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Posts Tagged ‘mobile apps’

What can be free will be free & Quo vadis Social Graph?

In technology on July 12, 2010 at 9:15 pm

As mobile distribution platforms grow, cost of smartphones drops (Mediatek/Android targeting $70 smartphones!), and competition for paid apps increases, mobile advertising will eventually gain the critical mass needed to fund more and more mobile apps. Like on the desktop, once there is enough advertising money to cover the opportunity cost of charging for apps, what can be free will be free. By 2014, Pyramid Research predicts 80% of mobile apps will be free compared to 30% in 2008.

Similarly, as the capabilities of web browsers increase to match fully capable desktop browser, the bar for what can be charged for on mobile goes up.  Media companies that are able to charge for their content on premium platforms like iPhone or iPad, will need to evolve their apps to offer functionality and services that are uniquely tailored to the mobile use case, and that deliver value beyond an optimized, high-touch display of the same content they make available for free online.

This should unleash a new wave a innovation in paid mobile apps, both by traditional and new media companies.  Magazines whose print revenues are under pressure can retain their consumer base and monetize it both by extending the value they provide them on mobile through extra functionality particularly designed for the mobile experience and by maximizing the distribution of their ad-supported content on the web accessed by mobile browsers.

Similarly, new media companies extending to mobile must go beyond delivering a mobile optimized version of their site in their mobile apps and mobile web sites.  There is still a lot missing in enabling social networking in the context of the mobile experience (ie not being in front of a desktop, meeting new people or looking to socialize in a mobile context).  And speaking of which and fast forwarding a little – how far away can a “Facebook phone” be?  Will the Social Graph do for Facebook what Android is doing for Google? It may just be the mobile app marketing engine needed to navigate the coming onslaught of mobile apps.

UPDATE:  Interesting article on BBC deciding that paid apps will be challenged by the mobile web here

Mobile app economics: native apps vs. the mobile web, developed vs. emerging markets

In technology on July 11, 2010 at 5:13 pm

This question has come up in quite a few conversations recently. Coexistence is the obvious easy answer… but begs a closer looks at the trends currently shaping the industry.

Mobile OS platform fragmentation is increasing, developer economics are reinforcing the perceived winners’ positions as the pecking order is still in flux.  There are wide variations in relative strength by geography, as well as varying degrees of influence of operator portals vs. vendor stores.  While North America and MEA are expected to see 70%+ of downloads thru vendor stores by 2014, in APAC operators will continue to account for 60%+ of downloads, while in Latam operator portals are expected to drive over 50%, and perhaps more if cross-vendor platforms like Qualcomm Plaza are deployed by mega-operators.  Also in largely prepaid markets that are not distorted by high subsidies like the US,  there is a limit to the reach Apple can have with its current premium strategy – and where Nokia and Google have a much better chance to have significant reach, after mega-operator platforms.  Extrapolations of the US market dynamics to other regions of the world can only go so far.
Developers will likely choose the top 2-3 platforms available to them in their respective region, based on reach and monetization opportunities.  However, as mobile browsers on mobile devices evolve (like Nokia N900 powered by Maemo running a full Mozilla browser) and start supporting Html5, some of the reasons for having dedicated apps (such as access to GPS, video, etc.) go away.  Looking for example the m.youtube.com site in a browser supporting Html5 proves the point. Of course there will continue to be specific apps such as games, that will always work better as native apps as opposed to web apps, but as powerful browsers will be widely available in smartphones by 2014, the mobile web will definitely provide the broadest reach of any platform, taking some of the heat off the current “who has more apps” race between the various app stores.  (N.B.: Not to be underestimated here is the discoverability / marketing element app stores and operator portals provide – this will continue to be an important role they play, even as mobile web broadens its reach and app download volumes explode, from 5.7B in 2009 to an estimated 41B in 2014 or 6.5 apps/user/year.  A flurry of start-ups like Flurry, Yappler, etc. have already sprung up to capitalize on the app retailing opportunity and provide recommendations, voting systems, etc.  Attracting and targeting consumers will become increasingly important as multiple app stores will likely coexist on the handset together with a fully powered mobile web – Mobile operators could play a key role here as marketers of apps and solution bundles with data !)

So to skate where the puck is going, mobile web apps and their promotion, discovery and monetization, particularly mobile micropayments should be the next area of exploration, in addition to the much discussed mobile advertising opportunity which will finally deliver on its high expectations. And there, operators, particularly in emerging markets with low levels of credit card penetration, will continue to play a key role, not only as distribution partners but as mobile payment providers.  It is a pretty safe bet that between the growth in emerging markets and the growing power of the mobile web, mobile app economics 5 years from now will likely be quite different from what they are today.