Last week, I talked about Steven Frank's conflicted feelings regarding the App Store, and how I share many of the same qualms. While discussing this, however, I also said:
"As a businessman, I'm in awe of the potential to so easily reach millions upon millions. The App Store really is a fantastic new opportunity for developers to reach customers with much less work than on the desktop."
I absolutely mean this. The App Store represents one of the first centralized, direct-to-the-customer software distribution method we've seen outside of the video game industry, and it's already the most successful. This really serves as a fourth age in terms of computer software distribution for independent software vendors (ISVs).
The First Age: Boxed Products
Thirty years ago the only way to get software was in a box from a store or a vendor. You read about software, purchased it, and hoped it lived up to the marketing, because there was no ubiquitous method for trying before you bought. The market for software developers was relatively small, because there were significant startup costs.
The Second Age: Shareware
Twenty years ago, shareware began to take off as a distribution method. Software could be found on BBSes and floppy disks. Demos were passed around between friends and full copies or licenses were purchased via mail. Customers had a much better idea of what they were buying, and more hobbyists could create and sell software, often earning a decent amount of money from it.
The Third Age: Internet Distribution
In the past ten years, the mass acceptance of the internet has made software distribution still more efficient. Software developers can now easily offer downloadable trials right from their websites, available twenty four hours a day. Users can quickly search the web or myriad software sites and find the products to meet their needs. They can then download a trial, test it out, and if it meets their expectations, purchase right online. The ease with which a software company can now be started has made it possible for thousands of developers to earn a living selling software.
To be sure, software is still sold in stores, and magazines still have discs with trials on them, but online distribution is far and away the most popular method for smaller vendors to use to get their software to the public. These ages are not precise nor discrete, but it's certainly clear how distribution methods have shifted.
The Fourth Age: Centralized Distribution
Now, we seem to be at the dawn of the next distribution method, with software coming from a centralized store. Taking a cue from the video game industry, Apple has put all the available software for the iPhone together in one place. Customers don't need to search the web, just the App Store. There, they can compare reviews, pick a product, and purchase it, all with just a few clicks. The software is then instantly downloaded and installed to the phone. Once an iTunes account is established, they never need to enter their payment information again, or worry about much of anything - the entire process is streamlined.
A centralized store has many advantages, both for customers and developers. The ease-of-use is obvious, and the easier it is for a customer to buy something, the more likely they are to do so. That's obviously good for all manner of developers as well. Indeed, it its first month, the App Store sold $30 million dollars worth of software, which is no small feat.
Currently, however, the App Store doesn't co-exist with any of the other distribution methods. I've noted before that I'm hopeful this will change in the future, and other ways of getting software onto the phone will be made possible. For that matter, I'd love to see AN App Store on the Mac too. Time will tell just how widespread this centralized distribution method gets, and if Apple continues to lead the way on both the iPhone and other platforms. As a developer, I'm always excited by things that get users using and buying more software for their devices, so I'll certainly be watching closely.
Great post. FYI posts in your RSS feed appear in Google Reader as one big paragraph. Quite hard to read.
Yes, this has been very interesting. I've been following the pinch media feeds almost daily. Off the cuff, I'm seeing around 20 apps per day added, and usually a little more updated. That's incredible.
As a developer (iPhone or otherwise), I find the on-phone app store the most appealing thing. It's ease of use and accessibility preys on human impulsiveness of the many, many users with iPhones. Great for business and none of the other distribution methods come close to that.
Nevertheless, I'd be very curious to see the "books" of folks developing these apps. The prices of items tend to be very low (~$2). So I'm finding it hard to believe that most folks revenue is exceeding their development costs.
I think you're missing one fairly important age of software distribution, possibly two. Back in the early days of the TRS-80 and Apple II - heck, even extending somewhat into the first home computer boom - hobbyists had a much greater presence in the software market than you imply. For one thing, software was simpler and easier to write - especially for the somewhat tech-biased users of the early microcomputer years. For another, production values were much lower - even at higher-class stores like Computerland, it was still possible to see software packaged in ziploc bags with photocopied documentation, easily within the production means of an individual. Finally, an awful lot of software was sold by individuals out of ads in the back pages of magazines like Byte, Creative Computing, and 80 Microcomputing - easily enough, since in those days (as I remember) those magazines were the primary method of sharing and exchanging information outside of the local user group level, or the tiny closed-in university population of the early Internet.
(In fact, in some ways the magazine era parallels the iTunes App Store - the dissemination of information about software was combined with the avenue for purchasing it.)
This mainly changed when software started reaching a more general mass-market-user; distribution outside of specialty computer stores required fancier packaging beyond the reach of most individuals (remember the Sears Computer Centers?), and placement in those stores required something more than individual store buyers' seeing the software in a magazine and thinking it looked interesting.
In the very earliest days, of course, people distributed software by handing around paper tapes, a la the notorious Bill Gates BASIC. :)
What would be the advantages if the AppStore is made to co-exist with other distribution methods or channels? Will it be better for the customers?
Dominique James: To me, the advantage is choice. There are many applications that aren't available to the average consumer, because they can't get approved for the App Store. With other distribution channels, this issue goes away, and consumers have access to all sorts of new software.