When the Android-based G1 smartphone debuted six months ago, it was heralded as the biggest smartphone game changer since Apple’s iPhone arrival in June 2007, thanks to the newcomer’s open source platform and its powerful backer — Google.
And while the Android has lagged in third-party application development since the G1’s launch, it may be poised to close on Apple’s (NASDAQ: AAPL) wide lead in downloadable apps.
That’s if Android makes good on plans to begin adding paid applications to its Android Market store — a move that could happen as soon as week’s end, according to a report in the Wall Street Journal that cited unnamed sources.
Google (NASDAQ: GOOG), the primary mover behind the Open Handset Alliance, which officially oversees Android development, declined to elaborate on previously disclosed plans for paid apps.
“The only thing we’ve publicly announced is that paid applications are coming to Android Market in Q1 of 2009,” a spokesperson from Google told InternetNews.com. The company initially revealed those plans in connection with the G1’s introduction in late September, a month before the Android Market actually went live. The spokesperson declined additional comment and said the company would post any updates to Android’s efforts on its developer blog.
The report comes as third-party software development is emerging as a way for carriers and smartphone manufacturers to lure new customers and retain subscribers. Increasingly powerful devices and improvements in hardware design, such as the touchscreen popularized by Apple’s iPhone, have also further encouraged software development on the platforms — in turn, enticing buyers seeking mobile games, tools and productivity applications.
In mid-December, Palm launched its own mobile storefront, the Palm Software Store. The next month, the Treo maker gave a first look at its upcoming smartphone, the Pre, which will hinge heavily on a sleek design, an iPhone-like touchscreen — and downloadable apps. The company’s storefront opened with 5,000 applications for over 25 existing Palm (NASDAQ: PALM) devices, with about 1,000 of the applications available for free.
Microsoft is also thought to be weighing an Apple-like storefront for mobile downloads, according to a Journal report. Meanwhile, BlackBerry maker Research in Motion has plans in place to debut a store for its own ubiquitous line of smartphones within the next several weeks.
Apple at the forefront
Leading the recent charge into downloadable applications has been Apple’s App Store, which debuted just days after the iPhone 3G launched last July.
Modeled after Apple’s wildly successful iTunes store for downloading music, podcasts and videos, the App Store tallied 10 million application downloads in its first week. While the uptake benefited from existing users of Apple’s first-generation iPhone, the pace has yet to show signs of slacking: Since then, users have downloaded a total of 300 million apps, according to the company, with about 10,000 programs available for download as of December.
[cob:Special_Report]In comparison, the Android Market opened last September with 50 free applications — less than ten percent of Apple’s figure at launch. And while Google told InternetNews.com that the number has since risen to 1,000, it’s still a huge gap for Android to close.
Still, its software’s development community offers two things Apple’s lacks: fewer restrictions and a bigger share of the profit. And both could help woo developers to the fledgling platform.
Page 2: What’s in it for Android developers?
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With the Android Market, developers get 70 percent of revenue from each software purchase, with the remaining amount going to carriers and billing-settlement fees. Google does not take a percentage.
Google detailed its stance on the matter in an October blog post: “We believe this revenue model creates a fair and positive experience for users, developers and carriers.”
Apple, however, splits paid software revenue with the developers, with the iPhone maker claiming 30 percent of the revenue.
Additionally, Android’s policies mean its developers don’t need approval from Google or even T-Mobile, the G1’s exclusive wireless carrier, in pushing applications to the marketplace.
Over at the iPhone store, Apple has total control over which applications can be listed and sold through the service. The company, which must approve any apps listed on the App Store, cites security and quality control as reasons for its policy. However, it’s prompted some developers to criticize the approach, complaining that approval can take months, and that Apple has wide leeway in rejecting applications.
Yet with the iPhone App Store’s rampant popularity, it’s difficult to argue that Apple’s approach has hurt its efforts. Spokespeople from Apple did not return requests for comment by press time.
App stores on the horizon
Google’s not the only player in smartphone software betting on reaping the benefits from distributing mobile applications, however.
In addition to Google and Palm, industry insiders are watching BlackBerry maker Research in Motion (NASDAQ: RIMM) and its upcoming foray into application marketplaces. The company announced late last year that it’s readying its first official BlackBerry storefront for launch in March.
Even Microsoft (NASDAQ: MSFT) is also signaling its interest in the area. In fall, it began dropping hints about launching an App Store-like effort. The storefront, according to company job postings, is to be called SkyMarket and would provide applications for Windows Mobile 7, details of which Microsoft has not disclosed.
Microsoft has also launched a site for a mobile backup service called My Phone at GetSkyBox.com. The service backs up smartphone data to the Web, including users’ contacts, photos and information.
The company is expected to release details of its much-rumored mobile plans next week at the annual 3GSM World Congress in Barcelona.