App Store wars, predictions by CellStrat and suggested strategy

There is an excellent article in Business Week (April 6, 2009 print edition) this week on Mobile App Store wars by Reena Jana and Peter Burrows. Below is a summary with some additional comments by us. At the end we make some mobile app market share predictions for 2011 and suggest some strategic ideas :

Business Week article (“An All-Out Online Assault on the iPhone”) :

RIM, Nokia, Microsoft and Palm are planning an assault on the Apple’s Red-hot App Store by launching their own App Stores for mobile phones. Mike Lazardis, co-CEO of RIM is set to launch BlackBerry App World at this week’s CTIA in Vegas. App World will have minimum pricing of $2.99 per app and will provide 80% of the dev revenue to the developer vs Apple’s 70% rev sharing. This is bound to entice more serious App Store developers who like the higher cut in case of BlackBerry. Moreover the latter is more prominent in the corporate circles so is likely to get corporate-minded developers. Mike McGuire of Gartner estimates that there will be significant threat to the Apple App Store with these plethora of App Store offerings. No wonder then that Apple has released an enhance iPhone 3.0 with tons of new functionality for iPhone developers. Rumors abound of a new iPhone device come June – Apple WWDC conf is around that time so a likely point for new hardware announcement.

Apple has created a new business model which these other Apple wannabe mobile firms want to copy now. While the simple mobile phone continues to take a hit from recession, the smartphone market is expected to jump from 139 million last year to 295 million in 2010, per Gartner. This will exceed the 300 million-unit PC market in due course. If not for netbooks, PC market is set to be outpaced by mobile phones in few years.

RIM is not a newbie to mobile app market. It has seen download of its application kit 100,000 times and there are BlackBerry apps for QuickBooks and clinical apps. However BlackBerry does not have a consolidated site strategy where the applications are hosted and distributed leading to Apple being a first in the most intuitive delivery strategy.

Well, Apple is way ahead for now. It remains to be seen if others can catch up in Mobile apps or Mobile Web world. Nokia, RIM and others sell far more phones than Apple but iPhone growth continues to defy gravity giving a shiver to the other entrenched mobile players. Who imagined that a formidable and innovative firm like Nokia would have to worry about a new-to-town cellphone maker ?

Apple App Store has 25,000 apps which span the spectrum of uses. Santoshi Nakajima, president of photo editing startup Big Canvas claims that they don’t even bother with non-iPhone App stores. iPhone is that strong in hearts and minds of developers. Many developers say that Apple’s real edge is in providing the tools to help them build cool, innovative programs. Mark Woolen, an Oracle VP claims that they make apps for both BlackBerry and iPhone but iPhone offers a more elegant approach to app development over mobile phones.

The good thing is that this competition is great. It is bound to fuel innovation among mobile phone developers. Microsoft strategy is to offer Windows mobile phones which work seamlessly with its Windows OS (yawn!@), Nokia Ovi Store, scheduled to open in May, is adopting a creative approach – it will offer content based on user’s tastes, location and friend’s recommendations. Nokia is trying to offer personalization in app search and delivery. Interesting.

It is all good. We look forward to these app store wars. May the best win and may innovation thrive…

Now some predictions from CellStrat for next 1-2 years :

– iPhone will maintain the market leadership in mobile web and mobile app store. Others will struggle to come close to iPhone App Store penetration.

– RIM BlackBerry will provide significant competition in corporate world to iPhone. We feel BlackBerry is behind in consumer segment in spite of being a top smartphone maker. They need to bring out some more compelling consumer devices.

– Nokia and RIM will be the strongest after Apple iPhone and pose the maximum threat to iPhone App store. Nokia may come out a good second ahead of BlackBerry due to its massive global footprint. We believe Nokia will have 10-20% of overall app market and BlackBerry might in the 10% range on strength of its corporate connections.

– Microsoft, Palm and all others will be third in Mobile App Store strategy. We still have to see what effect Palm Pre has on marketplace but its app store may continue to lag regardless of Pre adoption (due to developer apathy). All these other mobile App Stores combined might be limited to less than 20% of overall Mobile App Store market share.

 

Strategy for success for Mobile App Stores :

– Developers, Developers, Developers – Focus on developers and making their lives simple by providing tool systems easy to use and deliver. Develop vibrant developer community around the App Store and its tools.

– Focus on devices – Get in the bed with the best devices – your own or third party.

– Focus on usability – how to make the user experience with the apps simple and intuitive. Hire some usability experts (Sorry, Steve Jobs is not available).

 

We believe with these ideas, non-iPhone App Stores can cause some dent in iPhone App market.

War on Mobile App Store Front soon…

I was at Nokia Forum yesterday in New Delhi while it was being organised by Nokia parallely in Malaysia too. Nokia has started organising these forums/ code camps regularly now to connect with third party developers who come out with very innovative applications every now and then from around the world.

Mostly present there were talking about how different manufacturers like Research In Motion (RIM), Google Inc., Microsoft and Nokia etc. are all tryting to get a pie of the app store market share, a trend started by Apple. Most of them agreed that Apple actually told the world that phone is not just for talking or sms but a lot more then that, through it’s iPhone and the app store. However in India, iPhone is not as popular in absence of 3G networks.

Now, other companies like RIM and Nokia are going to leverage that customer knowledge (imparted originally by Apple)  to monetise the huge opportunity available now as Nokia and RIM both have far greater market share in India then Apple’s iPhone.

Research in Motion (RIM) in October 2008 announced two major distribution initiatives for smartphone applications for its BlackBerry handheld, including an online store called BlackBerry Application Storefront and an application center. RIM began accepting applications and content from developers for inclusion in the storefront in December and the store is scheduled to launch this month. The storefront will allow developers to set their own prices for applications. RIM is working with PayPal, an online payment service, to provide consumers with a way to pay for applications from BlackBerry smartphones.

Nokia is launching their app store on OVI starting first from western world by end of first quarter and later entering in India by around mid of this year. Nokia is also tying up with various payment platforms including credit card payment gateways online for cutomers to pay for applications.

A key question for technology executives is what value, if any, do these app stores provide to business users? So far, experts say, the usefulness for business appears to be limited. But with the influx of new players in the market, the number of business applications might increase.

Motorola to opt for Android OS

Sources in India have mentioned that Motorola is soon going to opt for Google’s Android as operating system for its new range of phones. On the other hand, business-focused devices will be based on Microsoft Windows Mobile. The company however, will continue to use its own platform, P2K for low-end phones. The company is also looking to outsource production of some windows Mobile phones.

Vishal

Android Market announced…

Only concern about the Android Market will be licensing, security and stability of the apps…

Google’s Android developer community has announced Android Market, a service.

Similar to the Apple App Store. As per the post on Android Developers Blog, the Android Market is an open- content system that will help end-users search, purchase, download and install featured apps and other software directly to Android-based phones and devices.

 

Initially, An+droid – based handsets will feature Android Market beta version service commercially. Google will host the content from developers with rating and feedback system. At the Android Market, the content developers will have freedom to make their content available openly unlike the Apple App Store, which has monitored and controlled membership as well as posting. Apart from that, support for free applications would also be available.

 

Only concern about the Android Market will be licensing, security and stability of the apps.

 

Android Market beta version will have free apps and also subsequent firmware update that will provision the phones for other paid versions in future.

 

The mobile operating system is really picking up now. After Apple App Store and Android Market, what next? Perhaps a similar service might be started by Symbian when it goes open-source, Microsoft for the Windows Mobile or Research In Motion.

 

Whenever Android-power handsets are available in India, developers and users will be able to enjoy the open environment of the Android Market.

 

Vishal

Wait for Vi-Fi from Microsoft

Microsoft  is working on this technology in collaboration with the University of Massachusetts and the University of Washington.

Microsoft is developing a new technology dubbed Vi-Fi, which means Wi-Fi in vehicles.

This system will enable users to use Internet while on the move, and will cost less than existing cellular broadband systems.

 

The software giant is working on this technology in collaboration with the University of Massachusetts and the University of Washington.

 

This new technology promises to offer a steady signal unlike Wi-Fi networks, where each signal station (base station) only broadcasts so far, so users have to hop between stations. During these transitions, known as “hard handoffs”, the signal strength typically drops.

 

Today’s Wi-Fi handoff protocols are incredibly fragile in outdoor environments and mobile environments artificially limited to talking to only one access point, or only one base station at a time, even though there may be other base stations in the area.

 

Therefore, Vi-Fi is being designed to send and receive signals from more than one base station and the strongest strength gets designated as anchor, while others are also used as auxiliary systems.

 

Researchers with Microsoft, University of Washington and Massachusetts believe they are the first to suggest such a solution, which may finally make vehicle Wi-Fi workable. They have already tested the system on Microsoft’s campus in Washington and further planning to conduct the test on a bigger scale in the area surrounding the campus.

 

Source: Techtree.com

Vishal

Oz as a Competitor for Research in Motion and Microsoft…

Email on the smartphone has been the domain of Research in Motion and Microsoft, but consumer email provider Oz believes their monopolies in the push email market are ending. Oz isn’t tackling the enterprise email market, though. Instead it’s targeting the growing number of smartphone users that don’t hail from the corporate world but still want to access push email’s functionality: small- and home-business users and particularly consumers.

Oz yesterday unveiled SmartMail, the next evolution of its consumer email platform, which incorporates many enterprise functions into what is essentially a client that accesses portal-based email such as that offered by Yahoo, Google or a hosted business service. The OZ SmartMail™ solution offers advanced capabilities for the savvy consumer, small business or home business professional who require more advanced email functionality, but do not want the high costs associated with enterprise email subscription plans.

Though Oz announced the availability of the SmartMail suite yesterday, it has already landed a customer. Verizon Wireless has been deploying the SmartMail client on many of its smartphones in the last few months, including the Motorola Q line and the Palm Treo and its recent HTC smartphones.

Vishal

Proto.in Live – July Edition ‘08

I attended Proto.in Live – July Edition ‘08 held in IIT – Delhi. It was a great success with quiet a few startups from all over India. They show-cased their companies to Venture Capitalists and other funding community people also present in the event. Almost 500 participants attended the event from all over India, more than expected.

Mr. Kiran Karnik delivered the keynote speech this time at Proto.in on the 18th of July in the Seminar hall of IIT Delhi. Mr. Kiran Karnik spent 20 years in ISRO and building NASSCOM which put a structure, quality and bent the policies for growth, for the services Industry, his legacy is one that is embedded into history.

Some of the venture captialists present there were Pinstorm, Morpheus Ventures, IDG Ventures etc. Large number of companies from all categories like mobile, web, food processing industry, finance etc. were all present there. Some of the prominent ones were Directi (a 300+ million dollar company owned by the youngest guy just in his early 30’s). He was an instant hit among the audience. Others were Tekriti (Owned by Ex-Microsoft guys), Eko (Started by Ex-Citibank Professionals), Kiruba, Blink, The Hiring Tool, Lipikar, Apnabill  and many more. Whole area was wifi enabled for the attendees to blog about the event and best blogger was given prize too. There were continuous hits on twitter, technorati etc.

Overall all the participants in the event were full of never ending innovative energy. It was a kind of an event where all startups and enthusiasts looking for joining these startups should always go as these fill the attendees with the same enrgy and give a major boost to entrepreneurial spirit.

Towards the end of the event an ideas jamming session was held by proto people which was a great success too. They gave all the attendees 30 seconds to pitch ideas they would like to develop or get developed for the entire world to benefit from. Almost 70+ ideas were generated in just 60 mins. of time out of which 4 best ideas (one being our’s) were choosen and given prizes to, as an encouragement.

It wa a great experience and I look forward to attending more such events in future. They are a great place to gel with the like minded people…

Vishal

Microsoft – Yahoo saga

Gosh.. this does not seem to end. I wish this went one way or the other and we were spared the glut of news around this on every tech board. Microsoft needs Yahoo to be anything in the internet space and it is as simple as that. For Yahoo it is a good exit plan. But for consumers and internet users, a merger is not good news. We want more competition rather than a few monopolizing the net. Regardless, I wish this would end and we can move onto some more interesting tech happenings and some new ideas in hot areas like mobile.

MT

3G iPhone announcement at Apple conference

Steve Jobs of Apple announced today the availability and details of 3G iPhone. It is available in the US from July 11 for $199. Not sure if if AT&T is discounting it or Apple is willing to sell it at a lower price (compared to $399 for the previous iPhone version). The new iPhone is a 3G device with GPS Mapping, a loaded App Store which houses some cool iPhone apps, MS-Exchange integration (attack on RIM turf – the enterprise?), and GPS. Apparently it is a 8GB device at $199. There is a $16 GB version at $299.

GPS is cool – it will drive Location Based Services and related applications like advertising, finder services and social networking.

MS-Exchange support is cool too as it will help in more enterprise adoption and cause some headaches to the folks at Research in Motion (Blackberry manufacturer).

The price is great too for cost-conscious customers.

Apparently 3G iPhone will be released in 20 countries.

We are excited and cannot wait to lay our hands on the new 3G iPhone.

MT

Microsoft search cashback – stroke of genius or sign of desperation ?

Microsoft is trying to buy your searches. The new program, dubbed Microsoft Live Search Cashback, sounds like some sort of cash rebate program similar to what you see in loyalty programs at retail stores or credit cards. Is it a wise move for Microsoft ? Will it turn the page for Microsoft vis-a-vis Google’s overwhelming market share in search business ?

We think the idea has some merit but for the most part it is an act of desperation. After all, searches are not for sale. People search in the hope to find good matches for their searches and advertisers go to search engines where they see consistent scalability and return on ad dollars. Microsoft has to do better on various other aspects of search like better searches, better ROI to advertisers, more relevant ads. Today, a small number of folks use Microsoft Live search – roughly 9.1% of US searches are done via Microsoft Live vs 61.6% for Google. Simply buying searches is not going to do it. This is classic Microsoft, if you can’t win on business model or innovation, use financial muscle to buy your way in. This may work but only in large partnership customers of Microsoft who will be hounded by Microsoft’s aggressive sales personnel to replace Google search box with MS Live search. For the vast majority of consumers and businesses however, their Google search box isn’t going away anytime soon.

MT