Following the success of the iPhone app store (over 6 billion downloads to date), app stores are becoming more and more of a feature of the software landscape. In case you missed it, Apple announced yesterday that there will be an App Store for Macs ‘within 90 days’. In summary:
The Mac app store will be tightly integrated with Mac OS X, including automatic install and update.
There will be restrictions on technology, for example Java apps will not be allowed.
Apple will keep 30% of any revenue from sales.
$99/year subscription for developers.
Developers will still be able to sell their software outside the App store.
It is easy to see why Apple would want to do this:
A potentially huge new revenue stream from third party Mac software sales.
They get even more control over the customer experience.
And this could have advantages for Mac users:
Simpler payment and installation.
Screening out of low quality apps and malware.
And potential advantages for Mac developers:
Mac users might buy more software if it is easier to do so.
One main channel to concentrate your marketing efforts on.
Some of the boring infrastructure of selling software (licensing, shopping cart etc) can be taken care of by Apple.
But the disadvantages are all too obvious:
Your app could be rejected outright. And you won’t know until you submit it for approval. Apple are judge, jury and executioner. The iPhone app store has been infamous its capricious and opaque approval process.
30% is a huge chunk of revenue. Typical payment processors take 5-10% of revenue. Where the new app store cannibalises existing sales (and it is hard to see that it won’t) vendors will lose 20-25% of existing sales revenues.
New apps and updates will be delayed by days or weeks as they go through the app store approval process.
A single centralised app store is likely to make it harder for niche/long-tail apps to make any sort of living. Certainly this is what seems to be happening in the iPhone App store.
Apple are control freaks and have traditionally taken a rather heavy handed approach with developers, including the liberal use of NDAs. The app store will give them even more control.
And worse might follow:
Apple makes a lot of their money from selling over-priced hardware. It may be in their interest to drive software prices down so they can sell more hardware. $5 is considered expensive in the iPhone App Store.
This could be the first step to making Mac OS X a closed system, like iPhone, where only Apple approved apps can be installed.
I guess they can’t piss off developers too much – a computer without third party applications isn’t going to be very attractive to customers. But I am finding it hard to work up any enthusiasm for a Mac app store. If it is successful I can either be in the store and give up a lot of freedom and cannibalize exisiting sales at a much lower margin, or stay out and be shut out of a large chunk of the market. It isn’t an attractive choice. As my app is written in C++/Qt, rather than Objective-C/Cocoa, I am not even sure that it will be eligible for inclusion in the store. I could just abandon Mac OS X, but Microsoft is also rumoured to be working on their own app store (despite the failure of DigitalLocker). That is a truly terrifying prospect given the awfulness of their ‘Works with Vista’ approval process (I speak from personal experience).
I scanned the Microsoft ad below from a recent QBS catalogue.
click for larger image
I am still struggling to understand the underlying message. Use Team System and Microsoft will get its tentacles around you? I don’t know which is more unlikely, the basketball playing Cthonians or the athletic and good looking development team.
I am currently downloading the new Windows 7 release candiate. It is 2.36 GB and the ActiveX download control predicts it will take around 10 hours in total (NB I am also doing a large FTP upload, which is probably slowing it down considerably). Once the download is complete I intend to install it in a VM to test my table planning software.
You can download the latest Windows 7 release candidate here. It is free to download and use, but it expires on 01-June-2010 and will shutdown every 2 hours starting on 01-March-2010 (insert your own joke here). A couple of points to note from the Windows 7 FAQ:
While the RC is stable and has been thoroughly tested, it’s not the finished product. Your computer could crash and you could lose important files. So please back up your data and please don’t test the RC on your primary home or business PC.
When you use the RC, your PC sends information to our engineers to help them check the fixes and changes they made based on Beta tests.
2008 was a good year for Apple and Mac OS X. According to netapplications.com data (via sharewarepromotions blog) Mac OS X’s share of the OS market increased from 7.31% in Dec 2007 to 9.63% in Dec 2008. That is a 32% increase in market share during 2008, compared to a 22% increase during 2007.
Windows market share fell from 91.79% to 88.68% in the same time. While Mac OS X’s annual gains are impressive, it has a long way to go to catch Windows. 15 years if you project the 2008 gains forward.
Of course, it is highly questionable to project 15 years from a single year of data, but it gives an idea how much work Apple still has to do.
My data also shows that Mac users are twice as likely to purchase my software as Windows users (I have heard similar figures have reported by others). So Mac users currently account for 20% of my sales. I wouldn’t want to live off my Mac sales, but it is very useful additional income. Given the disparity in cost between Windows and Mac hardware it is hardly surprising that Mac users are more ready to reach for their credit card.
My software is built on top of the Qt cross-platform toolkit. The recent porting of Qt 4.5 to Cocoa gives me the opportunity to further improve PerfectTablePlan’s Mac look and feel and to release a 64 bit version. Hopefully this, coupled with increasing Mac market share, will further improve my Mac sales.
Microsoft Adcenter helpfully sent me a link to lists of low cost keywords I could advertise on, categorised by sector, to “unlock new customers”. I had a quick look through the ‘sport and rec’ list. Here is a small sample (click to enlarge):
There are lots more where they came from. Microsoft say:
These keywords are actual terms recently used by your customers on Live and MSN Search Engines and are available at a low cost while very few other advertisers are bidding on them.
Did they do any QA on this list? Exactly how many people are searching on “vn b m gn mbnmncbm xbc bcv 0 vfkmjirhtfnkj nb b x bmnx bv”? What has dogging (not work safe) or Hare Krishna got to do with rugby? Is it any wonder nobody is bidding on “duck porn”? Are there really that many people interested in pictures of nude female bodybuilders (apparently)?
Thanks Microsoft, but I’m really not sure they are the sort of new customers I want to unlock.
There are some pretty unpleasant ones I didn’t include.
I have long suspected that Microsoft adCenter is over reporting conversions. Here is the confirmation from my adCenter reporting:
I am guessing that the purchaser visited the ‘thank you for your purchase’ page (which contains the conversion tracking script) 5 times, for whatever reason. I can’t think of any other way this situation could occur – the conversion tracking isn’t set up to take account of multiple purchases in one transaction. How difficult would it be to only count the first visit? Google can do it.
Being cynical, perhaps the over reporting suits Microsoft? But it makes it much more difficult for me to assess the real effectiveness of keywords and ads. Another good reason to concentrate my efforts on Google Adwords instead.