App stores abound these days: Apple’s well-known effort has been joined by BlackBerry’s App World, and more recently, Nokia’s Ovi Store, while pretty much every operator, handset vendor and used-car dealer has said they’re going to set up their own shop. A lot of this is based on the huge number of downloads by iPhone users, and the misperception that all those downloads equal easy riches.
Granted, the revenue path is better in the Apple store than others (assuming you can get your app approved by the great gatekeeper), but it remains that fewer developers are really raking it in than many people would believe.
This is largely because although Apple, and to some extent, the other players, have solved the distribution issue, but they haven’t cracked the discovery nut. Maybe browsing is a little easier on the iPhone, with its large display and easy scrolling, but that’s not exactly a solution. Browsing in the Ovi Store was so bad that I haven’t been back since I played with it at launch. And the problem of “Top Downloads” and “Most Popular” lists remains exactly the same: once apps get on those lists, it’s difficult to get them off.
It’s important for developers to realize/remember/remind themselves that app stores are just distribution channels — not marketing strategies. It’s no different than any other product scenario: getting that product in a distribution channel alone isn’t enough to generate and drive sales. People see stories like the guy who’s made a lot of money with an iPhone birdwatching app, but fail to read far enough to realize that he only got the big boost after his app got featured in an Apple TV ad.
So for developers: get your app in the various stores, and make sure users can find them easily with the search function in each one. Then get your marketing efforts going. You deal with fragmentation of the stores by being in all of them, and push users with “search for it in your app store”.
The takeaway for app store providers: get the distribution right, but if you really want to drive downloads and developer success, do it not only with the usual suspects like revenue-sharing levels, but give them some real marketing help, too.
Update: See this post over at GigaOM for some good insight into the long tail of iPhone apps, courtesy of AdMob data (AdMob being a great way to both publicize and monetize your apps, right Russell? 
):
I suspect the success of a particular app relies on one of three things:
* You are already a huge, successful company, expanding on an existing product. See: AIM, Facebook, ESPN.
* Apple decides your app is worth promoting on the front page of the App Store.
* Your app is really good, and all your users rave to their friends about it.
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