Hello and Happy Friday! The news this week that independent apps store GetJar has surpassed the 500million download mark is remarkable news. For all the naysayers out there who think that apps are a passing fad, this does tend to show that mobile users the world over do want apps.
GetJar is not only flogging apps in the UK and US either – there is a growing market for them in development markets such as India and Indonesia where they offer the chance for users to do all sorts of things that we in the west take for granted with our PCs on their mobiles. They make use of the processing power in the phone, you see, not what your MNO offers you via its network.
Sure, there will always be a role of online content and services, as well as the mobile web offering a great opportunity for delivering content, services and so on, but apps so far tick all the boxes. GetJar believes that the two will happily coexist, but that apps have a distinct advantage to users the world over – certainly for the foreseeable future.
You see the thing about apps is that they reside on the handset; mobile web services, in a cloud, reside on a network – and networks are always way less advanced than the handsets that sit on them. This is why, until the networks bridge the generational gap between themselves and handsets, the more apps will become a dominant business model for getting sophisticated content and services out to people.
Apps are also much quicker to develop, test, disseminate and update. And with the advances that are coming along in terms of in app advertising as launched by 4th Screen this week and in-app billing as rolled out by Netsize, the telemedia industry is certainly backing the apps model.
I am sure that as things improve in the networks around the world, the industry will also start looking at how to exploit the mobile web (as discussed at last week’s AIME seminar), so the future is bright for mobile users…
… so long as the networks play ball. For there is, as ever, a fly in the oinment. Both the apps store model and the m-web model basically mark the first tentative step in turning network operators in to smart pipes, rather than content companies – a move that MNOs themselves have started to (grudgingly?) embrace: witness Vodafone announcing the end of its Vodafone Live! brand as it shifts more towards an open web portal to be called My Web. But that in itself is going to be a huge challenge for network operators.
A report out this week by analysts Ovum suggests that – surprise, surprise – the MNOs are already starting to over-hype the fact that they want to now be smart enablers. What Ovum suggests is that this move is not going to be a commercial magic bullet, rather it will be a hugely challenging cultural shift – and some won’t survive the transition.
What operators need to embrace, says Ovum, is that their networks, connections, customer data and all there other ‘assets’ are commercial propositions that they need to share with third parties to get value from in a smart pipe world: a major shift in how they look at what they do that some may not be able to embrace.
In the meantime, I suspect that the third parties that Ovum sites (that’s you telemedia!) will get on with making apps work, monetising them and embracing the raft of new alt.billing mechanisms that are coming on line and perhaps we won’t need smart pipes at all, just wi-fi. Who’d want to be an operator these days eh?
Good entry - longer comment to follow
ReplyDeleteI do think that apps are the way forward, certainly for the immediate future and the reasons being, as you quite rightly said they don't rely on the network. But more importantly it is the billing mechanism that sits behind them. We understand micro billing and know how it works. (we've got iTunes to thank for that). I also was at the AIME seminar last week and certain delegates were campaigning for more choice regarding billing options - bit let's face it, if you are buying good online you end up paying with a card in some form or another. You can't pay cash. personally I like credit card billing - and understand my itemised statement. This is not always the case with charges made to your phone bill. Credit cards also allow for refunds, which consumers like.
ReplyDeleteAnd Sue, let's not forget that credit card companies take a far smaller slice of the revenue than operators do. All in all, I think operator billing is approaching its death throes, unless MNOs rethink their revenue sharing, branding and price points: they are simple out of touch with how users now buy things.
ReplyDeleteThanks for the vote of confidence!
ReplyDeleteRussell