Sun may be distracted by the process of being acquired by Oracle, but it could still be moving more nimbly on the Java front as its software platform becomes the key to pushing the mobile internet experience into mass market phones and developing economies. If a Java-based platform is to fulfill the same role in the midmarket, that the fully blown operating systems do in the smartphone world, it needs a store, and finally Sun has come up with plans for one.
Since Java is the closest thing to a cross-platform system that the mobile world has – and can run on top of full OSs as well as underpinning embedded mobile OSs ‘ a Java App Store has the clear potential to be a unifying force for developers and consumers, and to dwarf the iPhone, Ovi and Android shops.
Sun hopes to drive new business via a Java App Store, wrote CEO Jonathan Schwartz in his blog this week. Sun estimates Java-based applications are already in use on over 4.5 billion computers, mobile phones and other gadgets. Although Schwartz appeared to be focusing mainly on PCs for the initial push into stores, the biggest potential clearly lies in the mobile platform, where Apple has achieved a billion downloads from an installed base of only 21 million iPhones.
Schwartz describes the boost to business and profile that comes from a formal storefront. “The revenues to Sun [from content distribution deals with firms like Google] were also getting big enough for us to think about building a more formal business around Java’s distribution power – to make it available to the entire Java community, not simply one or two search companies on yearly contracts.”
The store is currently codenamed Project Vector and aims to make Java applications easier to find and sell. Sun clearly aims to take the role of coordinating, marketing and vetting the store, though since the open sourcing of Java, it may be pushed towards a model closer to that of Android Marketplace, where Google takes a more hands-off approach than Apple or Nokia. More details of the project will be revealed at Sun’s JavaOne conference in San Francisco from June 2.
Meanwhile, the gold standard of mobile stores, App Store, has now captured 12% of the market, according to Strategy Analytics, since it opened on July 11. However, the revenue model does not satisfy all developers, and broad-based stores like Java will have even greater challenges in making it possible for programmers to cash in ‘ stores like RIM’s, which is focusing on fewer, higher priced apps may have greater appeal. Strategy Analytics’ report says: “The downside to this popularity is that with so many developers rushing on board, competition has become fierce and the majority of applications are downloaded for free, or at a very low cost.”
It is also unclear how much money the store makes for Apple itself, and the vendor makes no official statements on this ‘ and has only officially set itself the modest goal of breaking even. Another research note, from Jeremy Liew of Lightspeed Venture Partners, estimates that, after over one billion downloads (though many are free), Apple has cleared between $20 million and $45 million. He thinks the ratio of paid-for to free apps downloaded is between 1:15 and 1:40, which makes for a total of 25 million to 60 million purchases. The average price paid is $2.65, which would make the revenue total $70m to $160m, of which Apple takes 30%.
“Given that Apple sold 13.7 million iPhones in 2008, the App Store is not a meaningful direct contributor to their overall revenue,” Liew concludes. “Much like iTunes, Apple is using the App Store to drive demand for its hardware.”
In addition, Apple has revenue from sales of iPhone developer licenses ‘ about 50,000 have signed up, with individuals paying $99 and enterprises $299, which makes about $5 million overall.