UPDATED. The app store battle is just starting as more and more players from Amazon, Verizon and now Opera are getting into the act. And with all the growing competition for what could be an estimated $38 billion market by 2015, it’s inevitable that this jockeying is leading to some competitive measures. The latest sign of that is independent app store GetJar’s move to ban Opera Mini after Opera announced it was launching its own app market within its mobile browser.
The ban, first announced on GetJar’s Twitter account, shows that app store operators are closing any opportunities for competitors to come on in and set up shop within their stores. GetJar said in a Tweet that Opera violated its terms and conditions and said, “one thing we can’t do is promote competing app stores.” In a comment to TechCrunch, Opera said it was working with GetJar to find a solution to include Opera Mini, which has historically been a popular download on GetJar. GetJar is expected to share more about its stance in a blog post today. But I expect others like Apple and Google to also reject Opera Mini in their stores on the same grounds GetJar cited. There are clearly repercussions from setting up an app store in someone else’s app store.
This should come as little surprise. With the market for apps booming and everyone and their mother setting up app stores, the owners of those stores are now eyeing anyone who can compete with them. It’s one thing to compete openly, but marketplace operators are clearly drawing the line at competitors trying to leverage those markets only to direct users to purchase apps elsewhere.
That’s what Google has been quietly doing with Android Market. If you recall, it pulled Kongregate’s Arcade app, which wasn’t technically an app store at all, but a browser that featured free Flash games from its website. But because the app apparently too closely resembled a competing app store, it was pulled and later reinstated when the app was remade to look more like a browser.
I recently reported on another app that was pulled from Android Market, called Visual VoiceMail, an app from longtime developer PhoneFusion. The reasons behind the rejection were never explicitly provided by Google, but after doing a little digging, it looks like it was also pulled for competing with Google. The app has an option for buying an ad-free version directly from PhoneFusion’s website. The ad-free version has been available for at least a year, but it appears Visual VoiceMail was removed for violating Google’s non-compete rules. That’s the message Google and others are quietly sending out to developers. You can be in our store, but don’t go competing with us on our own turf. That’s what a Google employee basically told me after the Kongregate situation, and that’s increasingly how all app stores will operate.
That makes me wonder how Amazon will set up the Amazon App Store on Android phones. Increasingly, it looks like it will have to strike deals to get placement on the phones themselves, because I doubt Google will allow Amazon to use Android Market as a way to distribute its store.
This is part of a larger push by store owners to channel all transactions through their own markets. Apple has made a lot of news with its subscription plan for publishers, requiring them to use its in-app purchase mechanism and cutting off their ability to direct consumers to offsite sales. Google recently announced its own in-app payment system, and I’m guessing it will also soon force developers to use its payment system over alternative systems. It’s all about keeping as much revenue as possible in-house. We’re still early in the app store revolution and since it shows no signs of slowing, anyone with an app store is looking to ensure they keep as much of the money that passes through their marketplaces as possible. GetJar’s ban of Opera is just the latest example, but expect more shots to be fired as the app store battle turns into an all-out app store war.
UPDATE: GetJar CMO Patrick Mork wrote a letter to GetJar users explaining the rare rejection. He reiterated that GetJar welcomes competition but can’t abide in apps that divert customers away from GetJar’s store. He said GetJar has worked with Opera for months on the issue and is disappointed to pull Opera, which has recorded more than 30 million downloads on GetJar.
The simple problem is that Opera mini decided to include a competing app store in its browser. Although we don’t have any issue with this in principle, in practice it means that consumers might start using this app store instead of visiting GetJar to get their favourite apps. This robs GetJar of traffic and therefore of the advertising necessary to keep our service free for the more than 25 million consumers that use GetJar. It also jeopardizes an ecosystem that has generated over 1.6 billion downloads for tens of thousands of developers who depend on us to make money from their apps. Don’t get me wrong: we’re happy to go head-to-head with any other app store and are certain that once you’ve tried the Opera App store you’ll find the depth of content, discovery and download from GetJar more compelling than ever. But it’s an another thing entirely to help competitors grow their business at our expense or that of our community.
Related research on GigaOM Pro (sub. req’d):