The development of app stores has been beyond anyone’s expectation. The key driver for the development the last 18 months has been the iPhone app store but similar concepts have been around for many years with services, such as Handango and GetJar, as well as many operator portals. The overall numbers are really impressive. There is today about 115,000 iPhone apps and more than 100 million downloads a month (incl. iPod Touch), while the second largest app store Get Jar, serving all types of mobile phones, has about 60,000 apps and 50 million downloads a month.
With close to 40 million iPhones sold the number of apps downloaded per user is on average quite high. Some claim that the number is as high as 11 apps per month and user, but I’m not really sure they got the math right. Anyhow, is this a gold mine for the developing community? We do have success stories but the app stores are now quite crowded. On average each app is downloaded about 1000 times a month. But looking at the usage patterns for free apps presented by Pinch Media only about 20 % return to the app a second time, only 5% return to the app after 25 days and after 90 days only 1% still use the app. Keep in mind that these numbers are all averages. Also taking into account that the top 1% of the apps in the larger app stores probably account for 90% of all downloads, then the numbers become quite disappointing for the majority of the apps not making it to the top. Most apps do probably not have more regular users than, well, those involved in developing them. Sad but probably true. The numerous launches of app stores by device manufacturers and mobile operators do expand the market but it also becomes quite fragmented. All different operating systems and specific demands result in that each app have to be made in many different versions, driving cost even further.
The likelihood that a new app after some initial attraction ends up in a close to zero down load frequency and that those initially downloading it stop using is, despite the over all success of the app stores, quite high. The app stores are turning into app graveyards for most new apps, buried under piles of more attractive apps and with very little possibility to gain visibility. Gaining visibility is a marketing issue but the limited stickiness of the services may indicate that most of the apps should never have been made as they do not meet a specific customer demand. Services with a limited but loyal segment are fine but with false expectations on future take up and revenues the cost levels are usually far too high for the development.
The term app graveyard has been used for clusters of apps that were not approved and never made it into the so attractive looking gated communities of the app stores. The question is if they actually have a better chance of succeeding outside the fence. The app stores may be fantastic and one of the most disruptive elements seen for quite a while within the mobile sphere, but please remember that they still can’t sell services that are not really marketed, nor sell services that actually do not meet a customer need.
Microsoft announced a few days ago their launch of OneApp. OneApp is “a new software application that enables feature phones — commonly found in emerging markets — to access mobile apps such as Facebook, Twitter, Windows Live Messenger, and other popular apps and games.” Microsoft thereby aligns with the basic horizontal operating system independent structure of a UMI. The primary focus is on less smart phone penetrated emerging markets and the distribution will be through operator partnerships. First out is Blue Label Telecoms in South Africa.
It is very positive that Microsoft moves into this space and it will be really interesting to follow the progress. The trend that mobiles will rely more and more on cloud computing is clear and clients will be the tool to make this happen, even if they are quite complex to manage. It’s not really clear how Microsoft intend to play this game mid to long term but so far this UMI approach seems to miss some key elements of which the most important are that the services need to be operator independent to reach the full potential and that it has to be very simple and cost efficient to create applications for true long-tail content and services to become available. The business model would be interesting to know more about to evaluate the service fully. OneApp is part of Microsofts Unlimited Potential initiative aiming to “enable social and economic opportunity for everyone”. This is of course a good cause, but what is really the strategic agenda behind OneApp? Given the history, there will always be the suspicion that Microsoft this way try to create a virtual mobile operating system.
The launch of OneApp by Microsoft clearly shows that the UMI approach now gain acceptance and will be one very important way forward overcoming the present limitations of the mobile phones. We’ll follow this development with excitement.
Most retail chains and brand owners today investigate mobile marketing as a new way to improve customer interaction. A number of players offer different platforms for different elements of mobile marketing. It is not easy to understand pros and cons of the different options and what’s best for one company may be quite wrong for the other. There are some key questions to be answered before it’s possible to know what may be the best solution in a specific case. These questions are:
- What do we want to achieve on the market?
- Where are we now and what’s missing to be able to reach the marketing targets?
- How mature is my company and the targeted customer segment regarding digital marketing and mobile devices?
- How glossy and rich does the mobile experience need to be?
- How much can I allow this to cost per impression/interaction etc?
- How flexible should the chosen solution be, would I like to add new features and services?
The table compares different solutions for Internet based mobile market communication. The solutions compared are: web – just let customers brows the existing web site over the mobile; WAP – mobile format site based on WAP; own client – separate java client to be downloaded as any java client; app – application for an app store; UMI – integration of existing web services to a UMI platform. The properties listed are: user experience; no need for a client to be down loaded; look and feel; own development needed; initial cost; operational cost; flexible and can easily be upgraded with new functionality; time to market; addressable market; distribution efficiency – how easy is it to get customer to get started using the service.
As can be seen in the table there are some key considerations to make depending on the ambition level and the expected value of mobile marketing. My key point is of course to illustrate the strength of UMI compared to other alternatives. Whether UMI is the best option does however depend on what you would like to achieve. I feel that many companies rush into exploring the possibilities with mobile marketing without first really analysing what it is there to accomplish and how it supports the overall marketing strategy. I strongly recommend all to view mobile marketing as one out of many components in the marketing communication mix and also that all options are carefully considered to avoid unnecessary costs and getting stuck in a solution that is impossible develop further to meet future needs.
At 3GSM World Congress in Barcelona last week a number of initiatives were announced to meet or copy the success of the iPhone.
There are new fantastic UIs, big touch screens and each device with an app store. Looking at the agendas of operators, device manufacturers and games providers etc., I can conclude that many would like to capitalise on their position and now see the app stores as an interesting way to be part of the new mobile trend.
But don’t they miss part of the point here? Is it just to set up an app store and dress the old phone in a new nice UI/touch screen rapping?
If we extrapolate the present trend we end up in a situation with a lot of app stores but does this really meet the needs of the end user and the content providers?
Do we expect end users to accept that whatever apps I buy and install they are lost when I change device manufacturer?
And what about the content providers, do we expect them to make one version of there application for each different operating system?
Even a player like Facebook, (see the clip from Davos) complain about the situation and can’t accept this situation. The new app store hysteria will thereby build yet another barrier for really getting the true potential out of the mobile.
Only few players will have the incentive to be on all these app store and to do what’s necessary to manage this. Then we miss one key element to make the new mobile services valuable to the end user, being that I want to choose my content and applications independently of device brand or operator.
As all these app stores will be based on a number of operating systems, this will for sure limit the application and content richness.
To really get the true value out of the mobile more or less the full long-tail of content has to be available and to make that happen it has to be easy and efficient for content providers to get their stuff out on all mobile platforms.
There is a need for device and operator independent solutions to really unleashing the potential, but unfortunately the present development seems quite the opposite.