Posts Tagged ‘application store’

Confused Consumers at the App Store

June 3, 2009

FierceMobile seems to be on a kick these last few days indicating that consumers will be confused by all of the applications available to them. Sue Marek went suggested that carriers set up their application stores and keep their policy of only carrying applications that they have tested and approve of themselves. (Click here to read the story.) 

While there is certainly some rationale behind this thought, with 25,000 applications for the iPhone, who can tell what is good and what is garbage at first blush? However, I am a firm believer that there are very few business models and channels that are truly new – just variations of something we have seen before. This allows for us to learn from history (or other market places) and apply those lessons here. 

First, lets look at the history of mobile applications. Carriers have proven in the past that they do not have the resources or processes to foster a vibrant application ecosystem. Before the iPhone, how many mobile phone subscribers actually downloaded an application to their phone? Why? There were no really good applications to download and the price points were out of alignment to the value provided. Because of restrictive carrier policies, there was no good way to modify application pricing plans without a lot of new contracts and negotiations.

We can also look at other industries to see how they have tackled comparing products on-line before purchase. If we look at shareware, applications written by independent developers. Pricing models are either free, ask for donations to the project, or pay money for an unlock code that will unlock the application after a trial period. Hmmm, sound familiar… There, users provide ratings for applications and users can easily search for applications and sort based on user reviews and number of downloads. Good applications quickly rise to the top. I buy a lot of items from Amazon.com precisely because of the user reviews.

Sue does point out that carriers typically have the more recognized brands in the mobile space. Subscribers necessarily have the relationship with carriers and they can provide clarity for consumers on certain applications. Certainly any application that itself can access your billing or demographic information from the carrier records should be approved by the carrier. I think there is also a place for sponsored applications just as consumer products pay slotting fees in retail stores. However, they should not restrict applications as they do now.

I do agree with Andrew Seybold’s suggestion that application developers provide free trials of their software to consumers. This will help encourage trial, and if they have developed a good application, spur purchase. Applications that allow trial on a PC such as mPowerPlayer are even better and should be common for all mobile application stores.

Over time, application stores that allow for easier searching and user reviews will rise to the top and others will go away. Just like on the Internet, Amazon rules and no one remembers Buy.com…

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Life After the App Store – Billing System Integration

May 13, 2009

Here is a great under the radar development . . . Direct access to a carrier billing systems by developers. Sounds like a snoozer but here is why it is a major deal.

Application stores offer two great things for application developers – access to consumers and an easy vehicle for consumers to pay for their purchases. This is great for one time or subscription services that have a single price point but does limit the ability for innovative new services with different business models.

Now comes Vodafone. Yes, Vodafone. They are doing something that wireless carriers should have done about five years ago. Vodafone is releasing an API to provide developers with direct access to their billing systems. (Click here to read more.) Developers can now create applications with just about any business model. Want to get Slacker charged to your phone, no problem. Want a mid-subscription that allows you to listen to a limited selection of songs for half price, no big deal. Want to purchase a customized Ashton Kutcher designed radio station, click on a button within the app and it will be charged to your phone bill.

Clearly there will be billing reconciliation and privacy issues that Vodafone will need to deal with. For example, will devlopers be able to access demographic information from the billing system? Does Vodafone have the processes in place to approve developer access?

The opportunities, however, are enormous. I can’t tell you the number of stories I have heard from carrier sales reps who want to sell applications that their clients want to buy but that they could not get on the list for the billing system group to add a code. This could be the beginning of true micro payments using your mobile phone.

Vodafone’s announcement has global impact because of another under the radar partnership that was announced a few months ago. Verizon Wireless, Vodafone and China Mobile have developed a partnership to create a single developer platform with common widgets to facilitate application development and deployment across all of the carriers. While all billing systems are essentially unique, even if they are from the same vendor, there must be a way to get a common API working across all carriers. (Although companies such as Amdocs have made a living of making billing systems needlessly more complicated than brain surgery …)

What do we owe this carrier mindshift to? Of course Apple and the iPhone. Carriers are now tripping over themselves trying to compete with Apple’s iPhone and iTunes store. Long live competition and Steve – please get well soon!

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Can Wireless Save The Newspaper

April 29, 2009

I can’t help but think of the REM song “It’s the End of the World as We Know It” while writing this post. It won’t be the last posting or article that touts the beginning of the end for the print media industry. Trees everywhere are rejoicing in the fact that their brethren will soon be safe from the newsroom presses.

The recession has hastened this demise as advertisers pull back from all sorts of traditional printed advertisements in favor of digital formats. It is as if media buyers had a Gilligan’s Island moment when a coconut fell on their head and they suddenly realized the lack of effectiveness of print media. Junk mail volume is down (yeah) but so are advertisements in newspapers and magazines.

Now I am not bashing online business models, I think they are valuable. I am also not bashing the move to digital media, this is an important evolutionary step that will make the media industry better in the long haul. What I am pointing out, however, is that there is a missing link for the convenient consumption of the written word that makes it convenient to receive and read.

I pointed out to the editors of PC Magazine that I typically read their magazine cover-to-cover while in bed at the end of the day. I tried the Zino reader on my notebook in January when they switched to all digital delivery and made it half-way through. I haven’t read a word of any issues since.

The missing link is a decent wireless device and interface that makes it easier to consume the written word. This may be the long awaited “ebook” but even this category has a lot of groundwork to cover in order to be the replacement of the printed newspaper or magazine. Amazon.com has certainly injected excitement into this category with its Kindle product. It is a nice ebook reader that is bundled with wireless networking provided by Sprint. It allows subscribers to purchase books on-line and have them automatically downloaded to their device, many times within seconds.

The downside is that it has a steep startup cost ($360) that puts the device out of range for most readers. (Hey Jeff B – if you are reading, I’d love to review one…) Reviews also indicate that the interface is also not there for magazine reading. (For one thing, no color.)

Magazines and newspapers also need to rethink the way that they deliver content. Zinio does a great job of recreating the page turn of a magazine on the PC, but if you don’t have a page to turn, do you really need that experience? I don’t think the typical web experience is what we need either. There is a certain comfort with well organized sections that are visually navigable. (Hmmm, maybe the iPhone interface can help out here?)

Wireless push delivery is also a great idea here. Not having to wait for content to download allows the e-Media reader to be read offline. This is helpful when you have poor coverage or on a plane where you have no coverage.
Industry players are starting to circle around this space and I expect to see a lot of advancement. Amazon just purchased Lexcyle, an iPhone e-book reader application in addition to developing on their own Kindle for iPhone application. I had a great conversation with Zinio who was in the Qualcomm booth at CTIA. Apple is rumored to be working on a Media Pad (product design team, please read my post on Star Trek getting it right!) which could be a Kindle killer.

I guess that REM song was the right one for this post. “It’s the end of the world as we know it… but I feel fine.”

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Mobile Application Stores For All

April 7, 2009

I’m back from CTIA and had a great time. The show was much smaller this year than in the past but to some extent, that made it easier to network. (As one of my friends used to say “all the tourists have gone home.”) There was a lot of buzz around the shift to 4G – the next generation of wireless networks that promises higher speeds and capacity.

The real story of the show, however, was the abundance of mobile application stores. As with just about any change in the wireless industry over the last two years, Apple started the ball rolling with the addition of mobile applications to the iTunes store. This made it ridiculously easy for mobile application developers to reach consumers and even easier for consumers to download mobile applications to their phone. Gone are the two years of networking and cajoling of carriers to make your application one of a few dozen that appear on their “deck” of approved applications. iTunes literally has thousands of applications.

Device manufacturers realize that they were losing market share to Apple (who has gained 26% of the smart-phone market in less than two years!). It was no longer up to the carrier or the handset manufacturer to add functionality to their phones, they can focus on what they should do best, create a great platform, and allow developers to add functionality.

At CTIA Research In Motion (RIM) launched AppWorld for the Blackberry. (Download it by pointing your mobile phone browser to http://www.blackberry.com/appworld.) In fact, most of their booth was devoted to featured application developers. While some phones were about, there was little fanfare around the Bold or the Storm, their flagship smartphones.

Additionally, Samsung, Microsoft and Motorola announced their own application stores to join Symbian and Nokia’s application stores. To be sure, there will be a great deal of overlap between these stores and it will open a quandary and potentially a great opportunity for application developers.

Ironically, while Apple has broken down the Chinese Wall that has blocked application developers from getting their applications to consumers, it has also taken some heat for blocking some applications (http://news.cnet.com/8301-13846_3-10041187-62.html).  With several stores having the ability to sell the same products (e.g., Samsung, Motorola and Microsoft will all sell Windows Mobile applications) will there be alternative channels for applications blocked from one store. I asked the folks at Samsung if they would sell applications to non-Samsung phones and they didn’t appear to have thought about this scenario. The marketing manager I spoke with  indicated that there wouldn’t be anything blocking such sales.

Will there be a market for specialty stores (only applications for outdoors (REI Mobile), mobile photography (Ritz Mobile), etc. ? How many application stores can we handle? Interestingly, the mobile application stores can be quickly set up and be more of a marketing expense then a true money making operation. A simple payment mechanism, some advertising, a database, and automated customer service and shazam you are in the mobile application store business.

The net-net good news for all – it will be easier for developers to create and deploy applications for mobile phones. Additionally, the abundance of stores will lead to price competition to get higher revenue shares for developers. Some stores are already promising 70% of the application revenue for developers. This is a huge shift from developers getting 30% in some cases with applications sold through carrier stores. Consumers and businesses alike will appreciate the abundance of mobile applications for just about any need.

The net-net bad news – developers will have to deploy their applications across multiple stores to reach the market to have maximum exposure to their audience. They will also have to work to differentiate their applications for the consumers as thousands of applications flood the market. For consumers there is a double downside – tons of applications with most of them junk will make it hard to separate the wheat from the chaff.

The second downside for consumers – the months of testing that carriers used to put applications through before launch to ensure a positive interaction are gone. You will be lucky of most of these application stores load an application to see if it starts much less have extensive testing. Additionally having multiple applications loaded on your phone will lead to many unintended interactions in the near term. This will go away as mobile phone operating systems get more powerful, but be ready to reboot your phone ever day or two in the short term.

All-in-all a great show and I will be talking about some of the cool applications that I saw while there over the next few blog posts.

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