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January 13, 2011




You can perfectly deliver text ads on WAP. You know, this type of ads on which Google build itself. And you know? When I type 'disney' in Google first link on page is text ad for one of Disney tv channels...


"Second, SMS does NOT "capture/retain""

Actually they do - recurring SMS messages charged at premium rates are a fairly common marketing vehicle.

Advertising is also done by SMS and MMS quite easily either directly or by enclosed link. For example, the national chain that services my car send me SMS messages offering new products as well as reminding me when a service is due.

Bob Shaw

Tomi- Very informative and your forecast has been quite accurate. The cost for reaching a potential customer is so low using SMS, MMS and Web/WAP and the percentage of potential customers that can be reached is so high that it will be difficult for other means e.g. Apps, to compete in most cases. Apps will have to create significant value addition compared to what can be achieved with these three to be competitive.

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Salut, où avez-vous obtenu cette information peut vous s'il vous pla?t appuyer ce avec une certaine preuve ou vous pouvez dire quelques bonnes références que moi et d'autres apprécieront vraiment. Cette information est vraiment bon et je vais dire sera toujours utile si nous essayer sans risques. Donc, si vous pouvez le sauvegarder. Cela nous aidera vraiment à tous. Et cela pourrait apporter un peu de bonne réputation pour vous.


New number: Apple just started its promotion for the 10 billionth app bought from the App Store. Doing some calculations, users are downloading around 35-40 million apps a day from the Store (which includes free apps, but does not include upgrades to apps).

In sum, the App Store will reach 10 billion in just a few days more than the 2.5 years from its birth on 7/12/2008.

 Tomi T Ahonen

Hi Baron95, vvaz, Mark, Leebase, Bob, kevin

Baron95 - I am sorry my blog triggered that long and detailed and well-thought out comment from you. I am really sorry. In this blog article, I had no intention whatsovever to make flippant comments about alternate business possibilities on mobile, and based on what I wrote here, your comments are totally relevant. However, on several past lengthy, detailed, fact-filled calculations, I have indicated the utter futility of attempting to make profits with paid apps on any app store today. I have shown calculations of revenues, downloads, costs, profits and explained that half of all paid app developers can expect to break even on their first edition app - assuming no upgrades - in 22 years. That blog has been referenced in over 100 other blog and news articles and triggered several similar calculations - all which came to the same conclusion, that there is overhype about apps and their ability to generate profits today.

In my blog analysis articles about the app stores, I also have explained why app store style adver-apps are a ridiculously bad way to try to reach an advertising audience on mobile. And at other times I have discussed other revenue-genrating opportunties too, like virtual property sales in free apps. If you are interested, please just look for those using the search button here on this blog. But I do apprecaite your considered comments, they were merited, and I was too flippant in my throw-away line. This blog article was obviously not about app stores, it was about SMS, MMS, mobile internet and mobile news.

On SMS and MMS - you are totally mistaken. All ad agencies today say the hottest thing to do is 'engagement marketing'. The man who coined the term and co-authored the book with me and blogged here with me for 3 years, is Alan Moore. Alan teaches with me at Oxford and writes more books. Alan says that SMS and MMS are optimal engagement marketing tools. The same is echoed by for example mobile advertising guru and author Jonathan MacDonald etc.

I agree that in 2-5 years most now phones sold will be smartphones, I was one of the first people to explain WHY all phones will become smartphones before thsi decade is done. That likelihood, however, bears no correlation with your conclusion that adver-apps would be in any way meaningful at that time. We've had aver-apps on featurephones, and the bigger use of smartphones today is the mobile web, more than downloading apps. Some experts believe apps will form the majority of mobile phone use in the future. That view is prevalent on the West Coast of America. The rest of the world - which has had both apps and the mobile web far longer than the USA - believe the opposite, that the web model will win. I obviously belive in the web. We'll see.

Your 'everybody in the internet knows' argument that zero revenues but building a huge audience is proven to be a myth. There was an economic bubble just 8 years ago that utterly devastated that silly concept. Google didn't turn profitable because they grew 'big enough'. They became profitable because they invented a new advertising format, the first unique one for the internet - adwords. It has nothing to do with size. Adwords was adapted by Flirtomatic when they had 100,000 users and Flirtomatic was making good money off that.

vvaz - thanks!

Mark - thanks!

Leebase - cool, don't worry about the profits haha. Let me just briefly explain, I have nothing against us discussing how to make profits with mobile or online or digital services or apps, here on this blog. That is perfectly fine. What I don't want us to do, is to argue about stock price evaluations because that to me is even more tedious than arguments about religion or politics and I do not want to waste my time, or that of my readers, on such a pointless activity, as I have said many times, this is not a financial analysis blog. That is why I am also kind of allergic to any mention of 'corporate profits' as an arguemnt here, because that is very close to another argument about what will happen to this stock or that, today, yesterday or tomorrow...

So don't worry, I wont be censoring you on this haha..

Now to your points. Yes, I agree, Apple attacts a very desirable affluent and influential user base as a target audience. Totally agree. I also agree size is not equal to profitable business (see above). Valid point oil/tennis shoes (haha, loved the analogy) and yes, profit opportunities are not mutually exclusive.

But then we get our difference of opinion. You say 'nothing magical about SMS and MMS, compared to internet'. I hear you. I hear that argument often. It makes very much sense. If this was true, we would have SMS and MMS on the internet today. We do not. If this was true, the internet would have paid services worth SMS today, they don't even do half that. There IS something magical about SMS and MMS. SMS specifically is able to generate revenues FOR THE INTERNET. But wait, Leebase, I have been working on a new blog article. Do me this favor, wait on the 'is SMS different or not' argument and your response, until I post that blog article hopefully on Monday, read that, and then see if you might agree with me, ok? I am addressing those very points there.

But on the SMS/MMS issue of making money, yes, you are right, that not all SMS and MMS services are able to turn profitable. This is normal of any business. Not all hollywood movies are profitable, not all videogames are profitable, not all songs released become hit songs, etc. That is normal of any business, and mobile services on SMS, MMS, WAP, Web and Java - all - fit a very familiar standard hit business formula, about one in 10 is a success. This is true of books too. But not of app store applications. There the odds are astronomically against you, my rough estimate is that it is 1 in 1,000 ! This is far more like a lottery than a real business. What you say is true, when you compare SMS and MMS to books, records, movies etc. App store apps are not that lucky. They are utterly disasterous as a business prospect (see above)

As to 'how' haha, this blog is stuffed full of success stories around SMS and MMS, come on. And I have that free 350 page book with tons more in it. What more do you want. you cannot be serious in asking me now to write more for you. Just stick SMS or MMS in the search box and you'll get hundreds immediately.

Bob - yeah, we agree. That being said, and for all my 'pessimism' about apps, there still IS an opportunity on apps, but it is very much in the 7th mass media angle to apps - ie doing on an app something you cannot do on other means on a phone or any other device. So take Augmented Reality, a perfect example, cannot be done on any other platform than mobile, and only on smartphones, and only via an app of some kind. THAT makes sense and can drive some revenues and users and profits - but in the scale that is miniscule compared this blog haha.

kevin - pls see what I wrote about apps above. This blog was obviously not about apps, it was about SMS, MMS, WAP/web and mobile news. I appreciate it that you were activated by my brief mention of apps but sorry, I didn't mean to disparate apps in this blog article as I have already explained in very deep detailed blogs why the numbers you quote here are utterly meaningless. I appreciate the comment, kevin I really do, but really? 10 billion downloads most of which were free and half of those who made the paid apps might break even - if they're among the lucky ones - before the year 2023 - half will break even some time after that. You were aware that one sixth of all paid downloads from the App Store were books? Should we really compare who is 'more successful' Amazon or iPhone App Store? kevin, that point is truly irrelevant what you reported, but thank you anyway. If you go read the app store economics blog, and comment there, I will come there to discuss the app store economics with you, but lets not do that here, this blog was about SMS, MMS etc.. ok?

Thank you all

Tomi Ahonen :-)

Bob Shaw

Baron95 - You gave the following example:

"E.g. I can get a map/directions from google maps by going to on my mobile browser or I can launch an app. If the app is more personalized, more functional, faster, etc, etc, etc, it will have more valuable interactions and profit potential."

I agree that there is an opportunity for profit potential if anything can be made more personalized using an app. Now considering the advantages of lower development cost and wider reach of a web app as compared to a mobile app, the question is: Could not these personalized services be offered through a web app instead of a mobile app?

Phil W

@ Baron95, Tomi writes on the mobile market for companies that want to provide services for the mobile market. For those companies the only thing that matters is how big a market can I reach, not who is the most profitable company. therefore the only thing that Tomi is focused on is marketshare and as it is his blog, he sets the rules.

What I can't quite understand is why you have such a down on Nokia, I've seen you on other blogs and the message is always the same.

The revenue share has dropped because the competition has intensified, but I would argue to be taking a quarter of all mobile revenues is pretty good in the current climate. Market share is holding up as well. Going forward I would expect both to stabilise.

I don't want to compare profitshare with Apple as Apple is playing a different game. What I would be more interested in seeing is profitshare for all mobile companies excluding Apple. That would be a better gauge as to how Nokia is performing.

Apple is focusing on only the richest part of the market so of course its profitshare is the biggest. unless other companies play the same game, they can't possibly match that. Most other companies are playing the same game as Nokia, so it would be a better gauge to compare them.


Tomi, I did read what you wrote about apps above, and that was my response. I will continue this on the App Store Economics blog.

 Tomi T Ahonen

Hi Baron95, Bob, Leebase, Phil, kevin

GUYS ! The topic of this blog article was to CONFIRM numbers we have discussed on this blog about SMS, about MMS, about web and WAP, and about mobile news.

Nowhere in this blog story, was there any confirmation about the status of apps. Trust me, guys, I will be here - I have been here MANY TIMES BEFORE - about the stats about the apps. Why do you guys NOT deal with the topic, and you take this to apps or even more (Baron95!) - the sales of units of handsets and their profits.

I won't bother to have that discussion here with you. Guys, you all visit this blog often. Can you NOT appreciate the research I do for you, volunteer the data here - and PLEASE if you discuss something, do talk about what I posted about. I have at least 100 blog articles about handsets and their sales, and AT LEAST 20 about apps etc.. We can have the discussions there, go to the most recent blog about apps and comment, I'll come there and at least the blog article will have recent data which is relevant.

I could understand this, if you were new to the blog, but not you five guys, come on!

So I'll ignore the discussions here about apps or handsets. I'll deal with your comments relating to SMS, MMS, mobile web and m-news only. I hope you understand why.

Baron95 - yes, valid point and I am sure we will see more of that kind of integration, not just of mobile web and apps 'convergence' or integration where one feeds another - but I am pretty sure that the WAP push and web links on SMS and MMS will also bring far more integration of mobile web and SMS/MMS.

Bob - good point, I totally agree, that the potential is far bigger to make the user experience and the service adoption and the paid service on the mobile web side than the app side but obviously both are valid ways to approach, and each use case idea should be considered in context of user and device and network etc.

Leebase - ok, I'll bite, you present it reasonably well. I totally appreciate your view, of looking at a smartphone as being primarily a 'pocket computer'. I explain it in almost every one of my books, that the pocket computer metaphor is two decades old, it has found its peak market (remember what we called PDAs) which all had apps, and that was the extent of the pocket computer market - if there is no communication ability. The reason why the smartphone crushed the PDA a decade ago, was not because smartphones were good at apps or 'computing' it was because they were phones - and because of Reachability - ie the 'ringing in the pocket test' as I explain in my more recent books. What you see, when you see a smartphone - is valid. There is an honest, millions-of-devices sized market for that. Only it is a far minority of all smartphone users. The vast majority of smartphones want the PHONE functionality, that is why the more expensive iPhone outsells the cheaper iPod Touch. I won't waste more on this, please read in the free ebook the part about 'Reachability'.

Baron95 - about my ebook, are you seriously suggesting that I should have left some part out, about the 'Insider's Guide to Mobile' so that I could include a chapter on the profitability analysis of the handset makers? Where handsets are less than one fifth of the industry? Like you didn't get serious value out of the two chatpers on handsets, stuff that is in no other free resource anywhere? What part of those two chapters would you think I should have removed?

Phil - thanks for the commments, I was tempted to delete them haha as getting now into those silly arguments about profitability, but that would be unfair to you as you did respond to Baron95 - but warning to you guys all, don't get into the corporate profitability on any blog article I write here, except those that address corporate performance! Don't any of you continue these corporate profitability discussions in this thread. This topic was about SMS, MMS, WAP and m-news, not about Nokia and not about Apple..
You guys KNOW I am sick of them.

kevin - cool, I'll meet you there

Everybody, please STOP all discussions in this thread that are not related to SMS, MMS, mobile web or m-news. Ok? Please, I ask you.

Tomi Ahonen :-)


You're absolutely correct about reachability. But people have had reachability with featurephones with SMS/MMS/WAP/etc. I think Lee's point was that the distinction of smartphones is that the reachability of phones has been combined with incredible processing power (that of a computer) so apps, native or web-based, that are enhanced by being connected (i.e., social, content reachback) will significantly increase the user's productivity or entertainment.

Phil W

Sorry for the off topic post previously, I unforgivably let myself be goaded into an inappropriate response. I should have known better. By all means delete it if you like.

Re SMS, I'm not surprised given how much everyone I know uses it. One of the things I particularly like about it is that it can be used to time shift a conversation across the globe. By that I mean that if you are in Australia and you want to contact someone in the UK, the time difference means you have to plan a voice call. Not so an SMS. I also like the delivery reports which mean you get to know that your SMS has been received.

I have some reservations about the use of SMS for advertising. I hope we never get to the situation that we are open to unsolicited SMSs ie effectively mobile SPAM. I know you have talked about "opt in" schemes and that's ok, but I fear that given the way some individuals ignore the rules and bombard us with unsolicited emails are we sure that won't happen eventually in the mobile space?


Here's a link to story about a Cambridge, Massachusetts, USA restaurant using SMS to allow patrons to communicate with their waiters.

Not passing judgement either way.

Phil W

@Kevin, good link!

Most of the time I would say this is not a good idea, but there have been too many times when coming to the end of a meal, it suddenly becomes very difficult to attract the attention of the waiter to get the bill. This would be soooo useful in those cases! LOL


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Clearly the time of apps is NOT in the past, not by any measure. It was just reported that the average iOS device user has downloaded 60 apps. Nobody downloaded 60 apps for their Palm Treo.

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Phone launch sales), that has dropped to around is bleeding market share again. We do not know the exact number until we have the final count of all smartphones sold in Q4.

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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 Helsinki 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 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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