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.

iPhone 3.0 OS Overview

I wanted to write about the new Apple news – that of iPhone 3.0 software. Apparently it is a version which will fulfill many of the things which were missing before :

– 100 new features
– Search iPhone
– Cut, copy and paste capability – sorely lacking in prior versions
– Send photos, contacts, audio files and locations via MMS
– Read and compose email and text in landscape mode. Earlier the safari browser allowed this but not the email and message box. Now the latter will allow landscape also.
– 1000 new APIs for developers
– enable in-app purchase of content like subscriptions, additional game levels and other content
– apps can communicate with other hardware via Bluetooth
– push is available to developers to push content
– multitasking so multiple apps can run simultaneously
– developers can use the map feature of iPhone in their apps
– developers can access the iPod music (or podcasts etc) library stored on the device and use them innovatively in their apps

 

This is a sample list – we will write more as we learn about this exciting new announcement from Apple – we remain die-hard fans of iPhone which is a true mobile revolution as far as we are concerned.

Top Trends in Mobile Space

Next 2-3 will see radical changes happening in mobile space, making smartphones, netbooks and yet-to-be introduced devices even more indispensable parts of our lives. Here I am quoting ( from CIO Zone) some of the developments in US and will also try to give my views from India’s persective that will power this next phase of evolution?

Long Term Evolution (LTE)

The so-called fourth generation of mobile (4G) is expected to be rolled out across North America over the next three years, making it possible for corporate users to run business applications on their devices simultaneously with Voice over IP (VoIP) capabilities. Where as in India 3G is yet to roll out for masses. People are eagerly waiting for the same as slowly people are switching on to smart 3G phones.

WiMax

As LTE and WiMax networks are deployed in the U.S. through 2012, expect to see more netbooks and laptops equipped with built-in radio frequency identification (RFID) and wireless support. We sometimes get queries in India for development of applications in healthcare etc. but simple are not able to serve these clients due to unavailability of wimax infrastructure India wide.

3G & 4G interoperability

Sprint has developed a dual mode card which will enable mobile device users to work on both 3G and 4G networks. Other carriers are expected to follow suit.

Smartphone applications

Third-party software vendors will increasingly make enterprise applications available for smartphones, including inventory management, electronic medical records management, warehousing, distribution and even architectural and building inspection data for the construction industry.

GPS

Global Positioning Systems will increasingly be used to identify end users by their whereabouts and also to analyze route optimization for delivery workers and service technicians.

Security

As new and different types of mobile devices are introduced, corporate IT departments will find it increasingly challenging to identify and authenticate individual end users. As such, expect to see a combination of improvements in both Virtual Private Network (VPN) software and hardware-based VPNs to support multiple device types.

Tody, I was in Nokia Forum and there I came to know that last year, they had selected an pplication in International level competition where in with the use of cell-phone, you can convert your television into a touch screen device. These are the kinds of technologies that will change the world and bring all kinds of functionality of operating virtually anything, right in the hands of the mobile device owner.

Start Mobile Marketing or be left out…

According to a large company’s top level executive, 80% of major U.S. brands are planning to market via mobile phones in next six months. Snippets of what some companies have already started doing in US, are as follows:

Diet Coke is sponsoring a lifestyle program which will be distributed via mobile, online and outdoor.

Brands such as Procter & Gamble, Panasonic, Best Buy and Sony have turned to mobile advertising to directly target their demographics, ensuring a more cost-effective means to advertising this year.

Playboy Enterpises is launching “Interns,” its first multi-digital program developed, shot and produced exclusively for the mobile Web.

Google is expanding the functionality of AdWords to help its mobile advertising clients target and reach smartphone consumers.

IPhone users now have access to the New Oxford American Dictionary right in the palm of their hands.

Digital Doctors Connect to Patients, Info Online

it’s interesting to see these days that many doctors are actually asking for all kinds of latest technologies to connect with their patients around the world.

According to the ePharma Physician v8.0 study from Manhattan Research in US indicated that the number of physicians who use the internet and other digital technologies to access pharmaceutical, biotech, and medical-device information has jumped 20% since 2004 and accounts for 84% of the total US physician population.

The research also finds that 36% of physicians now communicate with patients online (up from 19% in 2003), and that physicians are more active than the average consumer when it comes to new media.

Some of the highlisghts of the study are:

• 54% of US physicians own a smartphone.
• Google is the most popular search engine among physicians, with 91% reach among physicians searching for health and pharmaceutical information online.
• 83% of physicians watch video clips online, as compared with 34% of all US adults.
• Physicians using online communities – such as Sermo and Medscape Connect – are more likely to be primary care physicians, be female, own a PDA/smartphone, go online during or between patient consults, and be slightly younger than the average physician.

We have recently been talking to quiet a few healthcare professionals in other parts of ther world too. We see a great boost in ways in which doctors and hospitals are trying to maximise contact with the patients right from the waiting lounges of their clinics etc. Some of the ways they have been using are bluetooth broadcasting on and off premises for broadcasting all kinds of health related information on products and services etc; using SMS broadcasting for latest updates on health care events etc.

Notes from Wireless Technology Forum SIG on Wireless Apps and Mobile Media (WAMM), Atlanta 10-09-2008

I attended the Wireless Tech Forum Meeting today at The Ashford Club, Atlanta. Today’s topic was Wireless Applications and Mobile Media. This is a new Special Interest Group within the Wireless Tech Forum and organizers have done a great job as usual of creating format and content for this SIG. Steve Bachman heads up the WAMM SIG along with co-chairs Richard Yates and Ed Pimentel.

Today we had an excellent first session on mobile media with a great presentation by Jerry Rocha, the Sr Director of Mobile Research at Nielsen Mobile (formerly Telephia). Jerry presented some great information on patterns, trends, usage stats on mobile media and mobile apps. Here are some highlights from the session :

Among major apps on the mobile data gravy train are SMS, mobile apps and mobile internet. We have to see which one comes out ahead in terms of user adoption but all are growing with heady growth rates compared to where they were before (of course we are only talking US market in this entire discussion, I know mobile data in Europe and Asia is a totally different ballgame and growth pattern).

Number Crunching :

If we include all mobile data, it is growing at rate of 28%. In Europe, SMS was big but with falling rates of SMS, carriers are pushing MMS which commands higher revenues. There were 260 million mobile customers in USA at end of Q2, 2008. Of which 56 million were downloading mobile apps. 15 million customers have seem video on mobile – small percent of mobile population but growing. Of the 260 million mobile customers in USA, 102 million have access to the mobile internet. 77% of mobile subscribers can get SMS today. Mobile internet is now a 1.2 billion dollar industry. 43 million customers in USA use mobile internet regularly now.

Trends :

Nielsen Mobile has access to 80,000 customers bills for market survey and this is the primary source of market research for Nielsen Mobile.

Among data apps, audio is a big killer app. Games was popular but there is decline in mobile gaming. Many fringe mobile gaming firms are going out of business with big ones like Glu Mobile and Electronic Arts taking majority of market share in mobile gaming. Ringtones are powerful but see slower traction now.

Mobile apps have see a huge uptick this year – one reason is the iPhone and the awareness it created about mobile apps in general.

From a strategy perspective, media firms like CNN, ESPN and others have pushed mobile media in spite of lack of enough support from carriers. Media firms are pushing off-deck content.

Mobile Internet :

Mobile portals are most heavily visited area. Email is second most popular with 27.4 million users (Nielsen is not including POP3 email accounts). Among sites visited most, the order is : Yahoo (22.3 million users), Google (18.9 million), MSN (14.4 million), AOL (12.6 million), Weather Channel, CNN, FOX, Apple, Turner in that order.

iPhone has been a game changing device for mobile internet with each firm now forced to follow a three pronged internet strategy : Regular website, Mobile website and iPhone-optimized website. Many firms have device detection and render appropriate website based on source of access.

Mobile Apps :

These have seen a giant increase since Q1 of this year. Most popular apps are related to LBS (Location-Based Services) – an area for which we in CellStrat have written extensively and have a nice white paper on our company website (www.cellstrat.com). Top 10 mobile apps are (in declining order of popularity) :- Verizon Navigator,  Sprint Navigator, AT&T Navigator, Wireless Synch Email, TeleNav GPS Navigator, Sprint Family Locator, MySpace Mobile, Mobile Email, MapQuest Mobile and XM Radio Mobile.

Lot of firms like Nokia are buying up firms which have LBS offerings or technology.

Some of the big publishers of mobile apps are : TeleNav Mobile, Networks in Motion, Intellisync, WaveMarket, MySpace Mobile, AutoDesk etc.

It seems Location tracking is an app whic commands $5 per month revenue relatively easily. Same cannot be said for some of the other mobile apps though.

The top mobile app areas in order of popularity are (most popular first) :- LBS (69% of mobile apps are related to this), PIM Tools, Weather, Music, Maps or Directions etc.

iPhone :

This has shaken the mobile world as we report countless times now. Apple iPhone now as 1% of USA market share and 3.7% of AT&T mobile phones are iPhones. By Q3, Apple had sold 10 million iPhones worldwide easily hitting its goal of 10 million iPhones in first year.

iPhone AppStore is a breakthrough concept and has opened up the mobile application ecosystem to developers like never before. In the 4 months since its launch, iPhone AppStore has seen 100 million downloads of mobile apps, total number of mobile apps on iPhone available now exceeds 3000 apps.

iPhone dominates every category of mobile web usage.

Some cool iPhone killers like BlackBerry Bold, Storm and Google G1 are out or coming out soon and we will have to see how well they do against iPhone. One reason for huge app success on iPhone is its excellent developer support and ecosystem eg the iTunes store. Nokia scores well too on this front with its Symbian platform.

iPhone users skew towards male with 67% iPhone users being males and 33% females although in overall mobile world, 52% of mobile customers are females.

Mobile Advertising :

This one pays for it all.

Interestingly Atlanta is No 3 in mobile video usage (interesting..never thought Atlanta was that big on mobile web adoption). Among mobile email, gmail and yahoo email dominate.

Nielsen has tools to scrap 300 websites every 15 minutes and categorizes them for ad purposes. It turns out Eletronic Arts and Dunkin Donuts are bigger advertisers in mobile internet. On ESPN Mobile, Electronic Arts is the biggest advertiser.

gPhone or G1 – Google’s Android-based phone emerges

Well…here comes G1 – Google’s Android phone from T-Mobile USA. This is the iPhonesque phone from Google running its Android operating system and manufactured by HTC of Taiwan. Incidentally, it is also the first Android phone, Android being the Open Source Mobile Operating System being promoted by Google via its Open Handset Alliance (OHA).

G1 is available from T-Mobile USA from Oct 22 for $179 (with a 2 year contract) but the carrier is pre-selling the phone from today.

Take a look :

Google phone G1

 

Google G1 (photo by Mark Lennihan)

It looks nice. Does it compare with iPhone. It comes close but still does not beat iPhone sleekness. What about software ? We still need to see if the Android and all the Google apps loaded on it do any magic beyond the benchmark set by iPhone and its amazing software and application ecosystem. Android is supposed to create a great mobile software ecosystem similar to Apple and its iPhone environment.

For those who were holding out on buying an iPhone could take a shot at this one. But we doubt any iPhone owners out there would switch. iPhone 3G is just too good. Well we will see once we see adoption of the new Google phone. This is supposedly running the Google’s new shiny Chrome browser (actually Chrome Lite – mobile version of Chrome).

Some key Android features : openness – developers can develop application extensions to Android using its publicly available API. The G1 comes with maps, e-mail (gmail), instant messaging, music player and a camera. There is an Android Application store similar to the iPhone App Store. Google’s USP against the iPhone seems to be openness and willingness to let developers work more freely with Android as compared to the Apple’s tighter control over the iPhone application ecosystem. It could be a double-edged sword. Openness has its pros and cons. As to iPhone App Store, since its launch in July, users have downloaded more than 100 million applications for the iPhone and the iPod touch. Google has run Android developer challenge contest to get developers to create more Android apps.

For more details on G1, go to T-Mobile G1 site.

Welcome to the world of superphones. Superphone – a term informally being used for the ultra smart and ultra sleek new smartphones. This is a new world. We love this, finally mobile world is coming around with some cutting edge device and software innovation. Next we await the BlackBerry Bold – RIM’s answer to the iPhone and Google phone.

One thing is for sure. The new superphone world belongs to Apple, Google, RIM and Nokia. What about the rest ?

From a mobile OS perspective, there is a fight between Android, iPhone, Symbian, Windows Mobile, LiMo etc. Talk about fragmentation. Alas, if only developers could find a truly universal Mobile development ecosystem but without a PC-kind of monopoly.

MT

Want a Blackberry with flip form factor…here it comes…

I know quiet a lot of people who have always wanted to buy a Blackberry smartphone but but they always go for phones with flip form factor. And, I recently saw just that…BlackBerry Pearl 8220 smartphone, which RIM touts as the first BlackBerry phone to come in the flip form factor.

But, Indian buyers will need to wait as it will take time to reach here as currently it’s exclusively for T-Mobile.

It’s looks are as impressive as it’s features. Some of the key ones are:

This quad-band EDG based smartphone features 2 high-resolution, light sensing color displays, an external LCD screen and a 240×320 internal LCD, recognition for Voice Activated dialing, voicemail attachment playback, background noise cancellation, speaker phone, Bluetooth, GPS receiver, and a large QWERTY thumb pad.

Software goodies include DataViz Documents to Go software suite for editing MS Word, Excel and Powerpoint files in addition to BlackBerry Professional Software suite and Enterprise Server.

Finally, the Pearl Flip will offer a 2.3 megapixel camera with flash, zoom and video recording.

Impressive indeed.

Vishal

When it comes to technology, late movers often seem to do better..

Businesses always make more profits when they get early mover advantage in the market for new technologies and ideas. Individual/ end users many a times get benefited when they adopt a technology in later stages of its development. Because by then, most, if not all, lacunae would have been filled by the manufacturers.  I sincerely hope that the reader of this post is getting, what I am pointing at…Yes…U guessed it right…I am talking about Apple’s new 3G iPhone…

In India especially, there is a huge market for second hand phones and Chinese duplicate versions. When iPhone was launched first time by Apple, it became an instant hit everywhere around the world. But since it was on costlier side (Approx. Rs.30000+ in Indian currency), it could be afforded only by either business class people or people in high positions in companies. Surprisingly, it didn’t take even months or weeks but just a few days when iPhone came into market with no guarantees or warranties what so ever. These were imports from United States where iPhone was released first. Many people lost huge sums of money in buying these models just in hope that these may work just as good as the original one. There were hacking programs available in market which claimed to break the iPhone lock and make it work on the usual GSM carriers (similar story occurred in China).

And now…here you go…Apple has launched an all new upgraded version of iPhone and that too at less than half the old price (Approx. Rs.8000 – Rs.12500) in two storage versions i.e. 8GB and 16GB capacities. It has come out with more storage, better features and more affordable rates for everybody. Its 3G iPhone…and more

With fast 3G wireless technology, GPS mapping, support for enterprise features like Microsoft Exchange, and the new App Store, iPhone 3G puts even more features at your fingertips.And like the original iPhone, it combines three products in one — a revolutionary phone, a widescreen iPod, and a breakthrough Internet device with rich HTML email and a desktop-class web browser. It redefines what a mobile phone can do — again.

All these features are making the old iPhone users fume as they spent more to get less and now even if they want to resell their models, they will not be able to get even Rs.5000 for the same as the new upgraded 3G iPhone version with 8GB capacity will be just Rs.8000 approx. so why will anybody buy an old one for almost the same price…This justifies the title of this post…

VS

Relief in sight for Indian users of Blackberry

One of the senior officer’s of Department of Telecommunication in India has informed media that “There is no problem with the BlackBerry handsets or services and BlackBerry services are not going to be discontinued in India.” This is inspite of the fact that Research in Motion — the Canada-based maker of the push-mail device — is yet to resolve India’s security concerns.

The issue rose due to recent terrorist attacks in Rajasthan. Indian security department officials had raised an objection on encrypted messaging that happens from Blackberry devices which is being used by terrorist groups regularly for communication.

RIM’s spokesperson in India informed that they are still in talks with senior government officials over this issue but he also said that till date outcomes of these meetings have been positive.

Thus, I can say that many Blackberry enthusiasts in India will now be able to buy the device and fulfill their wishes to be among Blackberry users.

VS