Mobile Platforms, Online Travel

Mobile Gems At PhoCusWright 2010 ?

A few weeks ago, I’ve attended a very vibrant PhoCusWright conference. With over 1,000 attendees, an upbeat economical (compared to 2009), and a Tnooz “Appy Hour” reception on the first day, I expected mobile to be a key topic. Frankly I was very surprised when out of the  34 Companies presented at the Innovator Summit – only three were directly mobile-focused – less than 10%.  Maybe mobile is not that relevant? Or alternatively is it a business that for some reason has to be owned by incumbents? Well, on that last point, we got the answer on the last day of the conference, when Expedia’s focus on this space was demonstrated through its acquisition of Mobiata, and in the final executive interview with Priceline’s CEO Jeff Boyd, who stated that “If you look at the rapid proliferation of smartphones, tablet computers… that’s the most exciting thing to have happened on the Internet… and represents a unique opportunity for travel… there’s a huge opportunity to try and capture the value from the change in behavior that results from this technology…“ With these statements in mind, here’s my take on the alleged mobile innovators who presented at PhoCusWright – and some thoughts on where mobile travel is going. In expressing these opinions I am naturally biased – after all, I’ve been doing mobile travel for over 11 years now, and probably generated more revenue and users than all of these companies combined…

Movitas – “The New Guest Operating System”
Due disclosure – I am a big fan of Keith Forshew, their CEO. I think he’s a class act. Movitas essentially build property-specific mobile apps for resorts, hotels etc. Their perspective on this is that the mobile device is a great way for the property to communicate with the guest, and by providing a hotel-specific app that covers everything from check-in through communications between guests and staff and between guests themselves, access to everything from restaurant menus to amenities down to using the hotel switchboard to place calls routed from the smartphone.
I agree that hotels, and especially resorts with many services and amenities, would do well to offer their own mobile apps / websites. People are coming to expect that. But the assumption that a guest (and old dog) is willing to learn a “whole new operating system” (new tricks) every time he is visiting a new hotel is simply unfounded. Simply getting guests to download your mobile app is not trivial.  Getting them to learn how to use it to do twenty different things – including things for which they already have well-established mobile habits (e.g. telephony), is plain unreasonable. So if I’m a property-manager in need of a mobile-app, I may well look at Movitas as a vendor – they do have a good “template” to start from. But I will avoid much of the high-flying tech-for-tech-sake features they propose. Movitas will do well to take some of their ideas and try to ground them in existing mobile user habits – not build proprietary experiences (easier said than done).

Goby – The Local Mobile Search Engine
I have to say I like the area these guys are pursuing. Hotels / Cars / Flights were done time-and-time again, while no one has really cracked open the in-destination market, especially with regards to activities & services (A&S). I also think they’ve built a compelling mobile user experience, and they seem to have amassed a whole lot of content.
However, the challenges ahead are still significant. First & foremost, one of the biggest issues of the A&S market is the lack of an easy monetization infrastructure. Those dozens of thousands of disparate businesses, each with a different “booking model” do not tap into one system and are not all (or most) part of some wide-scale affiliate program, which makes monetizing the traffic (customers) you send to them extremely hard. In an adjacent space, OpenTable did that by building a significant sales-force on the ground and signing up restaurant after restaurant by offering them software they actually needed in order to lure them in – and ended up monetizing mostly through the subscription fees for that software. And restaurants are generally comparable which simplifies the software and the user experience. A museum and a white-water-rafting vendor – not so much.
The second challenge is again getting traction with users in the face of established habits. Google Maps and Yelp are slowly becoming platforms for solving the “what to do next and where” challenge for consumers in their home-town. These consumers may well prefer the brands and user experiences they know when they’re traveling too. TripAdvisor is already trying to chase Yelp, I wouldn’t be surprised if Goby is a target for them – at least in order to progress the user experience faster and present a more compelling consumer story.

Kony Solutions – Write Once, Run Anywhere?
Again for due disclosure – in 2001 I led the creation of a platform called X-Mobile, an XML-based, mobile, loosely-connected rich-client creation environment. It was deployed by Israel’s largest bank for banking application, and Israel’s largest dairy vendor for a supply-chain-management app. Heck I even wrote my MSc. thesis on the subject. So I am biased.

The challenge of developing multi-platform mobile apps is real. This is a market where not just the #1 but even the Top-3 platforms change every 3 years –

  • 2010: iPhone, Android, BlackBerry
  • 2007: Symbian S60, BlackBerry, Windows Mobile
  • 2004: Symbian S60, Windows Pocket PC, Symbian UIQ

Furthermore the different device form-factors themselves are varied – big screens, smaller screens, keyboard, no keyboard etc. If you’re a consumer-facing company, and you decide you need an app – you have a big dilemma. We discussed that at EyeForTravel and I followed up with a more detailed review. So I buy at least into most of the arguments in Stewart Elliot’s FUD campaign.

So – is Kony the solution? Unfortunately it’s not that simple. This is a hard problem to solve at its core. The differences between the platforms are supposedly the manufacturer’s “differentiators” – the reason someone prefers an iPhone 4 to a BlackBerry Torch or a Motorola Droid X to a Samsung Fascinate. They have a good reason to maintain the differences, so the common way to build a platform that “magically bridges them” is to dumb down the capabilities to the platforms to a lowest-common-denominator. This means many things that can be done in the “native” platform cannot be done in that “write once” platform. So do you need those things in your mobile travel app? If you do – Kony might not be good enough. If you don’t – they may be overkill anyway.

Furthermore, the “right way” to build such a tool is one where the platform owner (e.g. Google Android, Apple iOS) is the one incentivized to have that tool work well on the platform. Otherwise the tool will break every time there’s a new platform update or product. That usually means establishing a standard, and in this domain the relevant standard seems to be HTML 5. HTML 5 allows rich web apps to run in the browser on all these devices. Kony is aware of that and seems to be running a hybrid approach of HTML 5 screens running within a Kony “meta-client”.

So what Kony really is, from my perspective, is a consulting company with expertise in serving travel suppliers, and a “secret sauce” in the form of a proprietary framework to build these hybrid applications in. So as in Movitas’ case – if I’m a travel marketer looking for someone to build my next mobile app, I’ll definitely solicit a proposal from these people. If it’s a non-trivial app, it’s likely they will be able to expedite it to the market and the cost may even be competitive. But assuming they will displace standards, or give Adobe (for instance) a run for their money? Don’t bet on it. An if ultimately what you wish to built can and should be built as an HTML 5 mobile website, getting locked into their platform can be a big mistake in the long term.

So – what does this mean for the industry?
From the low attendance of mobile travel innovators and also from what these companies actually do, I get the feeling the zeitgeist is that mobile travel will be left in the hands of the incumbents. Whether it’s established travel players – e.g. Expedia (with some help from the Mobiata team) or potentially mobile players (Apple’s iTravel? Others are moving too) or most likely real platform players – like Google Maps. For all of these companies this is a high-stakes game, and they do seem to realize it. In the absence of disruptive upstarts, they’ll just keep trying and gradually improving their offerings in the space, until they hit a gold vein. At this stage I think Google has the most demonstrable ability to do it, and if no one else builds a better mouse-trap, Google Maps / Local Search will be the in-destination tool of choice for travelers. With 80% of purchasing decisions made in-destination (according to QuickMobile’s Patrick Payne), they stand to make a lot of new revenue there. And with the ITA and Google Places assets progressing, they stand to be the dominant player in mobile pre-trip planning too.

Mobile Platforms

If Steve Jobs Kept A Pet, It Would Be A Hamster

The App Store’s Hall-Of-Fame: Making It  Worse For New Developers

Just last week, I wrote a piece explaining the detrimental effect that the Top-25 charts have on new apps. To make matters worse, in a move just out of Yahoo’s books (circa 1998), Apple announced the “Hall-of-fame” – an “all-time top-50 chart” that seems to be part quantitative, part curated. What it means for new developers is that old, established, previously successful developers have yet another advantage now – one more search mechanism that steals what limited customer attention there is, and deflects it back at existing incumbents.

Is this a good move from a consumer’s perspective? On the surface, it is – now the consumer has an way to find out “what everyone else has downloaded” (the Hall-of-Fame) and “what everyone else is downloading” (the existing Top-downloads list).Everyone who gets an iPhone can quickly get up to speed with what’s best out there.

But what it really does is turn more and more of the attention in the direction of fewer and fewer applications, ultimately stifling innovation. If the Internet was managed the same way, we’d all have MySpace rather than Facebook accounts, we’d be getting directions from MapQuest, not Google Maps, and this blog would  have been a GeoCities page. To enable innovation, the “long tail‘ has to be long enough and thick enough for some good stuff to emerge – and ultimately displace the people at the top. But if it’s too hard to get noticed, even great stuff will just dry up and die before it is. So no long tail – or a very thin and shrivelled one.

So what comes next?

I have no idea. I think new iOS developers will find it even harder to penetrate that market. And incumbents will get an even bigger piece of the pie.

Where should app discovery be headed?

In my mind – probably something similar to the way Google displaced Yahoo. An effective Search mechanism, based on keywords possibly. It should study how people relate to apps, which apps are downloaded by whom, rank relationships between apps and users, possibly in an analogous way to Google PageRank, and take into account velocity and current trends, much more than it does historical downloads. A marketing mechanism based on the keywords search would make much sense too.

Any better ideas out there?

Mobile Platforms

Is App Store Success Closed To New Developers?

Since DiscoveryBeat 2010 (of which I’ve written here), I had a few discussions with relatively successful app developers about the state of that marketplace. And there was a recurring a theme in some of them. It had to do with how the app store is becoming packed with consumer brands and / or apps with huge marketing budgets behind them, to the point that new entrants are unable to penetrate it.

A friend who runs a very successful finance app company put it this way – “We lucked out by going into the market early… nowadays the category is crowded by people like Bank of America, Wells Fargo, Chase… you name it. I couldn’t possibly compete in that market environment. And there’s no effective way to promote on the store…”. A quick examination of the free Finance apps category shows that 20 of the top-25 are indeed key finance brands – from Wells Fargo through PayPal to Mint.

On a similar note, a couple of weeks back I chaired the mobile track at a travel conference, where one of the speakers showed a couple of slides about the Travel category on the App Store – “then” and “now” – Top 25 Travel Apps in 2009 vs. 2010. In 2009, 10 out of the 25 were established, “non-iPhone” brands – from AAA through Expedia to Google Earth. In 2010 it’s 15 of 25. And with many of the new entrants airlines and hotel chains, where will be a year from now, when virtually all of them will have apps, which they will promote on their websites?

Why is that such an issue? According to Tapjoy’s Lee Linden (quoted in my post here), 80% of downloads on iTunes are driven by the “Top Downloads” charts. So out of an alleged 250,000 apps, you have a few hundred (~25 x number of categories) who get 80% of the downloads. A long tail, with a very fat head. And very slim pickings if you’re not in those “Top Charts”.

So key point #1: As the Top Downloads charts fill up with established brands, it becomes very hard to get and maintain such a position for a (non-branded) mobile app developer. i.e. “Get Discovered Consistently”

How is this different from the web, you might ask? In a few ways. The web is similar in that 80% of discovery happens through one interface – Google. So Google is the equivalent of the “Top Charts”. But Google manages millions or more sites. Not a few hundred. If you will, the App Store is the equivalent of Yahoo circa 1996 – and even then Yahoo had categories, sub-categories etc. etc.

Which draws attention to another point – search. If we look at the Finance and Travel categories again, here are the apps that do not include a major consumer brand, from both:

  • PageOnce Personal Finance
  • Expense Tracker
  • PageOnce Bills
  • Ace Budget Lite
  • QuickTip Tip Calculator
  • NYC Way
  • WiFi Finder
  • Poynt
  • Cheap Gas
  • Happy Hours
  • Tripit

Notice the commonality? Except for 2 cases (ok, 2.5), all of them include the actual function as part of the name, or in fact the name IS the function – e.g. “Cheap Gas”, “WiFi Finder”, “Expense Tracker”. So is “Expense Tracker” the best expense software out there? Not necessarily. But it’s the one getting the most love out of the App Store’s simple search function. Users looking for cheap gas go into the App Store, type “Cheap Gas” into the search box, and find… “Cheap Gas”. What if your gas is even cheaper? Sorry. Not so many people search for “even cheaper gas”…

key point #2: Simple keyword search is the main driver for the rest of the top-downloads. And the first thing searched is the app’s name.

…and yet again – if you Google (or Bing for that matter) “expense report” or “wifi finder” – yes, www.expensereport.com did have an initial advantage, but since then the search mechanism has evolved quite a bit. Try.

Bottom line: The design of the App Store’s “Portal” and “Search” mechanisms are pushing that marketplace towards a sort of static state – where established consumer brands dominate, and some early movers with generic product names managed to get some shelf-space too. Without significant changes to these experiences, it is going to be very hard for newcomers with mobile-only plays to get into the charts.

My next piece will probably be about some of those “alternative app discovery experiences” – AppsFire etc. Stay tuned.

Mobile Platforms, Online Travel

Mobile Travel Lessons from EyeForTravel

 

Last week, I had the honor of moderating the Mobile in Travel track at Eye For Travel TDS Chicago.

With presentations and panelists from fifteen different companies, the amount of experience and hands-on knowledge was hard to replicate, and hopefully was useful for the audience.

 

Given the nature of such events, sometimes after listening to so many people over so many hours it is hard to recap everything. Here’s a run-through of the main points, as delivered by the speakers and discussed in the panels.

 

The Time For Mobile is NOW!

This fact is was demonstrated in two different ways by two very different presentations – Jared Miller from Continental showed the traction generated with the brand-new Continental iPhone app – within weeks of release the application was providing services to dozens of thousands of passengers and generating significant ancillary revenue. Tripit’s Gregg Brockway took the 30,000 feet approach, presenting mobile as part of another wave of change which will change whole industries, and which you should prefer to ride – rather than be crushed by. According to Gregg, the interoperability between current offerings, mobile and social capabilities provides for a new Traveler-Centric service approach. Similar thoughts were reflected by Max Starkov of HeBS in his talk about the “hyper-interactive travel consumer”. This is an opportunity for disruption, which could come from start-ups, incumbents, or companies not traditionally involved in travel, who decided to step in (esp. mobile giants).

 

… A video recording of Gregg, Max and Chris’ session is available online here.

 

Mobile Creates New Touch Points With The Customer

Jim Davidson of Farelogix moved the audience with his question – “What is the first thing that happens once an aircraft touches down?”

The answer – hundreds of cellphones are turned on all at once. The potential for revenue-generating or otherwise value-generating interaction with the arriving passengers right there and then is easy to understand. It is totally feasible to deliver relevant content and transactional opportunities at this time (to wit – it is a feature of WorldMate on BlackBerry). Many such examples exist, based on location, context and immediacy. Jim predicted that “in 2012, 50% of all ancillary transactions will be made on mobile devices”. While this may sound like a tall order, Jared from Continental presented a chart showing that weeks after their iPhone app was released, check-in transactions on iPhone were generating more ancillary revenue than on any other medium (web, kiosk or mobile web). In the hotel domain, similar data points are emerging.  Tony D’Astolfo quoted a Priceline report stating that 82% of their mobile customers book their hotel within one day of arrival – compared to only 45% who do it on the web.

 

The Platform Story Is Complicated – And Will Remain So

It’s a complication from multiple aspects – first, the multitude of different mobile platforms (iOS, BlackBerry, Android etc. – see my previous post) and approaches (apps vs. mobile web). And no – it doesn’t look like the platforms are consolidating soon, nor does it seem like HTML 5 will replace apps in the foreseeable future. TripAdvisor’s Mike Putnam suggests a hybrid approach, with an app that presents the main user interface but uses an integrated “browser window” to present most of the on-line content.

 

Second, some experiences call for a platform-wide solution, for instance mobile boarding passes – a sub-par experience that can be improved with an airline app – but only for boarding passes from that same airline – and do we really want to download and sign up on an app for each of the airlines we use? More likely, we want the platform to provide a solution, styled after Kerry Kennedy‘s “save the screen shot” idea but a little more direct.

 

Last – Tablets. They Are A Separate Opportunity

Tablets (e.g iPad, PlayBook) are great travel research tools, unlike smartphones that are great immediate info retrieval / action tools. This market is growing quickly, as demonstrated by some of the stats provided by Orbitz’ Chris Brown.

 

 

 

It’s a different mode of interaction – more similar to the desktop, but still a different user interface. If you’re an online marketer, these too should be on your roadmap, and unfortunately, what you deploy on these should be different from what you plan to build for smartphones.

 

… In retrospect – we’ve barely scratched the surface. Marco Saio and team at EyeForTravel did a great job arranging this – maybe they should consider a whole conference dedicated to mobile.

 

Personally it was a challenging experience for me not to try and answer every question myself… If you have specific questions / ideas and need someone to discuss them with, contact me directly or comment here.

 

 

Mobile Platforms

What Have I Learned at DiscoveryBeat 2010?

Stop counting Downloads / Measure Engagement

Don’t charge up-front / Go for In-App Payments

The biz is on iPhone / But Droid’s on the work-plan

You need Analytics / Cause numbers’ the game, man!

I ain’t generally a lyrical guy, but they were running a poetry contest, so I took a crack (darn if I understand how I didn’t win that iPad!)

So in a nutshell – these are the main points, really:

Platforms: iPhone and Android are all that’s interesting to this crowd – and iPhone seems to be monetizing ten times better. Even though the trend for Android as a platform is great, it is not monetizing well through paid apps (and there’s no in-app payments). With this type of revenue driving most of what’s happening on the iPhone – Android developers have slim pickin’s… BlackBerry and others were all but ignored by most everyone, except for Flurry CEO Simon Khalaf who says for the last three months he’s been seeing significant developer investment in Windows Phone 7 – driven by Microsoft’s basically committing to minimum revenue numbers (i.e. directly paying them to take the risk).

Business Models and User Behavior: Most revenue still comes directly from the users, but lately more through in-app payments than pay-per-download. Advertising dollars are growing, according to Google’s AdMob, but are still secondary, especially on iPhone. Now whether it’s ads or in-app payments, to get this revenues flowing, you need engaged users, who will use (and pay) over time. People will download everything, but also discard it immediately – apps typically churn overnight… if you can’t keep your users for weeks and months, you have very little, whether it’s by way of payments or advertising. This makes analytics critical if you want to know what works and what doesn’t.

What works for promotion?  A huge percentage of downloads on iPhone result from being on the “Top X” charts – these drive 80% of downloads according to TapJoy co-founder Lee Linden (!). This means that to effectively promote, you need a concerted effort that drives your app to the chart – which then gets you a virtuous cycle of user exposure -> download -> you remain in the chart. Developers with multiple apps can then cross-sell their new apps to their existing user base via in-app ads, email etc. In fact – having multiple apps is a key driver of revenue, as when you “spike” with one you can successfully spillover to the others if you cross-market well.

Virality is great if you can get it, but getting it is far from simple. Advertising works but is costly, so it only makes sense if you can spend enough to get your app into the charts – and then have it remain there on the virtue of its quality. So you need to “buy many thousands of users” at a high CPA so that you will get into the charts – and then get many more organically. If you can’t spend enough to reach the chart, or if you immediately drop out of it due to your app not being good enough / priced low enough / presented well enough – it was all wasted money.

Flurry, who seems to be doing very well by the way, presented their AppCircle product as an alternative – lower CPA due to better targeting, which can then be economical even at a small scale. Some other points made by panelists focused on the limited merchandising possible in the App Store – sometimes even changing the app icon can bring a huge boost in downloads… Appolicious too pitched themselves as a distribution platform for developers, albeit with much less of a structured methodology around it to my mind. If you’re interested in that model, also check our AppsFire. Tapjoy (formerly OfferPal), claimed a great ability to help iPhone developers get traction, with “up to 200,000 downloads per day for the top spot” – and then to monetize via virtual goods. Some other interesting comments from their co-founder include that the app icon has a significant effect on people – sometimes by improving it you can get a 10x increase in downloads!

Android is a little different. First, the Android Market is not as driven by the “Top 25” listings as iTunes. It is also a multi-channel market with many competing App Stores (Android Market vs. Carrier app-stores vs. direct downloads / GetJar etc.) Angry Birds launch, which was done exclusively at GetJar for the first 24 hrs was of course a topic for discussion – further highlighting the issues the audience and panelists raised regarding the Android Market. When asked “which platform you’re focused on”, less than 10% of the audience responded “Android”. Most importantly – it is much harder to monetize on Android. Between the different user demographics, the missing credit card info, and the ability to “return” an app and get a refund – users are so much less likely to pay for the download. Add to that the missing in-app payments, and your market is reduced by an order of magnitude. The general consensus was that on Android it is easier to monetize via ads than via payments.

In retrospect – I have to say that this reminds me a lot of the PDA applications market circa 2001 – after the first wave, come the big aggregators (mainly Handango at the time) whose charts dictate the market . Concerted marketing efforts are focused on getting into the charts (hard) and then remaining there (not so hard if your product is both relevant and good), which you often do by engaging with your existing audience and get them to download something new on the same product SKU… Many other points of similarity too. All-in-all a very valuable conference – Kudos to the VentureBeat people for pulling this off.

Mobile Platforms

Building and Marketing Your Mobile App: How To Select Your Mobile Platform

iPhone? Android? Blackberry? or is it the new Windows Mobile 7?Over the last couple of months, I’ve been urged by a couple of people to write a “Tutorial for mobile app developers”. They figure that as I’ve been doing this since ‘99 I must know something that’s of interest to some other people. Now I’m generally a little too lazy to take on a project like that, so I figured I maybe take it on in installments, kind of one chapter at a time. But I didn’t really get around to it until today, when after moderating the Mobile Track at the Eye For Travel Distribution Summit I realized the audience still has some pretty big questions and promised I’ll do my best to answer them, so here goes.

Still wondering about an App vs. a Mobile website? Wait for the next article.
Frankly, that topic requires a discussion on its own, but that’s not what I want to talk about here. So generally speaking I should say that if you want persistence – whether it’s of information on the device (e.g. such that it’s available offline, or immediately available when the app is accessed) or just of your basic brand presence and UI, or if you want a best-of-breed user experience, an application is the way to go, at least at this stage. If you’re still not sure – you’ll have to wait for a subsequent article.

Mobile Platforms – What’s Out There?
Unfortunately – much too much. Speaking strictly about Smartphone OS – In North America, there are three dominant platforms and one potential – Android, BlackBerry, iPhone (iOS) and Windows Phone 7. Elsewhere in the world, Nokia’s Symbian is highly prevalent, and MeeGo may replace it soon. If we extend our view to feature phones, we have to consider J2ME, BREW, Samsung’s bada and DoCoMo’s iAppli. I will not discuss those latter platforms at this time.

A few words about each OS (listed Alphabetically to avoid misleading prioritization):

  • Android – Google’s mobile Linux variant. Provided for free to many device manufacturers and heavily promoted by Verizon to counter the iPhone. Currently the fastest growing market. Supports a variety of device form factors and screen resolutions
  • BlackBerry OS – RIM’s proprietary operating system. Drives all BlackBerries, but not the upcoming PlayBook tablet. BlackBerry is the leading platform in the US from a market share perspective. Even though there’s one brand, there are many OS versions, device form factors and screen sizes in the market.
  • iOS (iPhone OS) – Apple’s proprietary OS. Harbinger of the App revolution and leads the App economy in many ways.  Apple always has only one device model in production (currently iPhone 4) and there is great uniformity regarding form factor and screen size.
  • Symbian – Nokia’s long-time mobile OS, once licensed (and co-owned) by many other manufacturers but since then dropped by all of them. Mostly drives mid-market phones in the non-US market nowadays, with dozens of form-factor / screen size combinations.
  • Windows Phone 7 – Microsoft’s latest attempt to reclaim the mobile market, lanched last week. Openly licensed to many manufacturers (most of them also sell Android phones). This is a brand new platform, not really backward compatible with previous Windows Mobile OS. This time, Microsoft dictates a pretty uniform form factor.

Remark: At this point in time I ignore Palm’s Web OS – which is sort of “dormant” in the market right now.

Gartner presented this chart a few month ago:
Share of 2010 Q2 smartphone sales to end users by operating system, according to Gartner.

How The Platforms Differ in The Marketplace
While there are some meaningful technical differences, the most important ones from a business perspective are the different audiences they reach – geographically, demographically and psychographically. Here are the main point for each:

Android: Android is trying to be for Smartphones what MS-DOS and later Windows are to PCs (see for instance what Fred Wilson writes about it). This results in a platform that reaches a very varied demographic / psycho-graphic, with a world-wide distribution. While this is good for Google, for you it may mean that much of the audience is composed of people who are inclined to use their Smartphones as feature-phones – not necessarily App-savvy / quick to spend on Apps. This is why many developers who develop both on iPhone and Android, for instance, claim that iPhone Apps monetize an order of magnitude better.

BlackBerry: RIM is traditionally very strong in enterprises – as a tool furnished to executives and managers as well as many other professionals. This represents an upscale demographic. However, as many of these people see the BlackBerry as a tool provided by their employer, and also because of its inferior App search / download / install capabilities compared to iPhone for instance – the propensity to download Apps and especially to buy them is lower. Lately, RIM has successfully penetrated the consumer market in many countries, reaching new audiences – not as affluent, and not necessarily focused on the “Smartphone” capablities but more on the pure communication / messaging capabilities of the platform.

iPhone: Riding on the coat-tails of the iPod and Apple’s brand, the iPhone reached the US “creative class” first. Coupling this early adopter / high-income audience with a great App download / purchase / install user experience, iPhone users download more apps then any other platform’s so far. However with the iPhone moving further down the adoption graph and wider geographically, the demographics today are more varied.

Symbian: As shown above, Symbian has the largest worldwide footprint – with North America taking a very small part in that. In actuality, much of the Symbian volume goes to mid-market phones used much less as smartphones than the other platforms, resulting in a varied, dispersed audience with (on average) a mid-market demographic. Couple that with the relatively weak experience of its Ovi Store, and you have a platform where the total use of applications is probably no bigger than the other platforms’ (with smaller volumes), dispersed worldwide (from the UK to China) and much less willing to spend on paid apps.

Windows Phone:  A brand new entrant to the game, it remains to be seen what audience it will draw and where. An informed guess would suggest it will be similar to Android’s, as we’re looking at the same set of manufacturers more or less, and the same target markets.

What’s Hard, What’s Easy
Without diving too deep into techno-speak, there are two main factors affecting how much it costs to develop and maintain an App on each platform:

  • How easy it is to develop software on the platform – which depends on the language used, the quality of the development tool suite, the richness of the “canned software” provided as libraries with the OS, and the idiosyncrasies of the platform
  • How uniform is the target phone base – for instance iPhones all have the same screen resolution, vs. Symbian devices that exist in at least 6 resolutions and 3-4 form factors (actually iPhone 4 introduced a new one but it’s still backward compatible and the same aspect ratio)

Some of my favorite developers like to use the following rule-of-thumb:

 

What costs 1 man-month on iPhone, will cost 1.5 man-months on Android, 2 on BlackBerry and 4 on Symbian

… Windows Phone is new, but as it’s Silverlight based and has a uniform screen / device layout, I guess it will be somewhere between iPhone and BlackBerry – once some developers develop the skill set.Relative ease / difficulty of development defines your fixed cost. But how hard it will be for you to penetrate the market effectively will affect more important variables – your actual success, or at least your variable cost (if you’re going to pay for marketing). This makes the market dynamics for each an even more important factor.

One area where they differ is the hurdles you need to jump in order to distribute your app. On the iPhone, an application has to be certified by Apple, which will take awhile to test it and may reject it (sometimes without even notifying you) for a number of reasons, the chief ones being objectionable content, not enough real functionality, or business conflict with Apple’s goals. On other platforms while there are submissions processes to the store, in actuality there’s very little filtering. In most cases you can also directly distribute (via a mobile web download) without ever going through the store. While this is a marked difference between the platforms – unless your application is in direct conflict with something Apple is doing, it’s not really a significant point.

More significant are the competitive environment, and how the distribution channel (mainly the App Store / World / Market) is managed.

The Competitive Environment for Apps: Circa 2010
iPhone claims 200-250,000 Apps in the market. While this shows that some people have been successful there (drawing a lot of other who haven’t), it also means that almost every idea is already represented there, often with mature products of high quality. The sheer volume of apps also means that yours will be buried down a database where serendipitous discovery of it is not very likely – kind of like a new website on the Internet. If you are a brand that people will search for anyway, or if you have an established audience you can direct to your App, you are likely to acquire users easily. But otherwise you will need to resort to any of the key digital marketing methods known on the web – advertising, PR, viral marketing etc., and your success, at least initially, will be predicated on these.

I say “initially” because the App Store has a memory, and the best way to draw downloads is by being ranked in the “Top 25” charts. This constitutes some of the most valuable exposure to end users. If you can break it into the Top 25 in a category (or better – overall), then you can remain there for awhile with limited further investment. And if your App and / or Brand are very good – then only meaningful competition can unseat you. However, do note that this is not easy. One of the reasons is that the iTunes App Store takes into account two main factors – Velocity (how fast has your app been moving in the last 24 hrs more or less) and Total Downloads. So incumbents have an advantage – unless the new App shows people are crazy for it.

Taking all this into account, one would argue that it may make sense to first try in another, more virgin territory, where the competition is not as fierce, and the incumbents are not as strongly established. With Android claiming about 60,000 apps, and BlackBerry a fraction of that, you theoretically have a better chance to compete. That is right, but you also need to consider the target audience and market dynamics. Android users tend to buy much less. This is due to a combination of factors including iTunes being more effectively hooked to a payment mechanism (all iTunes users must input their credit card details and payment is a one-click process) and the iPhone audience being more conditioned / more open to paying. So if that’s your business model, the returns may not be as good. BlackBerry users download less. However those who do, are willing to pay more. Whether or not that offsets the lower downloads, will depend on your specific case, and the overall product and marketing mix. With Symbian the distribution game is more complex – with the Ovi Store being just one channel to the market, and alternative stores (e.g. GetJar) and direct downloads being in many cases an important channel too. However in general the propensity to pay for Symbian Apps is much lower than on the other platforms, in my experience (and WorldMate has millions of pretty up-market Symbian users…).

So how to factor all of this into a decision? In my next post I will try to give some examples of how such a decision should be arrived at.

... Questions? request? post your comment below and I’ll try to address it in the next installment!
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Why The Vanguard And Why Now

This coming Monday, it’s going to be exactly eleven years since I’ve first been introduced to the world of mobile software. It was my 29th birthday (yes my birthday’s this Monday) and I had a friend hook me up with friends of his who were making their first steps in enterpreneuring at a small Palm software house they called Common Sense Software. They were looking at someone who could turn it into a real business, while they actually found a different company (Watapa). Kelly, Ramel, Dan and Benny – this fabulous foursome, as I’ve later come to name them, helped me found MobiMate, and spend these last eleven years watching (and participating) in the emergence of the mobile software economy – all the way from Palm Pilot applications to the current mobile internet / apps world. Six years ago we honed down on the world of travel services and distribution, and added web applications to the mix. And with MobiMate’s / WorldMate’s track record of leading in this market – from technological advances through business model innovation, I believe the Vanguard is very much where I’ve been this whole time. Which is fitting, considering it’s an anagram of my name…

For the last few years, I’ve been posting actively on my WorldMate Founder’s Blog. It’s time to have something separate of that. The Vanguard is my own blog, unrelated to that company, and does not represent the company or its management.