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« Highlights of Day 2 at GSMA Mobile Asia Congress in Hong Kong | Main | What happens to mobile advertising when economy comes back? »

November 20, 2009

Comments

ARJWright

Remind me again why I like what you do?
Because I posted this (http://mobileministrymagazine.com/2009/11/mobile-is-more-than-web.html) the other day, and your piece here really affirms a lot of what I was getting at - just from a different/more targeted angle.

Less the Best

There is interesting survey (that "is not particularly scientific") about app users.

"... The average total number of downloads made was 160, and the most common (mode) number of apps was 100.

While these figures may seem quite high, it should be noted that the mean was likely raised by a
handful of particularly ardent app fans who have in some cases downloaded as many as 800 apps."

(Jonathan Deamer and Katie Lips, Kisky Media, http://www.visionandmedia.co.uk/dyn/22647946-Winning-iPhone-Strategies-Report.pdf)

JB

Unless someone makes a sophisticated OS that is backward compatible with Java Brew it is doomed. The main problem I have with your analysis is the fact you ignore the power of speed. When your product is an idea (like software) spending months if not years going through the Byzantine mess of carriers/phones/users can evapoate your market. Also, your assertions about enterprise software spending in the mobile space would carry more weight if there was some supporting data. You're right about subscription revenue... there is actually an intersting discussion to be had about the future of subscription revenue as it relates to government made oligopies and intellectual property law, but this post is long enough already.

Pavlo Zahozhenko

From businessman's point of view, you are right, but from developer's point of view the situation is different.

Developer likes to..
1. ..use good development tools (e.g. iPhone SDK, Android SDK etc)
2. ..develop apps for devices/OS-es he uses (developers tend to use smartphones)
3. ..have a [sometimes mystical] possibility to earn millions for his work (which is possible with app store model and next to impossible with standard mobile apps distribution model)

Developer dislikes to..
1. ..write once - debug everywhere
2. ..develop apps for technologically uninspiring, limited devices which he doesn't use
3. ..deal with operators' app distribution monopoly and earn a tiny fracture of total app revenue as a result

Don't underestimate the developer, it is him who makes all those apps, mobile websites and SMS gateways after all.

Due to developers' behavior, it is quite possible that smartphone app stores' destiny will be brighter than you think.

Chris

"So while the Blackberry does have a vast library of apps, they are mostly business/enterprise applications. These are sold through various business/enterprise solution providers and are not sold via any 'apps store' but rather they are installed by the IT departments of the enterprise/corporate customers who deploy Blackberries by the thounsands as employee-phones to mid-managers and executives."

I am not sure this is true any longer. Blackberry App World (http://appworld.blackberry.com/webstore/) has 1000's of downloadable apps, both free and paid. It is not so much an issue whether there is a viab le app store, but whether application downloading is permitted withing most coportate Mobile IT Policy's.

Geoff

Hi Tomi,

Thanks for the great post. We've been looking at mobile web vs Java vs iPhone in a number of different scenarios for clients, and the stats that I'm still trying to track down to justify these services as viable routes is usage, rather than sheer device penetration.

i.e. there are 3.4 billion phones capable of accessing the mobile web, which is a massive number. But how many individual people actually do use their phones for that purpose on a regular basis? How does this play out globally, i.e. what are the usage stats in Italy vs Brazil vs Russia?

Same with Java apps -- we know they run on a huge proportion of phones, but how many people are actively seeking and downloading 3rd party Java apps to their phones right now and using them on an ongoing basis? Surely this will go up with the pending launch of several carrier app stores, but would be good to know the benchmark as it stands.

These services make intuitive sense as either alternatives or supplements to iPhone and soon Android, but it would be great to be able to prove that with hard data on usage, ideally by territory and demographic to prove they also match the audience.

If you have any of this data it would be great if you could send it or share it. I agree these are great services that should be worth the investment, but these stats would help support that argument greatly.

Cheers,
Geoff

Tomi T Ahonen

Hi ARJ, Less, JB, Pavlo, Chris

Thank you for the comments. I will respond to each of you individually

ARJ - thanks. And very good article at your blog, I Twittered about it already, as you know.

Less - Yes, that finding is very consistent with the anecdotal evidence we hear at Forum Oxford for example, where there are many who develop for the iPhone. It seems that a few are very active in the applications downloads - and if you think that the majority of titles are games, and many are free (advergames for example, or first level-free type of freemium games) then if you like games, and the iPhone has plenty of space for them, and your network does not charge anything extra for the download connections, why not download 'every game' essentially, and try them all out until you find what you really like... Its part of the problem of unmetered access.

JB - Brew may be 'doomed' as you suggest, but probably not because of 'backwards compatible' issues, rather that so many carriers/operators around the world are abandoning CDMA networks in favor of GSM/WCDMA/HSPA networks. Brew had a 100% market of all networks in South Korea just a few years ago, now all but one of the networks have moved on. India, Australia, Mexico etc have all done it - even Verizon headed in that direction and the biggest CDMA user by subscribes - China Unicom - just switched to WCDMA. This is the biggest problem for Brew haha...

Speed is a a good point. But speed does not in any way eliminate the fact, that to develop for the iPhone you develop to a total accessable market size of 50 million (including iPod Touch) but on Symbian you develop to an accessable market of about 350 million and on Java to well over a billion, on WAP to over 3 billion.... Speed will not get you 'the world' on any technology, not even the internet - try to get your US based internet website to be viewable in China haha for example, the world's biggest country by internet users. 'The world' size of market will of course take time, just to think of language adjustments, an English-language service will not become the market leader in Mexico (need Spanish) or Brazil (need Portuguese) or Russia (need not only Russian language, but cyrillic characters) not to mention China and India where there are many languages in those countries... Yes, the iPhone can get you really quickly up onto one tiny platform - of one percent of all mobile phones on the planet and about two thirds of one percent of the population of the planet. If you can simplify your concept, to run its initial 'contact' and sign-up via SMS, you can immediately reach two thirds of the planet - literally 100X more of an addressable audience than total installed base of iPhones... Then obviously via 'WAP Push' type of link, you can embed a 'mobile internet web link' to your SMS (or MMS) message and get your customer to enter your WAP site without even often knowing they have started now to surf on the mobile internet.. This is the intelligent way to get your customers to experience your service on a grand scale - but yes, it is totally different from building one sexy desirable app for one sexy desirable phone, that is predominantly only a US based platform...

My 'assertions' on enterprise market - well, I am 'the' authority on the industry stats but that is me saying that to you, it won't help you much. If you google me, you'll find that over 60 authors in mobile already quote me in their books - I am by far the most widely referenced author in the mobile services space. By far the most widely referenced. If my peers give me that credit, perhaps you can accept that I know something of what I write about. But for the specific numbers, a most widely accepted rule of thumb is my 20:30:40 rule, that 20% of all mobile phone subscribers (in the Industrialized World) will be enterprise/busienss customers, who generate 40% of all mobile telecoms revenues and deliver 30% of the profits. Just this past year these numbers have been again confirmed in countries as far wide as Norway, Singapore and the USA. I do know my enterprise/business numbers and am considered one of the foremost experts on the stats for the industry. Sorry, you will have to accept that the numbers I talk about are reasonably well accepted and as close to the mark as you can find anywhere in the public domain. If for any reason you think they are 'wrong' then please give me your source or feeling what number does not seem right, and I will be most happy to give you context of where similar findings have been given. But for example just last week Deutsche Bank calculated that Apple iPhones had penetrated less than 2 million enterprise/corporate customers globally. That is less than 1% of all corporate/enterprise customers out of the Industrialized World. A totally meaningless anomaly in the big picture, where Blackberry has over half and Symbian (predominantly Nokia E-Series in most countries outside of North America but the 7 Japanese makers in Japan obviously) and Windows Mobile have most of the rest.

But at least we agree on the subscriptions revenue, haha, so we find some common ground.

Pavlo - I hear you, and yes, from the developer's point of view, the iPhone is the ideal mobile platform to develop to, there is only one form factor to most elements of the UI, it is easy to discover services, to sell them, to collect payments. Getting approved can be a hassle but probably not much more so than most other rivals. But that is a very bad angle to take on a business, to focus on where the 'engineering' can best offer its solutions. By far a better approach is to focus on the consumer - where is the customer. And here, while yes, you can reach 35 million iPhones, or 50 million including Touch'es, you get twice the market with Blackberries, seven times the market with Symbian, 20 times bigger market with WAP counting just active users (and 60 times bigger by reach of WAP total installed base), etc.. If you are a wise businessman, yes you listen to your engineers, and you do your business cases of course, but you start from the customer. What point is there in developing 'flight services' to space flight tourists - you know the billionaires who fly up with the Russian rockets to the space station or soon fly up with Virgin Galactic, when literally a billion flights are taken by ordinary people in 747s and Airbusses around the world... My point. Mass market. Don't get hung up by the tiny opportunity of the specialist niche smartphone platforms, look at the big picture where the big scale is...

Chris - I hear you. But I do know the market very well. RIM is one of my reference customers (as is Nokia, Motorola etc) and I was just doing half a dozen events with RIM called 'Blackberry Connects with the Experts' where I was 'the' international expert, and I met up with hundreds of Blackberry developers in events that drew audiences of over a thousand in six countries - and I can promise you, while RIM is hungrily developing a big portfolio of consumer apps - the vast majority of its developers do focus on where their main customer group is - the enterprise/business apps. Security systems, SAP integration, email extensions, VPNs, e-business apps, CRM systems, fleet management vehicle tracking solutions, etc. Not consumer apps. Yes, there are hundreds, thousands of developers also developing consumer apps, and some day the majority of Blackberries will be in the hands of consumers not enterprise customers, but the enterprise customer - who had selected Blackberry as the approved handset and platform - will have a wide range of needs to do their invoice processing and internal training and competitor analysis and ERP and CRM etc etc etc solutions, so once you are 'in' the customer, there is ample opportunity to develop apps. Not so with consumers, who can be very fickle, in particular about paid apps... In the enterprise/corporate space, it is a given, that every Blackberry decision means at least one app will have to be sold, else why accept a smartphone (new IT platform that needs to be integrated, secured and supported). The decision will never be accepted unless there is already at least one app that that given enterprise will want - and then they will buy licenses to all who will get the Blackberry ie thousands of user-licenses per one purchase decisions. The economics are totally different from selling a couple of hit apps this week on the iPhone Apps Store. This will not be changing any time soon. A survey by TBI Research this summer revealed that even in the USA, 80% of enterprise customers will not accept a second smartphone platform into their system. They selected Blackberry years ago and will stick with it as the only approved smartphone platform. If you have a new way to help that business, be it a financial app or a healthcare app or a government app etc, you have a captive audience..

Thank you all for writing

Tomi Ahonen :-)

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    Tomi Ahonen is a bestselling author whose twelve books on mobile have already been referenced in over 100 books by his peers. Rated the most influential expert in mobile by Forbes in December 2011, Tomi speaks regularly at conferences doing about 20 public speakerships annually. With over 250 public speaking engagements, Tomi been seen by a cumulative audience of over 100,000 people on all six inhabited continents. The former Nokia executive has run a consulting practise on digital convergence, interactive media, engagement marketing, high tech and next generation mobile. Tomi is currently based out of Hong Kong but supports Fortune 500 sized companies across the globe. His reference client list includes Axiata, Bank of America, BBC, BNP Paribas, China Mobile, Emap, Ericsson, Google, Hewlett-Packard, HSBC, IBM, Intel, LG, MTS, Nokia, NTT DoCoMo, Ogilvy, Orange, RIM, Sanomamedia, Telenor, TeliaSonera, Three, Tigo, Vodafone, etc. To see his full bio and his books, visit www.tomiahonen.com Tomi Ahonen lectures at Oxford University's short courses on next generation mobile and digital convergence. Follow him on Twitter as @tomiahonen. Tomi also has a Facebook and Linked In page under his own name. He is available for consulting, speaking engagements and as expert witness, please write to tomi (at) tomiahonen (dot) com

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