Eye on M-Commerce: Apple’s App Store Traffic Hits 1.5 Billion Downloads

While experts debate when mobile commerce will hit its stride, Apple Inc. announced on Tuesday that its App Store, which it set up just one year ago, has downloaded more than 1.5 billion applications for the company's hugely popular iPhone handset. The App Store had just hit the 1 billion mark in April, which means the pace at which iPhone users are tapping the online store is quickening. Many iPhone apps are free, but many others carry price tags ranging from micropayments to $20 and up. Among them are apps developers have written specifically for the iPhone to enable forms of mobile payment, including apps from such players as Intuit Inc. and transaction-gateway provider Charge Anywhere to let mobile merchants process card transactions on their devices (Digital Transactions News, May 21). Mobile banking also accounts for a good many app downloads. The most-downloaded free app in the finance category is a mobile-banking program from Bank of America Corp., which reported earlier this year that iPhone users account for 41% of its 2 million mobile-banking customers. Apple also announced on Tuesday that its store now features more than 65,000 applications, up from more than 15,000 in January, while the iPhone Developer Program has enrolled more than 100,000 software developers. Apple's success with the App Store has not gone unnoticed. Research in Motion Inc., maker of the Blackberry line of smart phones, has introduced an online application emporium of its own, as has handset rival Nokia. Payments on RIM's store are being processed by PayPal Inc. But such competition doesn't seem to faze the Cupertino, Calif.-based computing giant. In a statement released to mark the occasion of reaching 1.5 billion downloads, Apple chief executive Steve Jobs said rivals have a long way to go. “The App Store is like nothing the industry has ever seen before in both scale and quality,” he said. “It's going to be very hard for others to catch up.” Traffic on sites such as the App Store, coupled with the rapid proliferation of smart phones, or handsets that function as handheld computers, is helping drive the development of mobile commerce, according to Mercator Advisory Group. The Maynard, Mass.-based firm says payments from remote devices like smart phones will grow from $389 million in 2009 to $8.6 billion in 2014, thanks largely to merchants wanting to get in on the action that has sprung up around app stores (Digital Transactions News, Dec. 24, 2008). Apple says it has shipped more than 40 million iPhones and iPod Touch gadgets, the devices for which products on the App Store are written.