, Canada and UK).

2) I made it crash

While a loading screen is running, hit the BB button, then select “Read Reviews”.
The crash is nothing too serious, but it does point to a little lack of testing.

Very impressive RIM, let’s see how it evolves.

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