Entner on smartphone apps: The emergence of category champions

History is beginning to repeat itself. Just like on the wired internet in the late 1990s and early 2000s, we are beginning to see the emergence of category champions in the app space: Dominant providers in particular categories. Being a category champion provides significant advantage in attracting customers and advertisers alike, but being category championship is not necessarily a permanent position.

Just like the crown of being the dominant internet search engine changed hands from AOL to Yahoo, the online search category champion before an innovative and industrious competitor, Google, seized the crown. 

The following data is from Nielsen's second Apps Playbook released this month. It is based on a survey of more than 4,000 mobile subscribers who report having downloaded an app in the previous 30 days.

The Weather Channel has emerged as the clear leader in the Weather Apps category, building on the strength of its TV channel franchise and Internet site. Weatherbug, very strong Internet widget, is second. Accuweather, one of the main providers of weather services to TV and radio stations, is not as able in translating its position in traditional media and comes in third.

In sports, again the TV category champion, ESPN, is able to translate its momentum into the apps space. Fox Sports and CBS Sports, are not even close to pulling in the same kind of audience as ESPN, despite being major TV networks. The apps for the three major sports are led by Major League Baseball, which is not surprising since the baseball season was in full swing during the fielding of the survey. NFL Live has about two-thirds and NBA Game Time a little bit less than half the share of MLB.com. Both sports should poll significantly higher when their respective season has started and fan interest is at its peak.

What is very interesting in the music app space is the dominance of Pandora compared to its traditional online competitors.  ITunes' popularity is a function of the popularity or the iPhone, since it is not available on other platforms. Shazam is the leading music ID service on apps with no other competitor in sight, even though Shazam was a relative late entry with several of these services already available on feature phones. Other music and radio services have fractured the market, each with one-fifth to one-tenth of Pandora's market share.

Among mapping apps, Google Maps has a significant lead based on being the default mapping app of both iPhone and Android devices. MapQuest, one of the most successful competitors of Google Maps on the Internet, has captured roughly one-third of Google Maps' app downloads, which can certainly be described as a success. Google Earth, which has to be downloaded like MapQuest, is the dominant geo-mapping app with almost 25 percent of our respondents reporting that they have downloaded the app. Other mapping apps have only a fraction of download and usage.

The emergence of these early category champions do not mean it is over for the other competitors and new entrants to these respective segments. What it means is that is has become the respective category champion's game to lose--and history has shown us that there are plenty of former category champions who lost. When category champions take their position for granted, become complacent and stop innovating, new companies can come out of nowhere and quickly become forces to reckon with, unseating once dominant and invincible competitors.

Roger Entner is senior vice president and head of research and insights for the Telecom Practice of Nielsen. For ongoing insights from Nielsen on this and other topics, visit NielsenWire.com. If you are interested in more, Nielsen has published a white paper on the topic that is available here.