When Pocketgear changed course recently and announced it was going to be a white-label app store provider for other companies called Appia, I said we should be prepared for an app store onslaught. Well, it appear it may be starting now with Opera opening the Mobile App, a web storefront where 100 million Opera browser users will be able to buy apps.
Opera said the store will be a Speed Dial link in the Opera Mini and Opera Mobile browsers and will offer apps for Android, Symbian, BlackBerry and Java. The number of apps available will vary according to the end device, with the store only presenting apps that work on that phone. Users will get a tailored store experience that includes local language and currency support, too. By leveraging Appia, Opera will have the ability to offer some 140,000 Appia apps on various platforms and will be able to boast its own store with minimal effort.
As I said earlier, the app market is booming with some projecting off-deck app markets eclipsing native app stores in revenue by next year. Forrester Research recently turned heads by predicting the mobile app market will be worth $38 billion by 2015. That’s a staggering sum, considering Apple’s App Store has generated a little less than $3 billion since it opened in July of 2008, with developers taking $2 billion so far. But it shows there’s a lot of optimism in app stores.
Opera is clearly angling to get a piece of the pie by extending beyond simply providing a mobile browser to being a purveyor of content. It’s hoping to leverage its existing reach in 200 countries, which gives it a leg up in competing for eyeballs. Opera said a pre-launch of the Opera Mobile Store in February attracted more than 15 million users, who racked up more than 700,000 downloads per day.
With everyone rushing to create app stores, I don’t know if anyone but a handful will get the kind of traffic needed to be really successful. The ones that simply resell and don’t create much value for developers or consumers may not see much success. Opera is trying to build relationships with developers through the Opera Publisher Portal, which is meant to make it easy for developers to upload their apps. But unless developers see a lot of money-making opportunities to warrant supporting additional stores, many will concentrate on the destinations that command attention and are willing to promote and market their apps, not just try to make some money off of them. And unless consumers of these stores get exclusive apps, better security, improved discovery or cheaper pricing, I’m not sure many will spend a lot of time in these markets. It’s not proving easy to make a store. The challenge now is ensuring its equipped to compete.
Related research on GigaOM Pro (sub. req’d):
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With the rapid pace of events on the web and the information revolution sparked by the Internet, it’s very easy for the technology industry to think it’s unique: constantly breaking new ground and doing things that nobody has ever done before.
But there are other sorts of business that have already undergone some of the same radical shifts, and have just as great a stake in the future.
Take healthcare, for instance.
We often think of it as a huge, lumbering beast, but in truth, medicine has undergone a series of revolutions in the past 200 years that are at least equal to those we see in technology and information.
The first stirrings of modern chemistry and biology were only just beginning in the 19th century, but by 1967, Christiaan Barnard started transplanting hearts. Similarly, it was only in the 1950s Watson and Crick discovered DNA. Less than 50 years later, the first draft of the human genome was produced. If that’s not rapid, world-shattering change, then what is?
Pharma has also faced other challenges the web industry is only now starting to realize. Products are slow to make, and drugs can take years to design, test and manufacture. Accordingly, R&D spending in pharmaceuticals is very high overall; according to the European Union (PDF), five of the world’s top 10 companies by R&D spend are in drugs or biotechnology (among traditional technology companies, only Microsoft, Nokia and Samsung feature in the list). And it’s a far greater proportion of total turnover (Pfizer spends around one seventh of revenues on research, Apple spends around one dollar on R&D for every 13 it brings in).
And where the planet’s electronics giants spend billions attempting to end piracy and patent infringement, pharmaceutical companies are rapidly adjusting to the fact that they only get 12 years before patent protection ends and other companies can introduce generic drugs. Imagine a situation where Windows 98 was already old enough to be forcibly open-sourced, and you get the idea of how disruptive that might be.
So, what does the pharmaceutical industry have to teach us?
First, be careful. Your property and ideas won’t be yours for long.
Second, while new discoveries are important, revolutions can be reliably predicted, most of the time. From the outside, Barnard’s transplants were a radical shift in surgery. From inside the profession, it was the next obvious step after previous organ transplants.
Third, the way money is being spent will inevitably change. It’s already happening: an issue addressed by the latest VC bulletin from Go4Venture, a London-based advisory group for European entrepreneurs and investors (you can sign up here). Their latest dispatch outlines the state of deal-making in Europe (more of them, but less valuable, as reflected in figures we wrote about last month), and they also point out Europe’s technology financing system is undergoing a significant shift:
[there is a] major structural change in European venture capital financing where corporates will play a more prominent role going forward. Corporates are facing a lasting ex-growth market environment (courtesy of debt-laden Western economies) and realise that internal R&D is rather expensive and just cannot cover the whole front of innovation.
For corporates, investing in start-ups has the added advantage of encouraging a more entrepreneurial culture inside and creating a stream of acquisition opportunities.
Pharma has been there before, in an early move precipitated by proprietary drugs coming off patent, and we are now seeing the pharma model spreading to other IP-driven sectors.
Spending more of the R&D budget on other companies doesn’t just mean acquisition, of course — although the startup world is very familiar with the process and it’s clearly the most common option. Just yesterday, Google spent $60 million making the slightly odd move to buy British price comparison website BeatThatQuote. It could also mean more early investment in small companies, like the $100,000 Microsoft is putting into Moscow-based anti-piracy startup Pirate Pay.
But what it does mean is, ultimately, the growth in the number of deals we’re seeing is going to get faster, and there will be more opportunities for innovative startups and smart entrepreneurs. Twinned with the aggressive, high valuation investing strategy of a company like Russia’s Digital Sky Technologies, it seems more likely than not we’ll see things explode, in Europe and elsewhere, over the next year or two.
Related content from GigaOM Pro (subscription req’d):
- A 2011 NewNet Forecast
- A 2011 Mobile Forecast
- A 2011 Connected Consumer Forecast
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