Mobile Revolution

Nobody denies that the iPhone has had a major impact on the world of mobile gaming, but opinions differ as to what, exactly, that impact has been. Apple's sudden (albeit widely predicted) emergence as a platform holder of note has certainly changed the landscape - but speaking to people across the industry, there's little consensus on where the company, and the market as a whole, goes from here.

Those who have been labouring away in the mobile gaming market for years would be forgiven for feeling a little bitter at all the attention Apple is garnering. Mobile game development and publishing has been a thankless task since its inception, and the few companies who have managed to eke success out of this market have done so by overcoming extremely tough challenges. They have built systems to support literally hundreds of handset and software combinations, worked through a complex and unfriendly landscape of distributors and network operators and battled to convince consumers that their mobile phones were valid devices to play games on.

Then, suddenly, Apple enters the market - and within a mere 12 months, the iPhone has an attach rate for game sales that's an order of magnitude higher than the rest of the mobile phone market. It still doesn't account for a majority of mobile game sales, but it's unquestionably the most successful device on the market in that regard - and it's just about the only device that the rest of the industry wants to talk about.

There's a good reason for that, and it's not just the shine and glow of Apple's product design and marketing. The firm's muscle has allowed it to tear apart the barriers to entry which have previously frustrated mobile application creators. iPhone developers have a single hardware platform (with minor variations, admittedly) to develop for - and moreover, the App Store cuts straight through the question of network operators or distributors. It's just another data service, and the network operator gets no say in what products are featured and no cut of the revenues.

A new iPhone range is expected to arrive next month, boasting larger memory capacity, a faster processor and a handful of new features - most likely an upgraded camera (with video functionality, at last) and better GPS navigation, including a built-in compass, which is useful for providing turn-by-turn navigation. However, as the phone's third iteration approaches, questions are being asked about what happens now to the mobile content industry - a market which has been turned on its head by Apple's entry.

Apple, and some within the industry, see the company as being a long-term dominator of the high end of the market. While RIM's Blackberry range continues to hold relatively firm as the choice of large enterprise, and Palm's new Pre handset is generating some buzz as a likely iPhone competitor, right now Apple doesn't seem to face any serious challenge for the consumer high-end market - which is, of course, exactly the market game companies want to tap.

This won't last. Whether Apple can build the iPhone up into a stranglehold position similar to the one it enjoys on the music player market with the iPod is extremely questionable. That being said, few would have believed ten years ago that Apple was going to thoroughly trounce electronics giants like Sony in the portable music space - so there's certainly no guarantee that companies like Nokia or Sony Ericsson will be able to effectively compete with Apple. Given the line-up of rivals, however - which also includes Palm, RIM, Motorola, HTC and, indirectly, Microsoft - it seems unlikely that Apple will be unchallenged for long.

However, the changes that Apple has made to the market will persist even if the iPhone's own dominance wanes. Aside from the touch-screen and the design of the device, both of which are being widely emulated already, the App Store and the iTunes Store are the two most dramatic changes to the mobile content landscape since phones first became capable of downloading media and applications.

What Apple has done, in a nutshell, is what mobile content providers have dreamed of in secret for almost a decade - the company has finally put network operators in what the content firms view as their rightful place. Operators have spent years trying to be directly involved in every content transaction that takes place over their network - positioning themselves as publishers and distributors, the gatekeepers to the mobile market.

With the muscle provided by hawking an exclusivity deal for the iPhone, Apple has completely rewritten those terms - and turned operators into little more than pipeline providers, similar to your broadband company. You can buy music, games and applications over the air for your iPhone, and your network provider has nothing to do with it - it just provides the data pipe which enables the transaction.

This was unthinkable a few years ago, but since Apple's arrival, it has become the basis for the new structure of the market. Nokia has been able to push through its ComesWithMusic handsets and infrastructure, which similarly bypass the network operator. Google's Android handsets, presently the realm of a somewhat geeky minority but widely tipped as an iPhone competitor in future, have a similar store for third-party applications. New versions of Windows Mobile devices will follow suit (and are widely expected to plug into the Zune Store for music and video as well).

The idea of the network operator as a content provider isn't dead, but it's on its last legs. Increasing numbers of operators are seeing themselves as providers of network infrastructure and leaving content provision to the handset manufacturers and the internet, and it's hard to see how any other model will be workable in future.

This is Apple's legacy, regardless of whether the iPhone continues to be successful - and the consequences are far-reaching. One of the most interesting outcomes is that it's no longer important to develop a game for every handset on the market. You can create an iPhone-only, or Android-only, or Windows Mobile-only title, and simply place it on the store for that device - perhaps thinking about porting it if proves to be a success. As a result, platforms will strive to be as developer-friendly as possible, since the availability of games and applications is likely to be a major selling point - already, top applications and games feature prominently in Apple's marketing for iPhone.

As for all those companies who have struggled manfully with the challenges of mobile gaming in the past five to ten years - well, there's still money to be made in that market. The iPhone's huge success is still dwarfed by the availability of other handsets; selling games on them may be harder and less rewarding, but it's still a market, and will continue to be so for some time. In the coming years, however, the model exemplified by the App Store is where the entire content business on mobile will end up - while the rest of the industry, intrigued by Apple's recent hires of games industry executives, will be wondering how long it will be before something like the App Store appears on a re-imagined AppleTV device.