The global penetration of smartphones in the world has grown to over 45.04% in 2020. There are over 3.5 billion users of smartphones out of 7.7 billion people in the world. A smartphone wouldn’t be so-called if it cannot download apps for use. Hence, this increase is directly affecting the rise in downloads and, actually, the increase of OEM results in more app stores… that translates in more app downloads.
Depending on the regions, many would think that there are just two app stores. However, there are more than 400 third party apps stores in the world of smartphones. According to Statista, mobile app spending was recorded at $120 billion in 2019. It is also essential to know that these numbers are set to increase exponentially in emerging markets like China and India.
As this rise occurs, OEMs are deliberately pitching their sales into the app economy growth. They are gradually meeting their users’ demands and this involves not only equipment but also app distribution. And that’s why OEMs such as Huawei and Samsung have made great investments in their own app stores.
If we have a look at the definition of app economy provided by the Techopedia, -the range of economic activity surrounding mobile applications- we can agree that actually, equipment manufacturing is directly related to the app economy. Apps would be able to actually exists without a platform where they can run. The app economy is booming and has been predicted to have a record of 14 million mobile developers in 2020. According to AppAnnie’s report, it has been predicted to be valued at $6.3 trillion in 2021.
What is the Effect of OEM’s App Stores in the App Economy?
The impact of OEMs (Original Equipment Manufacturers) in the app economy cannot be downplayed. They play a logical role in when, why, and how mobile devices are used.
Most OEMs have their own devices and pre-installed apps on them. They also determine the apps that could be downloaded by the users of their devices. Most users of mobile devices are very selective when it comes to the download and usage of apps.
However, with the upgrade that the smartphone industry is going through, OEMs are learning to understand the app market and the choices of their actual users and prospective users. Therefore, they are delivering their apps literally to their buyers.
Some of these top OEMs include Huawei, Oppo, Xiaomi, Vivo, and so on. However, they are of the most substantial influence in China since that’s their primary font.
OEMs are gradually creating a significant impact, and the smart app developers are also getting into the market. They appear to offer higher margins for monetization than the popular app stores. They also have some other advantages;
Most OEM app stores, as the majority of third-party app stores, want developers. They are pushing hard to gain developers’ trust and to become their primary platform for app distributors. And this is only for one reason: app store’s existence is only based on content. They need content and that’s why they’ll fight to get your app in their catalog. That said, OEM app stores will offer you special deals to feature your app or even to attract users to your app. One good example of this high visibility is what Galaxy Store (from Samsung) did to promote the latest racing game from Microsoft, Forza Street, on which users can get access to a special car in the game when downloading the game form the Galaxy Store.
As with app visibility, OEM app stores will offer enhanced conditions on app monetization. Catappult, for example, offers the best revenue share in the market: 75% of every in-app purchase. This way, app stores gain more content and the developer witnesses an improvement to their distribution terms.
OEMs and the Chinese Market
Smartphones like Huawei, Xiaomi, Oppo, and Vivo, are the most sold in China while sitting at third to sixth positions in the world. Each one of these OEMs has its own app store. Moreover, they actually have a significant presence in Asian markets like China. This is mainly caused by the fact that Google Play cannot operate in the giant Asian country.
OEM app stores seem as though there’s not much to gain from them. However, this is untrue as when combining the traction of all these OEM app stores altogether, you can actually reach an incredible amount of users in several markets, mainly Asian ones.
OEMs will eventually become competitive as they will possibly pitch their tent in Asia and Africa, where there is an emerging record of the fastest- growing mobile app markets.