Needed: A Neiman Marcus for Mobile Apps

Apple’s App Store has become something of a Moroccan bazaar, an overwhelming place where tens of thousands of products are offered at a range of price points, from free (OK, so the bazaar analogy isn’t perfect) to $100. The shelves are especially crammed with sub-$2 apps, though, which lean heavily toward the kind of novelty junk consumers use for a few days and then forget about.

A new Yankee Group study predicts prices for premium mobile apps will ramp up over the next few years. One in four mobile downloads will be a paid app by the year 2013, the firm predicted, with the average price of $2.37 — less than a ringtone. The report has industry scribes wondering “How Much is Too Much?” when it comes to pricing your app, and it’s a good question.

But Apple’s virtual Dollar Store makes me wonder if there may be an opportunity for an upscale retailer of high-value — and high-dollar — apps. A player who can separate the wheat from the chaff for busy users who’d rather pay $10 or $20 for a productivity app — or even a couple hundred for an enterprise offering — than shell out a buck for a fart simulator from the vendor’s top 10 list? In other words: Who will be the Neiman Marcus of the mobile-app world?

It’s no surprise we haven’t seen such a player yet, of course. Apple’s retail outlet is the only store to have gained mass-market traction among smartphone users, and the Cupertino gang doesn’t allow other vendors to distribute apps to iPhone users. But that also creates a unique opportunity for Apple to set itself apart from, well, itself. The company could help solve its substantial problems with discoverability by establishing a store within its store and using a new brand to flag useful, premium apps that bring actual value instead of just a few chuckles. (Golden Delicious, maybe? Nevermind.)

Other platform operators could employ the strategy too. I think RIM has an opportunity to exploit the high end of the mobile-app spectrum by targeting productivity-minded users with premium apps and letting other distributors sell cut-rate or cheap offerings to BlackBerry users. Microsoft might have an opportunity here, also, if it ever gets its Windows Mobile house in order. And the field is wide open for third-party vendors who could distribute apps to every non-exclusive smartphone operating system (which is to say, nearly everyone but Apple).

Mobile users proved years ago that they’d happily shell out a few bucks for an app that does nothing but play 30 seconds of crappy-sounding music. I think there are plenty of smartphone users who’d enjoy an elite shopping experience that doesn’t require them to sift through apps that, say, turn their phones into Star Trek phasers.

Question of the week

Would you shop at an app store that featured only premium, high-value apps?
Relevant Analyst
Colin Gibbs

Colin Gibbs

Founder and Principal Peak Mobile Insights

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3 Comments Subscribers to comment
  1. Stephanie Rieger Friday, October 9, 2009

    ^^^The ‘store within a store’ idea is excellent regardless of the type of content chosen (i.e. it doesn’t have to be high-end). Discoverablity within large collections is always a problem when editorial and curation don’t occur.^^^ There are sites on the web providing daily recaps of interesting applications but an extension of this approach into the app stores themselves would be welcome.

    There is maybe an apt comparison to be made between current app stores as a ‘big box retailer’ whose goal is to maximize physical flow and findability throughout the store but doesn’t dwell on the products themselves. They may well feature blenders one day and kids’ toys the next.

    By comparison, a more boutique store might still stock many products but would also have internal champions who monitor product categories and review, suggest, and manage featured items based on social and genre trends.

    Kind of like bricks and mortar music stores used to before many of those turned into box stores as well. The overall product was music, but the owner was maybe a jazz aficionado while some of the other staff might be able to best advise you on classical or pop.) To the consumer, the experience was more personal and you were far more likely to come out of the store with something wonderful.

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