Image source @ Visual China
Wen 丨 Wang Xinxi
A few days ago, according to consumer reports, there were consumer complaints, in the process of installing or using mobile phone applications, encountered applications downloaded by other channels intercepted by mobile phones, and diverted to the application stores that came with mobile phone manufacturers.
Among them, 8 mobile phones such as Xiaomi, OPPO, vivo, Huawei, Apple, Meizu, Meitu, and realme cannot search for 2 applications such as App Treasure and Pea Pod in their own app store.
From today's point of view, third-party app stores seem to be going through the historical downturn, under the siege of the integration of software and hardware of mobile phone manufacturers, some restrictions and interceptions on third-party app stores and other apps downloaded through third-party app stores have become a common phenomenon.
Third-party app store software and download channels have been replaced by the mobile phone manufacturer's own app store, and the third-party app store cannot be searched in the mobile phone manufacturer's own app store.
At present, the living space of third-party app stores is compressed, and both the size of the number of users and the growth rate have obviously slowed down.
In the past, the third-party app market has gone through a very brilliant stage.
From 2010 to 2013, Android smartphones were in a stage of rapid growth, and downloading Apps and flashing machines became the just needs of Android users at that time.
In the early years of Android mobile phones, users mainly through the application treasure or pea pod, 91 assistant, Android market and other three-party application stores to download software, the third-party application store market is considered to be the underlying traffic entrance of the mobile Internet, it is also the first entrance for users to reach the APP, with great imagination space.
Whether it is the revenue sharing for APP developers or based on obtaining user traffic, the revenue potential such as advertising revenue and application payment ranking is also very large, and once had the potential to become a mobile Internet giant.
91 Assistant, Android Market, 91 Desktop, Pea Pod and other applications became star companies at that time, and the capital market gave these third-party app stores a very high market valuation.
In 2011, Tencent launched The App Treasure, backed by Tencent's social user basic disk and massive traffic, the growth rate of the App Treasure is very fast, and within Tencent, the App Treasure was also a hot phenomenon-level star product.
With the demographic and traffic dividends obtained in the early stage of the mobile Internet, several major head app stores have grown rapidly.
In September 2012, the cumulative number of users of 91 Assistant reached 127 million, almost one-third of the basic disk of domestic smartphone users at that time, and thus became the head app store. In July 2013, the number of pea pod users reached 200 million.
In 2013, Baidu acquired 91 Wireless, a subsidiary of NetDragon Holdings, for US$1.9 billion, making it the largest acquisition of The Internet in China at the time.
This year is also the peak of third-party app stores.
At that time, many industry analysts were optimistic about Baidu's acquisition of 91 Wireless, believing that this was the real "money for time", and Baidu would establish the status of the king of application distribution. At that time, 360 also promoted the mobile assistant team to a higher strategic position than the mobile phone security guard.
The decline of third-party app stores The rise of mobile phone manufacturers comes with app stores
Around 2013 to 2014, whether it is relying on the community to make the 91, Jifeng, Dangle, or Focus on pre-installed channels of Anzhi, Android Market, Pea Pod. Or Tencent App Bao, 360, Kingsoft, etc., which rely on traffic advantages, all have an application distribution oligarchic dream, all trying to determine the winner and loser through their respective advantages and through the fight of the head, and determine the first entrance position of application distribution.
At that time, a large number of APP channel operators were paying attention to the development ideas and promotion strategies of these application markets, and timely followed up the APP channel operation and promotion ideas.
But what I didn't expect was that halfway out of a cheng bite gold, and mobile phone manufacturers stared at this cake.
At that time, from APP developers, channel promotion operators, to ordinary users, to Internet practitioners, industry analysts, etc., at that time, there were optimistic about the combination of 91 and Baidu Wireless, some optimistic about Tencent App Bao, and some optimistic about 360 mobile phone assistants, but almost no one would have thought that the future would dominate the application distribution pattern will be mobile phone manufacturers.
Based on the Android underlying system, domestic mobile phone manufacturers have their own custom systems, on the basis of the custom system, with the expansion of its user scale, around 2014, Huawei, Xiaomi, OPPO and other mobile phone manufacturers with their own application stores into the battlefield.
The reason for this is because mobile phone manufacturers have been fighting for many years at that time, hardware basically does not make money, and relying on software services to make money has become a common idea of big manufacturers. Apple's App Store revenue of more than $15 billion in 2014 indirectly stimulated the determination of domestic manufacturers to put the App Store in a strategic position.
From the data point of view, the domestic Android app store market in 2013 is still dominated by third-party app stores.
In 2014, xiaomi, Huawei, OPPO and other mobile phone manufacturers began to cut into the battlefield, and the proportion quickly reached about 21%.
By 2017, according to a data survey by penguin think tanks, in China, the most commonly used app stores used by users, mobile phone manufacturers' app stores (Xiaomi, Huawei and other app stores) have accounted for 56.2%. Exceeded the third-party app store.
According to the data, by the end of 2021, the total number of domestic apps reached 2.52 million, and the total number of app store distributions reached 2,107.2 billion times, and the distribution of app stores is a low-key gold mining business.
This point of domestic mobile phone manufacturers naturally see clearly. With the expansion of the market share of the head mobile phone manufacturers, the mobile phone manufacturers use the underlying system permissions and hardware dominance advantages, and the number of users in the self-contained application store naturally snowballs, and the stronger the stronger.
In the following years, the integration of 91 within Baidu failed, and 91 wireless gradually disappeared from public view. After Pea Pod was acquired by Ali for 200 million US dollars, it was also unable to resist the competition of mobile phone manufacturers and gradually marginalized.
In 2015, only tencent's app treasure and the hardcore alliance represented by mobile phone manufacturers entered the first echelon of third-party app stores.
After 2015, with the expansion of the market share of head mobile phone manufacturers, in addition to the decline in the overall share of third-party app stores, the new users of various channels have also stagnated, and even a downward trend has emerged.
At that time, some people in the industry lamented that at that time, many CPs (game developers) had obviously felt that the amount was getting smaller and smaller when they launched the channel.
The third-party app store landscape begins to turn from strong to weak at this point.
Huawei app market, Xiaomi app store, OPPO app store itself is attached to their respective mobile phone hardware, with the formation of Huami OV glory head pattern around 2016, the platform increased the attention and investment in the app store, users no longer need to download the app through the third-party app store, the user and APP developer of the third-party app store began to fall to the mobile phone manufacturer app store.
The sales of mobile phones of head mobile phone manufacturers are growing, and the number of users in the app store is also naturally growing, which has more discourse power, and they can plan more rule systems while improving the user experience, including Huawei, Xiaomi, OPPO and other mobile phone manufacturers through various operational strategies to continue to promote developers to join their own application market development.
Apple's 30% Apple tax on the App Store is well known to a wide range of users, and it has also encountered various antitrust lawsuits around the world. Even, the Open Market Act has been passed in the United States, which will require Apple and Google to allow software developers to use other payment systems on iOS and Android, and allow users to install third-party app stores.
But what users may not know is that the tax imposed by domestic manufacturers on APP developers is 50%. NetEase CEO Ding Lei admitted at the earnings conference last year that China's Android channel share is the most expensive in the world, up to 50%, and the ecology of this share is unhealthy, because it is about 20% more expensive than Apple.
Apple's App Store relies on a 30% cut-off business, supporting the rapid growth of its services revenue segment.
According to the Sensor Tower report, Apple's App Store generated $41.5 billion in revenue worldwide in the first half of 2021 alone. Taking the Fortune 500 ranking as an example, the App Store ranked 64th as early as 2019, ahead of Cisco and second only to Morgan Stanley.
Although the domestic mobile phone manufacturers' application stores cannot talk about Apple's revenue strength and scale, the mobile phone manufacturers have formed a relatively complete application market game sharing model through their respective customized systems and application store layouts.
In 2014, OPPO, vivo, Huawei and other mobile phone manufacturers jointly established a "hardcore alliance", which determined the game rules for game manufacturers to share 55%.
In addition, a large number of system pre-installed APP revenue, advertising revenue sharing, recommendation ranking, in-app search, etc. are derived based on its own customized system software + mobile phone hardware model.
For mobile phone manufacturers, the app store is a very important part of its revenue from building closed software services, and it is naturally reluctant to let third parties get involved.
As the user activity of mobile phone manufacturers grows, the attractiveness of application developers continues to increase, promoting more and more developers to participate, forming a closed loop from application distribution to software revenue and user stickiness. Today, the application market has been dominated by mobile phone manufacturers, and third-party app stores have been marginalized.
Why are third-party app stores powerless to compete with mobile phone manufacturers?
Software is dependent on hardware and exists. Why do some mobile phone manufacturers dare to isolate third-party app store software and download channels? The reason is that it can be easily replaced, and the migration cost for users is very low.
The survival logic and moat of software products are actually high migration costs and replacement costs. For example, the national software of Douyin, WeChat, Tmall, Baidu, and Meituan itself corresponds to the huge group of just-needed users in the entire Internet market, and there is no complete replacement product in the market for the time being.
This kind of national software products themselves have a large user scale, strong rigid demand, high migration costs, high stickiness, if the mobile phone manufacturers will block this product, will lead to a large number of user loss, therefore, mobile phone hardware manufacturers can not and do not have the ability to completely replace such products through their own software platform.
But on the other hand, if the software product itself does not form a huge basic disk of just-needed users, highly replaceable, and lack of moats, then it will often be defeated by the advantages of hardware entrances.
From the perspective of the app store market, as the head pattern of mobile APP solidifies, mini programs have sprung up, and users' interest in trying niche apps or game APPS has decreased, reflecting the activity of the app store market and the APP download rate has also begun to decrease.
In the process of development over the years, from the perspective of the development history of third-party app stores, although there are big data-driven intelligent recommendations, in-app search, content entrance and other gameplay, they have not established their own irreplaceability.
Although in the early stage, third-party application merchants have an advantage in the number of APPS, but for users, the commonly used APP is also between 10 and 30 models, for the commonly used APP, the major app stores are all you have and I have, which can basically meet the use of the vast majority of users.
For users, the number of long-tail apps does not constitute a core factor in user choice.
If you remember the 3Q war dispute, we will find that the "mutual pinching" and two choices between the "star products" of the two sides have triggered a wide range of industry controversies and user-level antipathy and discomfort, and have also triggered a wide range of heated discussions from all walks of life.
QQ was an indispensable and irreplaceable social software for PC users at that time. Compared with the rigidity of QQ, 360 occupies a relatively weak position, because at the level of security products, Kingsoft, Rising, Kaspersky and other past Internet security products can replace 360.
Therefore, in this big war, at that time, many users chose to uninstall 360 and keep QQ. But third-party app stores don't have this irreplaceability.
The mobile phone manufacturers' own app stores quietly replace third-party app stores, in fact, it has not caused large-scale user attention and public opinion controversy.
In the past many years, although consumers have complained about the interception and diversion of third-party app stores by mobile phones, the overall public opinion is very small, and most users have quietly accepted this arrangement.
The reason for this is that for a long time in the past, the third-party app store has not established its own moat and irreplaceability well, no matter in the application recommendation, download experience, security and other levels, the third-party app store relative to the mobile phone manufacturer's own app store, there is no obvious experience advantage, reflected to the user side, but also lack of strong and powerful product stickiness.
Mobile phone manufacturers in the hardware "natural monopoly" nature, the application store has also naturally become the software download entrance of mobile phone hardware products, based on the demand for profits, in their own application store to block the third-party application store has become the basic operation of some mobile phone manufacturers, third-party application stores due to the lack of hardware entrance, naturally all the way down.
However, although this model is suspected of monopoly and unfair competition, this monopoly is based on its own independent hardware products, and there is a precedent for Apple's App Store as the exclusive and only app download entrance for its own iPhone.
Apple's approach provides the perfect reason for mobile phone manufacturers to build a high wall of app stores.
In the past, Cook has emphasized that Apple's mission is to maximize user security and privacy, and according to Craig Federighi, Apple's senior vice president of software engineering, bypassing the App Store to install the app opens an unaudited Pandora's box full of malware.
In the past, although third-party app stores have brought users more diversified APP choices, they are lacking in security and privacy protection, and in the era when third-party app stores dominate (2011-2017), it is also an era of mobile phone viruses, malware and copycat APP flooding. (The following picture is a screenshot of Tencent Mobile Butler Security Report)
In that era, many third-party app stores usually introduced the security detection capabilities of Tencent Mobile Manager and 360 Mobile Guard, and in the process of application listing and installation, the application installation package was tested for security and the developer was authenticated, which was also the dividend era of mobile phone security software.
Therefore, Apple's reason for protecting user privacy and security is also valid for domestic mobile phone manufacturers - after all, the malware and mobile phone virus chaos in the third-party app store of the Android camp have not been well solved.
In 2021, Cook talked about why iOS only has one "App Store" in an interview, and he gave a set of data that the number of Android malware is 47 times that of iOS.
In the past, from Tencent Mobile Butler to 360's mobile phone virus security report, it has always been aimed at the Android mobile phone camp and excluded iOS, in the eyes of these security vendors, the iPhone APP download security is very high.
Therefore, domestic mobile phone manufacturers layout their own application stores, eliminate third-party application download sources, the banner of sacrifice is that the application store is part of the privacy permissions and security of the underlying hardware system, and mobile phone manufacturers need to ensure a unified and complete user experience and ensure the user's underlying privacy permissions and information security.
For example, Huawei's application market has previously announced that it has formed a comprehensive security and privacy protection system and basic framework through "developer real-name authentication, four-fold detection of proprietary applications, download and installation guarantees, and operation protection mechanisms".
Third-party app stores are short boards at the level of security detection capabilities, and in the case of the mainstream APP pattern settled, the marketing slogan of system-level privacy and security protection played by mobile phone manufacturers also easily entraps users.
In addition, from the perspective of the market share of mainstream manufacturers such as Huami OV, none of their respective app stores can occupy an absolute dominant position in the share, and each one is in a situation of equal strength, which makes it difficult for third-party application manufacturers to anti-monopolize.
However, the negative effects brought about by the exclusive competition of this mobile phone manufacturer with the app store can not be ignored, first of all, the developer chooses less, and the promotion and sharing costs to be borne become higher, which brings huge pressure to the revenue and profit of the app developer, and also affects the innovation investment of APP developers.
After all, the share of mobile phone manufacturers' app stores is as high as 50%, APP developers earn 10 yuan, and mobile phone manufacturers take 5 yuan. If the percentage is too high, the application developer is likely to increase the price of the virtual product purchased in the APP to share the revenue pressure based on the purpose of profitability, and the ultimate benefit is still damaged by the user.
The Apple App Store has suffered many lawsuits and anti-monopoly calls in the world for 30%, but the 50% of the domestic manufacturers have been intentionally or unintentionally ignored by the industry.
Therefore, for third-party app stores, offering the banner of anti-monopoly is supported by public opinion or one of the competitive strategies at the level of business ethics, but third-party app stores also need to think about how to strengthen their irreplaceability, followed by making a high degree of trust value in ensuring the security and regularity of the APP.
In addition, third-party app stores can consider obtaining support from developers and users based on the 50% high-share mechanism of mobile phone manufacturers and from the perspective of developers and users' interests, forcing mobile phone manufacturers to make changes in the sharing mechanism and competition strategy.
From today's point of view, after the integration of application distribution and the underlying layer of the mobile phone system, mobile phone manufacturers have more imagination space in user experience, application distribution and profit model, and further squeeze the living space of third-party application stores.
For third-party app stores, the top priority is not to expand revenue and market share, but how to survive under the strong competition of mobile phone manufacturers with their own app stores. At present, the situation is becoming less and less optimistic.
Time is running out for third-party app stores.