We have endless choices when buying products – from big chain stores like Walmart to local farmers’ markets and boutique shops. Similarly, businesses can sell through giants like Amazon or directly to consumers. So why do we limit ourselves to just 1-2 sources for our mobile app needs? Choice and consumer preference drive the market, and should apply with the same variety in our app selections. We’ve historically only relied on two providers for our mobile app stores: Apple and Google. But the cracks in the app store duopoly may signal the next era of app store choices for consumers and developers.
Balancing consumer trust and scale
Smaller developers have a hard time reaching consumers, and even if they can get in front of them, users are likely to trust the app stores they know – in most cases, those are the Apple and Google stores. A recent example of another big name entering the alternative distribution market is Microsoft’s recent launch of an online app store. This move signals the market shift and demand for more options. However, it is primarily possible because Microsoft already has a large customer base and numerous resources available, including an already developed, massive gaming portfolio. That said, it will still face challenges in driving growth and scale.
The need to add more applications, games, users, genres, and variety to the store, for example, would allow it to continue maturing. Still, these components take a lot of time and resources to develop. For Microsoft to maintain long-term growth and compete with Apple and Google as an app provider, it may need to partner with other app developers. This approach would open its market to a wider group of creators, further diversifying the app store marketplace.
This move from Microsoft is just the first push to having more options for direct-to-consumer distribution.
A perfect storm enabling D2C distribution
A need for D2C distribution has been threatening the current app distributors for some time, and now more than ever, there’s a perfect storm ready to finally blow apart the duopoly and create a new landscape. The current DMA regulation from Europe, developers’ needs for growth, and available technologies are working together to create space for app developers to reach consumers directly instead of through third-party app stores:
- DMA regulations from Europe: The EU’s Digital Marketing Act (DMA) has already cracked open Apple and Google’s mobile app stores and forced them to open their doors to more creators. Microsoft is looking to provide an alternative to the two beyond the EU, and more avenues will continue to follow, paving the way for a new app ecosystem.
- Developers’ need for growth: The current 30% commission charged by major app stores is untenable for small developers. This high fee forces creators to pass increased costs onto consumers, generating more barriers to success. With the right strategies in place, there are endless possibilities for new and innovative app experiences.
- Available technologies: Hundreds of alternative stores are already available, but they have only been successful in select markets. The next stage of alternative distribution solutions will include refining the technology to ensure secure, scalable distributors that will enable distribution across geographies.
Preparing for the next age of app stores
The largest companies are already working towards this massive opportunity, but alternative distribution is still largely in its testing phase. This raises possibilities for businesses to jump in now and stay ahead of the curve:
- Invest in research: Work is still needed to create viable avenues for app distribution. Ensure you’re investing time and research to eventually have a strong alternative solution. Learn what’s currently available and test different technologies until you have something that can work well and scale.
- Analyze industry trends: Pay attention to the industry and emerging trends. Developers want to reach new customers, but that won’t matter if they aren’t delivering apps that users want. Even the perfect technology will fail if it isn’t answering a relevant want or demand.
- Grow D2C channels of business: It will be competitive as we recreate the app store environment. Companies must have strong foundations across D2C channels, like optimized websites, strong brand identity, social media and marketing strategies, and great customer service. Taking small steps like finding a partner to bridge some of your gaps can be the answer to quickly showing up with the right technology and staying ahead of the game.
The future of app distribution: choice, flexibility, and options
As we move toward a new era of app store alternatives, the dominance of Apple and Google is being challenged by innovative distribution strategies, including those of major players like Microsoft. This shift, driven by regulatory changes, developer needs, and emerging technologies, signals an exciting new landscape for consumers and app creators. By investing in research, analyzing industry trends, and growing direct-to-consumer channels, businesses can capitalize on these opportunities and stay ahead in the evolving app marketplace. The future of app distribution is diverse and dynamic, offering broader choices that can reshape the industry.