Apple Has Pulled AppGratis, But Could Its Model Be Replicated in the Arab World?

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Dreaming of discovering new apps that would make your life easier or more entertaining?

That's what app-discovery apps are for. From French Appsfire to US Appoday or French AppGratis, app-recommendation apps have been a trending topic in the international tech scene lately.

Until today, this buzz mostly followed Appgratis' announcement that they had raised $13.5 million in a series A round after reaching 10 million users worldwide.

Today, the bubble of excitement has popped, with the news that Apple has pulled AppGratis from the App Store. 

This move is based on clause 2.25 of the Apple’s App Store Review Guidelines for apps, which states that apps shouldn't compete with the App Store: "Apps that display Apps other than your own for purchase or promotion in a manner similar to or confusing with the App Store will be rejected."

Last December, Appshopper also got pulled off the App Store for this reason, but seeing how many apps are doing a smilar job, it is safe to think that, so far, this clause has only been used for specific apps, for specific reasons. Is it because AppGratis got too big? Because it hit the U.S. Market? Or because they did something that we're not aware of yet? 

In the bigger picture, does it means that the business of app-recommandation is dead? Probably not. Many believe that the app could return to the App Store if founder Simon Dawlat changed its model a bit. After all, a lot of apps in the same category are still up and running.

Perhaps Apple's move is designed as a warning to all others.

Yet, the timing couldn't be poorer for emerging markets, where use of AppGratis is just heating up. AppGratis currently has over 200,000 users and growing in the MENA region, as users experiment with testing out new local and global applications.

To understand how the model could serve the Arab world, we spoke with AppGratis founder, Simon Dawlat, before his app was pulled from the App Store.

The key word is “simple”.

How does it work? Everyday, AppGratis features one paid app for free for a limited time, as well as apps with a discount or an in-app promotion.

“We simplify the process of distributing an app globally. Our product is also stupidly simple,” explains Dawlat.

Simplicity, a friendly tone, and a great word-of-mouth have made this app for apps an international success. The revenue model is simple too: app developers pay to make their app available to their community. Last January, AppGratis revealed that this revenue model got them to earn more than $1 million in monthly revenue.

The AppGratis team has also invested heavily in its international expansion; after launching in October 2010 in France, the app's 10 million users span 30 counties, and the startup boasts local offices in 12 of those countries, (it offers the app in 12 languages). 

“Our first localization efforts were in Europe,” explains Dawlat. A year later, the U.S. became their biggest market. After Europe, came "Latin America with Brazil. And then Japan,” he says.

Currently growing at 100,000 new users per day, "we’re keen on accelerating," says Dawlat.

"We’re expanding operations in the U.S. and we think AppGratis has the potential to be one of the few companies with over 100 million users. We want to be there in less than 2 years," he claimed before the Apple debacle.

Is the Arab world next?

While developing countries have not yet been a part of AppGratis's focus, the app has, as mentioned over 200,000 users in the Middle East and North Africa, without having localized whatsoever. 

"AppGratis does currently not exist in either Arabic or Farsi, but MENA is a very interesting market for us and this year we are planning to expand internationally and be present on more markets," says Dawlat.

If the app can get back on its feet, the MENA market will be one to focus on. A recent research conducted by Google on 26 countries over the world has named the Middle East the next big market for mobile applications.

It's easy to understand why. Not only did the UAE ranked the highest in terms of smartphone penetration in the world, with 62% of smartphone users, but it also encounter a significative growth of 18% of users in just one year! 

The 3 other countries featured in the study, Saudi Arabia, Egypt and Jordan, have also experienced an impressive boost in smartphone usage, and are now claiming a penetration rate of, respectively, 60%, 50% and again 50%. But, what’s more interesting is that Middle East smartphone users seem to be heavy users of apps. 70% of smartphone users in Lebanon say they’re using smartphone applications according to Ipsos, while 61.1% in Jordan, 48% in KSA and 45% in UAE also claim to use apps, according to Google.

Still, the app industry is still burgeoning and most of the users are only using the AppStore or the Market Place to download apps. 

If an international success like AppGratis went to open an office in the region, could it change the way the Arabic smartphone users download their apps? Could it lead in a boost of apps buying? This is yet to be seen, but those figures clearly show that there’s a need to be fill.

Right now, the market is still unexplored. Could it be time for a local app discovery service to start before a big company starts invading it?

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