Mobile Applications: Hitch Your Wagon To The Star!

Posted in Marketing & Strategy Articles, Total Reads: 1784 , Published on 24 November 2012
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In its "21st annual words of the year" vote, the American Dialect Society, voted “app” (noun, an abbreviated form of application, a software program for a computer or phone operating system) as the word of the year for 2010. More important than the launch of Android on 6th November 2007 was the launch of the Google led consortium of 84 companies (mobile operators, handset manufacturers, semiconductor companies, software companies, and commercialization companies) called Open Handset Alliance; the members swore not to produce phones that run incompatible versions of Android.

So, why is everybody so eager to board this Mobile Applications Wagon? Where did it come from? What it has in store for everybody and where will it take us? These are some subtle questions this article investigates.

Image: FreeDigitalPhotos.net

BREW was the first mobile application platform with an app store (Qualcomm, 2001), but the paradigm shift from Nokia during the 1970s when it first introduced the “snake” on its phone to the “Angry Birds” has happened through various intertwined levels, that we can never tell when the first app came. Back when we were still toiling with first generation mobile phones, the trade secrets were closely guarded and the phone software was developed in-house.  When customers asked for more, internet came as the medium to deliver. Java and Flash websites were launched but could not do justice to the browsing experience on mobile phones. WAP came as the answer; this was the point when application development was brought out of the closets of the mobile companies.

But WAP could not be customized, there was no built-in billing mechanism, and the consumer found it slow and frustrating. Labeled as WAP, “Wait and Pay”, it soon became extinct. That was when it happened, the customer wanted more than just “calling” facility in his phone, memories got cheaper, batteries got better and PDAs started running on versions of common operating systems like Linux and Windows. The traditional desktop programmers could suddenly develop on mobiles also. The mobile phone manufacturers realized that the in-house application development model is obsolete and they need to go all out for developers. Enlightened, they came up with proprietary mobile platforms. Garnet OS, RIM Blackberry OS, Java ME, Symbian OS, Apple’s iOS (2007) and Android (2007) were thus born and led to “Platform wars” that we still are an audience to.

So what do the Mobile Application Software bring on the table? Well let’s look at India, a poor country with lot of coders, lot of consumers and you let loose an application programming platform and on top of that let people make money out of it with virtually zero start-up cost, think of one reason why this won’t work. The ecosystem in India seems ideal for app developers, HTML 5 is here for seamless integration of services, 3G has been launched for data transfer without any hiccups and 4G is already on the cards. MIT, with Google recently concluded a short course ‘Accelerating Information Technology Innovation’ in which some 30 IIT Bombay students were trained in an Entrepreneurship course based on Mobile Applications. In just two months, seven start-up pilot ideas came up! The Application business has also given birth to various new revenue models in Mobile world, freemium model and virtual goods are additions to the already existing revenue models like subscription based, advertising, paid applications and offer and survey models.

Consumers see their demands of speed; reliability and “I must see only what I want” meet in Mobile Applications. Getjar predicts that global App Economy will hit revenues of $ 17.5 billion by 2012. As the “Dollar 1 apps” flood the markets, this economy is betting on scale with pricey applications only being at the tail end. A recent Nielson survey finds that if Smartphone users in India were a country, it would be larger than Australia. Android rules the roost in India with Indians spending an average of 2.5 hours on Smartphones daily. Well this consumption has really brought smiles on the faces of lot of industries. Marketers and advertisers have inundated the markets with innovative adverts that can be pushed into a mobile phone and not annoy the customers as bulk SMS used to.

Aircel recently adopted “BLYK”, via which users get free talktime and SMS for seeing advertisements on daily or weekly basis. The question still remains though, “How to be non-intrusive yet effective?”Banks have boarded too, with transaction on M-banking costing one tenth of what it would cost in a branch. Even bollywood refuses to stay behind, Ra.One released a mobile game as a pre-launch gimmick to make place into kids’ minds. Every industry that you can think of from the most rural India to the most modern finds space in the mobile application domain. 58% of the Fortune 50 companies have mobile applications. The giants are actually engaged in developing mobile application strategy for their firms. There is hardly any use you can’t put an app to.

Talking about why people buy apps, here is fun fact, Istore has an app, “I am Rich” worth $999 and it does nothing! The screen only shows a glowing red gem. While the application was available, eight people bought it, at least one of whom claimed to have done so accidentally. Six US sales at $999.99 and two European ones for €799.99 netted between $5,600–5,880 for developer Armin Heinrich and $2,400–2,520 for Apple. So much for a status symbol!

With voice tariffs going down in the basements the service providers hope to replicate the success of Apple’s Istore. In 2010, within 20 days of its launch and with next-to-nothing publicity (other than online) Atul Bindal, President, Mobility, Bharti Airtel claimed over one million downloads. As more and more users switch to Mobile applications from basic mobile internet; this translates into increased data usage and thus more dollars for Service Providers. Mobile Applications have brought about a change in the whole concept of mobile phone as a product, which was once positioned in consumers’ minds as a device to make calls, then it became a status symbol, now it seems mobile phones are data transfer devices and the money lies in data transactions for the service providers and they can only encourage that by making available customized apps for every transaction their consumers want.

Let’s take it forward from the Platform Wars to look at the future. BREW is definitely a dinosaur. A study by Vision Mobile finds that Symbian developer abandonment rate has accelerated from 39% of developers last year to 52% in 2012. Clearly, developers heeded Nokia when it unambiguously declared it would bet its Smartphone business on Microsoft. Blackberry is also in trouble with its USP of fast messaging, irrelevant with what Android and iOS have to offer in terms of communications. This does not come as a surprise the RIM experienced 25% decrease in year on year shipments in Q1 of 2012. It can also be observed in India that the final battle will be Android vs Apple; rest will either join one of the forces or cease to exist. It is also yet to be seen what the developers have to offer in the space of Enterprise Applications, a field that has recently picked up pace. Keep an eye on the names like Affle, Twist Mobile, Nextwave and other early adopters.

Let’s end this article with a food for thought. This one comes from Chris Anderson, Editor-in-Chief, Wired.

You wake up and check your email on your bedside iPad — that’s one app. During breakfast you browse Facebook, Twitter, and The New York Times — three more apps. On the way to the office, you listen to a podcast on your smartphone. Another app. At work, you scroll through RSS feeds in a reader and have Skype and IM conversations. More apps. At the end of the day, you come home, make dinner while listening to Pandora, play some games on Xbox Live, and watch a movie on Netflix’s streaming service.

You’ve spent the day on the Internet — but not on the Web. And you are not alone.”

Will applications kill the web?

This article has been authored by Maheshwar Pathania from SJSOM, IIT Bombay.


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