Parks Associates Blog

Friday, February 26, 2010

Pocketgear-ing up to take on Apple, Acquires Handango

The cross-platform app market just got smaller…and yet bigger at the same time. This week Pocketgear announced its acquisition of Handango, a leading competitor in the direct to consumer, cross-platform app market. The acquisition and merger of the two will bring the unified company into closer competitive range with the market leader Apple App Store. It will also serve to make the company a more appetizing choice for mobile carriers and device manufacturers preferring to outsource app development and storefront management rather than take on those responsibilities themselves.

Mobile applications have emerged as an ever increasingly important driver in smartphone adoption. Whether they are useful for business, health, travel or just killing time apps add to the value of smartphone ownership. Having the latest, coolest, most consumer sought after app available to your subscriber base or potential handset buyer is becoming an important market differentiator. In this regard Apple has charged ahead of the competition, having reached over 2 billion app downloads from its online store as of 3Q 2009, a symbiotic uptake which, in turn, is helping to drive sales of its iPhone and other devices.

But, with the acquisition of Handango, Pocketgear is positioning itself to offer a greater challenge to Apple in the retail app market. As a cross – platform app retailer, Pocketgear/Handango -which, combined, offers more than 140,000 applications and has generated more than $400m in app revenues to date – has the advantage of a larger potential handset customer pool; a pool which includes the Blackberry Curve, the device that outsold the Apple iPhone in 1H 2009. Pocketgear/Handango also offers a more open developer environment than Apple which has been accused at times of being too restrictive in its approval of new apps for its mobile devices. However, even with all the potential market advantages bestowed by its acquisition of Handango, Pocketgear still must face the uphill battle of competing with Apple in the arena where it holds the greatest advantage – user experience.

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