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Posts Tagged ‘mobile web’

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 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.