Does Intel's New App Store Pose Any Threat To Apple or Google?

Intel is launching its own app store to compete with Apple and Android. Intel powered devices will start shipping with Intel’s app store pre-installed on them in early 2011. Intel’s approach to apps is innovative. Consumer electronics retailers and manufacturers will both get a big cut of Intel’s app store revenue. Further, Intel app stores are white label – so consumers will see “Best Buy App Store – Powered by Intel AppUp”. Intel could be biggest trend in app markets in 2011.

Intel is the first real threat to Apple and Android that I’ve seen. I believe Intel could dominate the app markets because of its market power and its innovative approach to app stores.

Intel’s Market Power

Sheer Volume:

One million devices a day ship with Intel chips in them. Intel plans to leverage this footprint to make apps ubiquitous to consumers.

Developer Incentives:

Intel has the money to woo app developers. Successful app developers tell me that Intel is making it “worth their while” to port their apps over to the Intel platform.

Intel AppUp’s Innovative Approach to App Stores

24 Hour Trial Period:

Consumers will have 24 hours to try out the apps they buy. If they don’t like the app, they get a refund.

Real App Store Merchandising!:

Expert retailers will merchandise apps, not tech companies like Google and Apple. Imagine a scenario where apps don’t disappear into a vast sea of apps – as soon as they launch!.

Intel announced retailers partners Best Buy, Asus, Croma and Dixons this week. These global retailers will brand and merchandise the app stores that come pre-installed on devices sold at their stores. Further, retailers will select what apps to feature and how to promote them.

New App Store Economics?:

App developers will split revenue 70% / 30% with Intel. “70/30” is a de facto standard in industry. However, Intel may shake the market up.

Intel passes on most of its 30% to partners. Intel hopes this generous revenue share will create a new level of interest in apps on the part of retailers and device manufacturers.

(Note: Intel is primarily interested in selling chips; Apple doesn’t do revenue sharing; Google’s innovation is to share advertising revenue from Google’s own apps with cell phone makers).

Paid App Promotion!?!:

App promotion on the retail chain, geographic region and store levels are possible with Intel’s model.

Intel foresees a day when app developers share part of their 70% with retailers in order to gain better promotion of their apps.

Intel’s AppUp Program

Intel launched the beta of “AppUp”, its app store program, earlier this year. Intel has an AppUp client download available to consumers on its web site. App developers contributed apps running on either Adobe AIR or C++/Windows technology to the store. AppUp currently only supports the Windows 7 and XP operating systems.

Intel is starting its AppUp program with netbooks. The Intel app store will come preinstalled on Intel powered netbooks, and then be extended to tablets, handheld devices and laptops.

Why Intel is Serious About Apps

Intel must succeed in the app market to stay a global leader. Intel is on the wrong side of the app craze, because iPads, iPones and Android smart phones are not powered by Intel chips (tablets and smart phones use a different processor technology called “ARM”).

Intel is in danger of become “just a PC chip company” in consumer markets. Intel is betting that a successful, ubiquitous Intel app store will take momentum away from Apple and Google in the handheld device markets.

Watch for Intel to become a major player in the apps market by this time next year.