What a short, strange trip it's been. Apple's (NASDAQ:AAPL) App Store has shattered the 10 billion application download milestone, and what's most impressive isn't the sheer volume of apps consumed by iPhone, iPod touch and iPad users--it's that Apple reached the 10 billion download benchmark in only about 30 months' time, in the process revolutionizing how mobile software is distributed, purchased and consumed. The App Store now looms so large over the mobile industry that it's easy to forget the digital marketplace didn't even open for business until July 11, 2008--at that time, it featured just 552 iPhone applications, and today, the total tops 325,000, with developers submitting more than 1,000 new apps each week. And with Apple selling 16.24 million iPhones and 7.33 million iPads in its fiscal first quarter alone--not to mention the iPhone expanding to Verizon Wireless and its 93 million U.S. subscribers next month--the iOS platform is just getting started.
But the App Store's brief run hasn't been without controversy and turmoil. In the two-plus years since the store launched, Apple has alienated dozens of developers by purging their apps, often without warning or explanation--it's also skirmished with Google (NASDAQ:GOOG), waged war on Adobe Systems and run afoul of the Federal Communications Commission. Although the history of the App Store is still being written, the 10 billionth download seems like the perfect occasion to revisit the key events and turning points that led to this moment. Join FierceDeveloper as we stroll down short-term memory lane to trace the evolution of the App Store--and be sure to stick around for the next 10 billion.
July 2008: Launched in conjunction with the U.S. retail debut of the iPhone 3G, the App Store opens July 11 with roughly 550 applications including educational programs, mobile commerce and business productivity tools--games represent about a third of first-wave apps, and will continue to dominate all categories for close to two years. Consumers download more than 10 million iPhone applications in the App Store's first three days and 60 million in the first month, a $21 million windfall for Apple's developer partners--no less impressive or portentous, the App Store grows to 800 applications by the close of its first week, hinting at the enormous growth still to follow.
Also a harbinger of things to come: Developers begin grumbling about the App Store. Initial frustrations have much to do with the length of time it requires Apple to push app software updates to iPhone users--in addition, some developers cite Apple's failure to communicate information on when their apps will be published live. Moreover, Apple has yet to provide App Store sales data, so developers are unsure how their iPhone applications are faring--Apple pledges to share monthly sales reports, but some developers call for real-time statistics in order to gauge sales and adjust prices accordingly.
Sept. 2008: A mere two months after opening its virtual doors, the App Store reaches the 100 million download milestone. According to Apple, there are already over 3,000 mobile applications available in the store--90 percent are priced at less than $10, and more than 600 are free.
The App Store reaches the 200 million download benchmark roughly a month later, just over 100 days after launch. "The 200 millionth app! We've never seen anything like this in our careers," proclaims Apple CEO Steve Jobs during the computing giant's fourth-quarter 2008 earnings call, adding that the rate of applications submitted by developers is "incredible." The App Store spans applications in 19 categories, including Games, Navigation and Music.
All-Time Top Paid iPhone Apps
All-Time Top Free iPhone Apps
All-Time Top Paid iPad Apps
All-Time Top Free iPad Apps
Dec. 2008: As the year draws to a close, iPhone owners have downloaded more than 300 million mobile applications, with the total number of apps available via the App Store topping the 10,000 mark. According to Apple, the most downloaded premium apps during the store's first six months of business include its own Texas Hold ‘Em, Freeverse's Moto Chaser, Vivendi Games Mobile's Crash Bandicoot Nitro Kart 3D, Sega's Super Monkey Ball, Pangea Software's Cro-Mag Rally and Enigmo, the Blimp Pilots' Koi Pond, Shinya Kasatani's PocketGuitar, Retronyms' Recorder and Hottrix's iBeer.
As for the most popular free iPhone applications of 2008, the list includes two social networking apps--Facebook and AOL's AIM--as well as two travel apps, Google Earth and Urbanspoon. The list also features a pair of entertainment apps, Apple's Remote and The MacBox's Lightsaber Unlimited, along with two music apps, Pandora Radio and Shazam. And, of course, there are games--specifically, Tapulous' Tap Tap Revenge and Codify AB's Labyrinth Lite Edition.
April 2009: Apple crosses the 1 billion application download threshold, flipping the switch on its App Store countdown webpage to a screen reading "Thanks a billion. Over 1 billion downloads in just nine months." Research firm mobileSQUARED reports that users are downloading about 5.1 million applications per day on average, while rival researcher Compete suggests that 17 percent of iPhone owners have downloaded more than 31 applications from the App Store--10 percent have downloaded between 21 and 30 apps, 18 percent have downloaded between 16 and 20 apps, 15 percent have downloaded between 11 and 15 apps, and 22 percent have downloaded between six and 10 apps. On the other hand, 15 percent of iPhone owners have downloaded between one and five applications, and 3 percent have not downloaded any apps at all.
July 2009: As the App Store reaches its first birthday, Apple celebrates the occasion by announcing that consumers downloaded more than 1.5 billion iPhone and iPod touch applications over the previous 12 months. A year into its existence, the App Store offers in excess of 65,000 total applications, and membership in the iPhone Developer Program tops 100,000. In late January, Apple stated the number of available applications exceeded 15,000, meaning that developers added roughly 50,000 new apps in less than six months.
Sept. 2009: App Store downloads exceed 2 billion, with consumers downloading half a billion apps in Apple's fiscal third quarter alone. Apple adds that there are now over 85,000 applications in the App Store and more than 125,000 developers in its iPhone Developer Program. More than 50 million iPhone and iPod touch customers in 77 countries are downloading applications in 20 categories, including games, business, news, sports, health, reference and travel.
iPhone users are downloading an average of 65 applications per device, spending an average of $80 each to purchase premium App Store downloads, according to research issued by app sharing and recommendation solution AppsFire. After surveying 1,200 users in the U.S., U.K., Japan and France in July and August of 2009, AppsFire reports that the average price of a paid App Store application is now $2.87--with free apps factored into the equation, the average price of each App Store download drops to $1.56. Ninety-nine cents remains the most popular price for premium apps--nevertheless, AppsFire notes that 65 percent of all installed iPhone apps are free.
Nov. 2009: The App Store passes the 100,000 iPhone and iPod touch application benchmark, with Apple adding that consumers in 77 countries have now downloaded well over two billion applications in 20 categories including games, business, news, sports, health, reference and travel. About 30 percent of all downloads--approximately 610 million--fall into the premium app category, translating to total developer revenues of $900 million, according to data issued by iPhone analytics firm Pinch Media. Paid apps make up about 77 percent of the App Store's total available applications. The firm's research indicates that premium apps average 9,300 downloads, while free apps average 71,000 downloads.
Consumers are downloading more than 100 million iPhone and iPod touch applications each month according to data issued by mobile advertising network Millennial Media and mobile ad exchange Mobclix. The iPhone platform generates more than five times the number of downloads as Google's Android operating system (20 million application downloads per month) and virtually obliterates Research In Motion's BlackBerry OS (300,000 downloads per month). Apple users are averaging 11 application downloads per month, approximately three times the number downloaded by Android users and six times the BlackBerry user average.
In its response to the Federal Communications Commission's inquiry into its decision to remove a pair of third-party Google Voice applications from its App Store, additionally rejecting Google's own VoIP client, Apple reveals that the storefront receives about 8,500 new iPhone and iPod touch application submissions and updates each week, distributed among 40 full-time, trained reviewers--Apple contends that roughly 95 percent of all apps are approved within 14 days of submission, and only about 20 percent are not approved as originally submitted. A growing and increasingly vocal segment of the iPhone developer population nevertheless demands greater transparency into the App Store's mysterious and capricious approval process, prompting Apple senior vice president for worldwide product marketing, Phil Schiller, to finally open up. According to Schiller, Apple's review protocol is comparable to any other retailer desiring to make certain the products on its shelves function as advertised: "We review the applications to make sure they work as the customers expect them to work when they download them," he says. "We've built a store for the most part that people can trust. You and your family and friends can download applications from the store, and for the most part they do what you'd expect, and they get onto your phone, and you get billed appropriately, and it all just works."
The problem, Schiller says, is that with so many new application submissions coming into the App Store each week, unexpected wrinkles and complexities continue to surface. He says most application submissions are approved, and some are sent back to the developer for tweaks--technical snafus and software bugs account for most of Apple's requested changes, but content is the culprit about 10 percent of the time. "There have been applications submitted for approval that will steal personal data, or which are intended to help the user break the law, or which contain inappropriate content," Schiller says. Moreover, about 1 percent of apps fall into gray areas Apple did not previously anticipate--e.g., apps developed to help gamblers cheat at casinos. Trademark violations (including unauthorized use of Apple's own trademarks) are another ongoing concern: "If you don't defend your trademarks, in the end you end up not owning them," Schiller says. "And sometimes other companies come to us saying they've seen their trademarks used in apps without permission. We see that a lot."
Jan. 2010: App Store downloads exceed 3 billion, roughly three months after hitting the 2 billion benchmark. "Three billion applications downloaded in less than 18 months--this is like nothing we've ever seen before," Apple CEO Steve Jobs says in a prepared statement.
App Store downloads increased by 51 percent in December 2009 compared to November totals, according to data issued by mobile application analytics provider Flurry. Application downloads via iPod touch devices eclipsed iPhone downloads by 172 percent on Christmas Day 2009, with total iPod touch download volumes growing by nearly 1,000 percent on Dec. 25 compared with the average of all previous Fridays during the month. Flurry speculates that in addition to new iPod touch 3G models received as gifts, iTunes gift cards also drove downloads across earlier generation iPod touch devices. In addition, iPod touch download volumes topped iPhone downloads by 104 percent on Dec. 26.
Feb. 2010: Responding to requests from both consumers and developers alike, Apple removes an unspecified number of adult-themed iPhone and iPod touch applications from the App Store. Apple explains to developers that a flurry of consumer complaints prompted its decision to revise policies regarding mature content: "Whenever we receive customer complaints about objectionable content we review them," an Apple spokesperson writes in an e-mailed statement. "If we find these apps contain inappropriate material we remove them and request the developer make any necessary changes in order to be distributed by Apple."
Developers contend that sexually themed software represents as much as a third of the App Store's 140,000-plus applications. Developers argue that the proliferation of adult apps hampers discoverability of rival applications, and some have reported the problem as a bug in hopes of attracting Apple's undivided attention on the issue. Some developers also lobby for the creation of a so-called "red light district" for applications that contain overtly sexual content.
March 2010: Books surpass games in the App Store, marking the first time the games category has failed to dominate total iPhone and iPod touch applications, according to data issued by mobile advertising exchange Mobclix. The App Store boasts more than 26,500 books, representing 18.6 percent of the total 142,000 available applications--the storefront features a little over 25,000 games, or 17.6 percent of all apps. Mobclix adds that entertainment applications trail in a distant third at 11.9 percent of all iPhone apps, followed by education (6.8 percent) and utilities (5.5 percent).
As of late 2009, books accounted for one out of every five new iPhone and iPod touch apps according to in-application analytics provider Flurry. After games led all iPhone app development categories between August 2008 and August 2009, books first usurped the top position in September 2009--around that time, 1 percent of the entire U.S. population was reading a book on the iPhone.
April 2010: Coinciding with the release of the iPhone OS 4.0 software development kit, Apple rewrites its iPhone developer agreement to mandate that all App Store submissions must be written to run directly on the iPhone platform, effectively banning cross-compiler translation tools like Adobe's Flash Professional CS5. The implications are clear: Apple is lowering the boom on Flash once and for all, prohibiting developers from converting their Flash-based scripts into native iPhone applications. (Roughly six months after instituting the cross-compiler ban, Apple reverses course, easing restrictions on the creation of iOS-based applications. "We are relaxing all restrictions on the development tools used to create iOS apps, as long as the resulting apps do not download any code," Apple says in a statement. "This should give developers the flexibility they want, while preserving the security we need." The changes enable developers to design and build apps in Flash, then convert their efforts to Apple-approved code--the revisions do not mean consumers will be able to access Flash-based Web content via their iPhone and iPod devices, however.)
As April draws to a close, sales of Apple's new iPad tablet surpass the 1 million benchmark, four weeks after the device first went on sale in the U.S. and less than half of the 74 days required to sell the first million iPhone units. Consumers have downloaded more than 12 million iPad applications from the App Store, as well over 1.5 million ebook titles from the new iBookstore. Apple notes that developers have created over 5,000 new applications expressly for the iPad--the device also runs almost all of the App Store's 200,000-plus applications for the iPhone and iPod touch.
According to data compiled by app store analytics firm Distimo, Games represents the dominant iPad app category out of the gate, making up 32 percent of available app, followed by Entertainment and Books. Distimo reports that 80 percent of all iPad applications fall into the Paid Apps segment--by comparison, 73 percent of iPhone and iPod touch applications carry premium price tags. The average iPad app costs $4.67, as opposed to $3.82 on iPhone. Medical apps for iPad lead the way at an average price of $42.11, followed by Finance apps at $18.48. On the iPhone, Medical apps average $10.74, and Finance apps average $5.74.
June 2010: Free applications represent 81 percent of App Store downloads across the iOS platform according to data released by Piper Jaffray analyst Gene Munster. Piper Jaffray research indicates that free apps account for about 4 billion total App Store downloads--iPhone, iPod touch and iPad users are downloading over 16.6 million applications each day, almost double the 8.9 million daily downloads via Apple's iTunes multimedia storefront. Munster adds that average selling price among the top 50 premium App Store applications for iPhone and iPod touch is $1.49--among the top 30 paid iPad apps, the average price jumps to $4.66.
Earlier in the month, Apple stated developers have now earned more than $1 billion in App Store revenues. Munster believes that Apple's own App Store earnings equate to $428 million since the marketplace opened, explaining that while Apple claims a 30 percent cut of all downloads, it must give 20 cents plus 2 percent to the credit card company and 1 percent per app for processing, working out to $189 million in gross profit on paid apps. "This does not factor in the roughly $81m Apple has spent since launch to deliver the 4b free apps that have been downloaded," Munster adds. Assuming the figure is correct, $189 million represents just 1 percent of Apple's $33.7 billion in gross profit earned since the App Store opened.
Aug. 2010: A new App Store section is created to spotlight free, so-called "lite" versions of close to 100 iPhone and iPod touch applications, encouraging consumers to 'Try Before You Buy.' The new App Store section is essentially an organizational update, bringing together lite versions of popular iPhone games and navigation solutions in one dedicated spot--Apple does not introduce any new application trial features or related tweaks, despite continued calls from developers and consumers to add a 24-hour app return policy similar to the one offered in Google's rival Android Market.
Weeks later, Apple continues building out the App Store with the addition of On the Grid, a new section spotlighting iPhone and iPod applications from the burgeoning location-based solutions category. On the Grid features just a dozen apps at launch, including customer favorites like Facebook, foursquare, Twitter and Gowalla.
Sept. 2010: As Apple formally announces iOS 4.1, CEO Steve Jobs states the company has shipped 120 million iOS devices and activates 230,000 new devices every day. The App Store offers consumers their choice of more than 250,000 applications, and downloads from the digital storefront total 6.5 billion.
Days later, Apple finally publishes its App Store Review Guidelines, providing developers with rules and examples across a series of iOS software subjects like user interface design, functionality, content and technology restrictions. The guidelines are so direct and blunt you can't help but wonder whether Jobs typed them up himself: Highlights include "We have over 250,000 apps in the App Store. We don't need any more Fart apps," "If your app doesn't do something useful or provide some form of lasting entertainment, it may not be accepted" and "If your App looks like it was cobbled together in a few days, or you're trying to get your first practice App into the store to impress your friends, please brace yourself for rejection. We have lots of serious developers who don't want their quality Apps to be surrounded by amateur hour."
Other shoot-to-kill offenses, according to the App Store Review Guidelines: Apps that create alternate desktop/home screen environments or simulate multi-app widget experiences; apps that alter the functions of standard switches (e.g., Volume Up/Down and Ring/Silent switches); submissions that duplicate apps already for sale in the App Store, particularly if there are many of them; and apps deemed "defamatory, offensive, mean-spirited, or likely to place the targeted individual or group in harm's way." The App Store Review Guidelines also address the inherent subjectivity of the approval process--long story short, if you think your app is likely to run into trouble, it probably will. "We will reject Apps for any content or behavior that we believe is over the line," Apple states. "What line, you ask? Well, as a Supreme Court Justice once said, 'I'll know it when I see it.' And we think that you will also know it when you cross it."
Oct. 2010: The App Store surpasses 300,000 iOS applications, with CEO Steve Jobs touting the growth as a significant competitive advantage in the company's battle with Google and Research In Motion. "With 300,000 apps on Apple's App Store, RIM has a high mountain ahead of them to climb," Jobs says during a surprise appearance on Apple's quarterly earnings call. "Well, what about Google? Last week, [Google CEO] Eric Schmidt reiterated that they are activating 200,000 Android devices per day. And have around 90,000 apps in their app store. For comparison, Apple has activated around 275,000 iOS devices per day on average for the past 30 days with a peak of almost 300,000 iOS devices per day on a few of those days."
Jobs adds that the App Store now offers more than 35,000 applications optimized expressly for Apple's iPad tablet, which he cited as one of several advantages boosting the device in the face of competition from a wave of rival units. "This new crop of tablets will have near zero [apps]," Jobs says, contending "We think the current crop of seven-inch tablets are going to be DOA--dead on arrival."
Nov. 2010: Apple unveils the App Store's new Essentials Hall of Fame section, spotlighting 50 iOS applications the computing giant dubs "the best of the best." The Hall of Fame entrants span from Angry Birds to Zen Bound 2 Universal, encompassing games, productivity tools, business solutions and entertainment--roughly a quarter of the selections fall into the Free Apps category, with the Paid Apps ranging in price from 99 cents to $19.99 (for the Golfscape GPS Rangefinder). It is unknown what criteria Apple employed to enshrine the Hall of Fame applications, although the presence of many longtime bestsellers indicates download totals played a significant role in the process.
The Essentials Hall of Fame represents Apple's another attempt to address some of the content discovery issues that have plagued the App Store as the marketplace has grown. In addition to the Hall of Fame, the Essentials section presents recommended applications bundled together under themes like Apps Starter Kit, Busy Parents, Personal Assistant, Get In Shape and Music Discovery. In October, Apple CEO Steve Jobs trumpeted the App Store's integrated user experience and called it "the easiest-to-use, largest app store in the world, preloaded on every iPhone. Apple's App Store has over three times as many apps as Google's marketplace and offers developers one-stop shopping to get their apps to market easily and to get paid swiftly."
Jan. 2011: With the App Store rapidly approaching the 10 billion milestone, Apple posts record revenues in its fiscal first quarter, bolstered by its iTunes digital media storefront as well as booming sales of iPhone and iPad devices. The iTunes Store generates revenues of $1.1 billion, with Apple CFO Peter Oppenheimer citing strong music, video and iOS application sales.
"We have the highest customer [satisfaction] ratings in the industry versus Android or [Research In Motion] or any--we have the largest App Store with over 300,000 apps," says Apple COO Timothy Cook. "We have now sold over 160 million iOS devices. And I mean, this is huge. And we fundamentally believe that our integrated approach delivers a far superior customer experience than the fragmented approach. And you can see this in a variety of ways from the fragmentation of the number of app stores out there that people are going to pull their hair out, because they're going to have a variety of updating methodologies, and a variety of payment methods, and slightly different derivatives."