Attended the Wireless Technology Forum (Atlanta) General Meeting on Wireless Consumer Apps

I visited the Wireless Technology Forum’s General Meeting today. WTF is the top wireless networking group in Atlanta with 550 members and growing rapidly. The topic for today’s session was “Where is the Money in Wireless Consumer Applications?“

The WTF session today had an excellent panel :

Ken Hayes, EVP – Carrier Relations, ThumbPlay

Rob Hyatt, Executive Director, AT&T Mobility

Andy McGuire, VP Mobile Innovation, GSM Association

Andrew Dod, VP Marketing, Whoop Mobile

Ron Kozoman, Director, Mobile Operations, Turner Broadcasting Systems

Moderator : Maury Margol, Sr. Director, Client Relations, Nielsen Telecom Practice

Here are some highlights from the panel discussion :

As one would expect, iPhone has come to dominate all things mobile internet in current times. Basic theme all throughout the discussion was that the iPhone is a game changer in mobile app world. It has shown the world how the mobile user experience should be and how to influence consumer adoption with a compelling application portfolio.

Which mobile apps are making money today ? Ken suggested it is the iPhone apps with its AppStore strategy.  3 years from now, it will be LBS which will be main revenue generator in mobile apps. Andy McGuire suggested that 800 million iPhone application downloads so far is the tip of the iceberg. It is an indicator that developers and consumers are there if the ecosystem is right.  He mentioned that in future, one might see utility models like medical and home apps on mobile phones. One panelist opined that in spite of all the iPhone AppStore hoopla and massive no of apps available, money is still being made in limited categories like games and music.

On the question of wired devices, the panel was of the opinion that in future there will be lot of wireless devices which will preclude the need to have a wired network but higher speed apps will still find a use for wired networking eg in case of high speed TV. Andy quoted Sony CEO’s statement that in the future, 90% of devices may be wirelessly-enabled. Clearly wireless is the future for all networks but for reasons of speed and niche uses, wired devices and network will still prevail in some areas. Some interesting uses of wireless will be wireless blood pressure monitor, reservoir monitors etc.

On the question as to how a carrier like AT&T makes money in “open mobile” environments like iPhone AppStore, Rob from AT&T mentioned that iPhone has increased data plan sales for AT&T and also AT&T itself makes some of the iPhone apps.  Plus AT&T attracts a huge no of new subscribers due to the iPhone exclusivity. In essence, AT&T has lots of monetization models around iPhone type of devices where the volume of customer adoption more than covers for the revenue lost due to “open” mobile gardens like iPhone AppStore.

Next there was a question – how can developers make money in mobile apps? The panel was of the opinion that there are lot of apps being made and put out most of the times for free. Lot of these apps are simply experimental in nature or are hobby apps with no business model around them. The panel suggested that developers need to think through the business model when writing apps. Most apps peak and then are forgotten in the ever increasing mass of mobile apps on iPhone AppStore. As to mobile ads inside the mobile apps, it is a nascent idea at this point but in future, this will become a bigger source of revenue vs a download fee. One panelist suggested that considering the fact that there are 4 times the no of mobiles in the world compared to no of PCs, there is a dearth of content for mobile so that is an area which developers can look at. Also RIM has stated that minimum pricing for BlackBerry App Store app will be $2.99 – this may invite more serious developers who have a revenue-generating business model in mind.

Per Robb Hyatt from AT&T, iPhone took AT&T Mobility from “2nd innings straight to 5th innings” in mobile data; I found this interesting.

When asked where does Google come into picture, the panelists mused that it is one of many players unlike in internet where it dominates via search. One interesting aspect about Google Android is that it has reduced manufacturing costs for OEMs (read cellphone makers) dramatically. Eg Samsung or Motorola no longer have to spend tons in maintaining custom mobile OS for its phones. It can focus on making compelling phones and just use Android for mobile OS.

On Mobile Payments, the panel thought that Near Field Communications or NFC payments are still in infancy although other countries are slightly ahead of USA in this area.  Also consumers need to become comfortable about security before mass adoption of Mobile Banking will be seen. Andy gave an example of “Banking for the Unbanked” in Kenya on Safaricom network and its mobile payment offering called m-pesa. The 7 million m-pesa customers use mobile as a payment mechanism and receive paychecks on it. This is excellent innovation in mobile payment. Everybody agreed that mobile payments and banking is a trust model as much as it is a technology model.

Then the natural question : has recession effected mobile apps business ? Apparently not, per the panel. It seems consumers will not give up mobile and its little entertainment oriented apps just like they won’t give up on movies in a downtime. Mobile is an essential device today for a consumer.

All panelists agreed that there is lot of innovation remaining in mobile app arena. The primary gaps remain in user experience and business model evolution. iPhone experience is the beginning and not the end.

Well, very informative and highly intuitive discussion. Thanks to the panel and to the organizing team at the WTF – Maury Margol, Bob McIntyre and Steve Bachman.