Are Multiple App Stores Good or Bad?

I saw an announcement today that BestBuy is looking at setting up an Android App Store. This comes after Amazon has said it wants to set up an App Store for Android, along with Verizon’s launch of their own store. These, along with the original Android Market, would bring the total number of stores I’ve seen announced to 4. Is this a good thing though? This approach contrasts the approach taken by Apple and Research in Motion, who run single, curated app stores, that offer the only official source for apps for their respective devices. There are other venues you can obtain apps for iPhones that have been jailbroken, but none of those are official.

On the surface, the first thing that would appear to be a benefit is that customers could find apps at a lower price on one store vs. another. However, given the staggering number of free apps, or apps for minimal prices like $0.99, I’m not sure that there would be that much of a price break. Many of these apps are already priced at or near their lowest price. It would provide some price pressure on more expensive apps, but overall the savings are pennies per app. Sure, it would add up over time, but I’m not sure it is something most people would generally keep track of. The fact that they saved a nickel on an app may or may not matter in the bigger picture. Add on top of that restrictions on some app stores that will limit how much price variation can exist (the Amazon store is rumoured to have a restriction saying a developer cannot sell their app for lower price than the one that appears on the Amazon store), and the potential for savings is minimized or removed completely.

An advantage an app store like Amazon or BestBuy would carry is the brand name: they are names people know and recognize, and trust to some degree. Having an app store through Amazon adds a lot of credibility to the app buying process, and could provide a degree of “comfort” to people who may be uncertain about the legitimacy of other stores. This in turn helps with the marketing of apps, because if Amazon sells it, it adds a degree of credibility to the app itself.

For Amazon, an app store also provides another element to their growing “one stop shopping” environment they have been cultivating and growing. People already buy books, movies, music, electronics, etc from Amazon, and this is just one more thing you can get at a store that many people know and trust. BestBuy’s market focus is a bit narrower, but an app store fits within their technology-based mandate for product sales.

The downside for consumers, though, is the need to visit or work with multiple venues for app upgrades. By having a single app store for iPhone and Blackberry, it also means a single location to obtain upgrades for your apps. With multiple stores, first the consumer has to check multiple places for app updates. Second, if a developer updates their app on one store, but not another, then some customers may be “stuck” on older apps until the upgrade is available (assuming it makes it to the store at all).

For developers, multiple app stores would be a blessing and a curse. Having multiple stores means you have more potential visibility for your app, and more places for people to discover it. But it also means setting up multiple payment agreements, each with varying terms and conditions. It means that, when you roll out a new app, or an app update, you would have to provide it to multiple stores, potentially with slightly different packaging and submission requirements. Initial rumours about the Amazon store have indicated that apps on the store would only be allowed on Amazon-approved devices, and will include some kind of DRM specific to Amazon. It also appears that Amazon may be placing restrictions on how developers can price their app on other stores and rules for availability on other stores. I would expect similar restrictions from other app stores run by big-name organizations.

You also have the issue of your app or updates being made available at different times, so your app may be available for sale on Amazon in a couple of days, but may not make it to the BestBuy store for a week or more. This isn’t a big deal, but could be awkward when people ask where the app is on a particular store, and if you have to point them to a store they would rather not use, then you potentially have lost a sale. It can also mean customer complaints as some customers get updates, and others don’t, when you are faced with a problem within the app that you are trying to fix.

For the most part, consumer choice is good. Competition forces companies to improve their products and services over time, and generally (but not always) weeds out anyone who is complacent or incompetent. It typically results in a vibrant market with a variety of price points, feature sets and performance options. But, consumers do have to live with some of the consequences of that choice: vendors that go out of business (and thus no longer support their products), products that aren’t available at all retail outlets, and dealing with multiple retailers and manufacturers for any after-sales service. In most cases, these downsides aren’t really a problem. Where they can become an annoyance is when the after-sales interactions are continuous, and thus fragmented. I am constantly seeing updates to apps for my iPhone. I can’t imagine also having to check two or three other stores for updates as well. I know that I would forget about them from time to time, particularly if it is a store I don’t use all that often.

As a developer, having to deal with multiple retailers with varying rules, requirements and restrictions is not very appealing. The simplicity of a single store per platform definitely makes managing the sales and distribution interaction a lot easier. But, having multiple locations to be able to promote app sales has some attraction: it is a chance to get more eyeballs on the product.

In the end, my reaction to the idea of multiple stores is mixed. Unfortunately, I think the only way to see how this shakes out is to let it play out, and see where it goes. My fear is that fragmentation, in the end, may cause more harm than good, but I’m not sure that will be the case. This is an experiment that needs to be run, and the outcomes observed as the experiment unfolds.