App Store landscape moving toward segmentation and niche stores

GERMANY: The market for app stores is shifting. As the market for general, first-tier app stores is solidifying, niche stores are increasing, offering customers and publishers new opportunities.

2011 has become the year of targeting niche app user segments. The number of niche stores has doubled every year since 2009.

The growth of niche app stores reflects a shift in the market from a platform-driven service offering, to a more sophisticated customer segment-driven one. In the past, the priority for device owners was to look for stores, which provided apps that were compatible to their handheld devices.

As the number of apps has now dramatically expanded, customers face increasing difficulties in locating specific apps due to the volume of items within these stores. As a result, device owners are now looking for stores, which provide them with more streamlined, targeted app selections and results.

The growth of niche app stores – particular target group-oriented stores – has been partially fueled by back-end service providers. These service providers enable white label app stores for any company which would like to run its own app store and monetize, for example, the website’s traffic.

The market’s demand for easier search and discoverability of apps will have an impact on both publishers and app stores. For a great majority of publishers, niche plays – whether that is a dedicated space in a large app store or a stand-alone or aggregator store – present increased opportunities for exposure, hopefully leading to increased downloads. For app stores, the rise of niche alternatives indicates that search mechanisms and shelf space will need to increase in order to keep pace with the growth of apps.

Niche stores for mobile applications have existed in the market since the early 2000s. But they have only become relevant since Apple disrupted the market with their App Store.