Tag: app store Page 5 of 10

The Future of Advertising is in Engagement!

On 03/10/2009

A lot is being said about mobile marketing, mobile advertising, capturing “consumer’s” imagination (if not only their eyeballs). And everyone says: “yes, I get that, social, mobile, always-on, always with them, cool!” Online ad spend outstrips TV already (at least in the UK), and mobile is arguably the next big thing; it is so much cooler, too: personal, accessible, always-on!).

So how do you execute? Banner ads? Text ads? Virals? “Ah, yes, virals are cool, I heard about them!”

There’s a busload full of mobile advertising networks out there, blind, premium blind, premium (check here for a great overview). And what do they do? Well, banner ads, text ads, the usual. Does it work? Anecdotally, sort of… Most developers and publishers I know that engage in this sort of activity make their money in two ways: either they are being commissioned by an advertiser to do it (good because you’re being paid!) or they use it as complementary (sic!) revenue; on a stand-alone basis, it would not feed them.

Why is the conversion not soaring? After all, mobile allows for unprecedented targeting (IF you do it. See here how not to do it): users have their phones always with them, it is always on, you can fall back on historical behaviours, etc, etc.

I would posit that it is because most advertisers still think of it in terms of consumers: beings that sit on the other (sic!) end of the message and who consume whatever I, advertiser, want to tell them. It is not, alas, true engagement, and this is where arguably the future lies.

So how do you engage? Many options. A good one is by being sincere (Zappos, the online shoe retailer that was recently acquired by Amazon, is a great example). Another one is by engaging rather than preaching. Not so easily done with banners. Easier done with something more interactive. Such as – an example – games and apps. On Apple’s app store, there are some great successes for this type of thing: German car manufacturers seem to be good at this! Audi did one, German developer Fishlabs did a couple of games for Volkswagen, Artificial Life for BMW, and then there is Waterslide Extreme, which is basically a Barclaycard ad (and badly executed: they could so easily have accommodated the RFID function, which the original cinema and TV ad is meant to promote; alas, they ignored it!) which despite its shortfalls was incredibly successful. But these are exceptions to what I think might well become the rule. On the app side, there are e.g. Pizza Hut and Gap that were recently featured (for free!) in Apple ads. Wow!

It seems obvious when you think about it: games truly engage (users – not consumers! – interact with them actively) and they can do so in a much more subtle manner (less invasive). At the same time, the user (not: consumer) spends a lot more time with the brand than with a banner ad.

It is, alas, a space of unknown dangers and unprecedented adventure: never-before seen creatures (scil. formats) and strange folks (scil. developers) roam weird landscapes (scil. mobile platforms). This is how brands and their agencies often experience mobile. They "get" it, don’t get me wrong but they are still fairly unfamiliar with it. And because the big pots of gold sit with the brands and they don’t want to risk cutting access, they’ll rather (and rather too often) stick with what they perceive as the trusted old paths. It’s not so good then that the freshest fruit grows on the trees in this new land and no longer in the wastelands of banner ads…

Watch this space then. It will only be a question of time (I hope) before we’ll be seeing a new wave of non-intrusive, interactive, fun brand engagement. And games and apps will lead the way!

Vodafone 360: the Good, the Bad and the Ugly

By Volker

On 25/09/2009

In 1, Carriers

After much huffing and puffing, Vodafone unveiled yesterday what everyone had been waiting for for months and months: its new Vodafone 360 concept, which will replace Vodafone Live! It launches on – drumroll – LiMo-OS Linux phones from Samsung with touchscreen and GPS and, for the H1, AMOLED display (yum!), WiFi, HSDPA, etc, etc, etc. and also supports a fairly big range of Nokia (not on the N97 though!) and Sony Ericsson devices (although, judging by the screenshots, it doesn’t look as sexy on those).

The 360 thing is, according to the press release

a brand new set of internet services for the mobile and PC which gathers all of a customer’s friends, communities, entertainment and personal favourites (like music, games, photos and video) in one place.

It has an address book with nodes into Facebook, IM (Windows and Google) and will “soon” also cover Twitter, Hyves and StudiVZ (the German Facebook clone). Two tailor-made (!) handsets that use a proprietary (!) interface based on LiMo’s release 2 mobile Linux OS. Users can create groups across different networks (which is very neat!), an app store with 1,000 apps at launch (no word so far what this comprises) and syncing with your computer.

So is this the big thing then? Here’s the good, the bad and the ugly:

The Good

The service reaches out. It acknowledges (this is a big step for most carriers!) that users have a life outside their carrier. Facebook, Live Messenger and Google Talk are a bit thin, I’d say, but let’s cut them some slack; the others will follow.
It has a couple of neat twists built-in: I mentioned a few above but there is also a feature that uses some spooky thing called the “Vodafone’s proximity algorythm” and which basically automatically favourites your most-loved people: the most frequently contacted people (like your mom?) come closer to the front.
At least on the custom-built devices, it looks much better than previous attempts by carriers to make something look and feel a little more user-friendly.
I hear that the whole widget-thing should be really neat. Now, I haven’t seen any of it as yet but the concept sounds good.
It works across different operating systems (at least LiMo and Symbian).

As a funny side remark, the PR blurb points out that

The beauty of Vodafone 360 is that all the services work together and they are easy to use.

So they weren’t before, huh? 😉 — sorry, couldn’t resist…

The Bad

Some commentators mentioned that the cloud-hosted address book and generally aggregation of contacts, networks etc through a provider rather than through the handset would tie people to the provider more closely (which might not actually be anything Vodafone would object to). I am not sure how tough it would really be (as you have your computer back-up), so easy on that.

It is still very much a closed-circuit affair: It is Vodafone and no one else. It is proprietary, tailor-made and not open. This is not good (and, yes, I know that the oft-cited iPhone is proprietary and tailor-made, too). Alas, its applications are not – unless your name is Spotify; then it takes a little longer… 😉

The Ugly

The underlying proprietary thinking is nothing I can see working longer term. In a world that is (Vodafone press speak)

a substantiator of Vodafone’s new brand expression – ‘power to you’ – which is focused on putting the customer in control and enabling simple and easy to manage communications, both mobile and fixed

this is also a little bit of a contradiction.

But I will say that it seems to be the nicest operator-built environment I have seen so far. And for this to come from the world’s largest operator is no mean feat and might actually yield some results. Go on, guys, tweak it, improve it, show us!

App Bonanza or Analyst Bonanza?

By Volker

On 24/09/2009

In 1

In the last two days, two forecasts informed us about the value of the mobile app market in – convenient as ever – the distant future that is 2013. US analyst firm Yankee Group predicts the US app mobile market to be worth $4.2bn by then. Today, British analyst Wireless Expertise (run by former Netsize exec Anuj Kanna) topped this easily by predicting the (global) app market size to be $16.6bn by that time (free copy of the report here).

I can hear your moans…

However, let’s have a look at the numbers then, shall we? At the end of 2008, there were 4.1bn mobile phones in the market. Because apps tend to thrive most on smartphones (and the analysts seem to thrive on them, too), let’s have a look at that sub-sector. I would estimate the smartphone share to being somewhat under 10% (Symbian claims c. 250m devices in market, Apple has some 30-odd million, so RIM, Windows Mobile, Android, Palm, etc should probably be OK with the balance of some 100m). In Europe and the US, the share is much larger but in the big volume markets China and India it is bound to be much smaller, at least for the time being. Global smartphone shipments in 2008 were around 140m.

If we estimate a 20% growth year-on-year for smartphones (vs. 5% for the overall phone market, which seems to be loosely in line with the general dynamic), then we would end up with something like 900m smartphones by 2013. Yankee Group predicts that smartphones in the US will quadruple by then (from 40m to 160m) and does not seem to be very far off. Wireless Expertise thinks the global number will be 1.6bn, which again, might not be that far off.

The question is however if people will really download this much stuff: Yankee Group predicts that the actual value of the market will rise 10-fold and that the average price point of an app will be $2.37. Why that is so, you ask? Well, pay $495 and you will know; I don’t…

Now, the good folks of Wireless Expertise see the thing quadrupling until 2013. They do, however, count “ordinary” mobile games as they are being sold through carriers amongst the apps, which means that their starting point is higher, namely $4.6bn in 2009, so they’re looking at this quadrupling. They raise some smart points on app stores and how they (well, it) changed the way users access and consume content, how carriers will need to look for alternatives to increasingly commoditized voice and messaging propositions, etc. But why there should be a 400% rise in e.g. traditional J2ME mobile games remains – whilst it would be wonderful – pretty much in the dark.

Talking of J2ME and feature phones: I do not know how they are being woven into the equation but there would certainly be a wide field for any self-respecting crystal-ball-reader here: on the one hand, app consumption on such devices has traditionally been fairly shabby but, on the other hand, this could well change if connectivity, bandwidth, UI and the right price plans would come together to offer a compelling mobile web solution. So then apps would need to be translated into widgets or something like that. Would users then pay for them? Don’t know. Or would it be the “Freemium” model according to which “Free gets you to a place where you can ask to paid?”

The challenge of these reports is their “simplified” assumptions: if only one of them fails, you go “oops”, and your prediction is halved (or worse). On Wireless Expertise’s case, this is particularly clear: their assumption is that there will be a dual strategy of (presumably OEM-driven app stores) and mobile web-based widget stores. Now, they further assume that Ovi, Windows Market, etc will all be as successful as Apple’s App Store. By early (anecdotal) data, this could not be further from the truth (see here for what that may mean). Nokia in particular struggles to get its head around a viable and compelling media strategy (cf. here and here). And hence the beautiful hockey stick would actually fall flat on its face.

Now, I am not predicting total doom and gloom, in the contrary. I do think that Apple’s wake-up call has brought a much-needed new wave of innovation and I also believe that this will be successfully incorporated by some carriers and OEMs. But by all of them? Not very likely.

And so we see: the reports are a touch on the optimistic side when it comes to volumes and assumptions. But, hey, that’s their job, I guess, and after all they have at least dropped their masks now: Yankee Group call it fairly openly a “gold rush”. And what happens then we had been shown a long time ago: you end up eating your shoelaces. So maybe this is less of an app bonanza and more of an analyst bonanza then…

EA Mobile, Namco Bandai and the State of Carrier Decks

By Volker

On 23/09/2009

In 1

After many rumours and ominous statements that it was “reviewing its activities” Namco Bandai confirmed today that EA Mobile will thenceforth act as its distributor for mobile games outside the US and outside any app store.

After Taito and Eidos, EA Mobile just gobbled up another major distribution deal and the exodus from J2ME games distributed via carriers continues. It also means that EA’s dominance over the operator decks has just increased a little more yet again. It had estimated (back in June) that its 2009 mobile revenues would reach $185m (although this arguably includes Apple’s and other people’s app stores as well as embeds).

What is worrying is that this cements the oligopoly of games distribution in all major markets. EA Mobile, Gameloft occupy the top 2 slots very comfortably with Glu an equally comfortable but distant third. I-Play, Digital Chocolate, Real and Connect 2 Media are fighting for place and Xendex, Handy Games and a few others seek (and sometimes find) niches to prosper. THQ Wireless, Vivendi Games Mobile have departed. Player X found a new home under the mighty wings of Zed. And then? If the above companies all manage to maintain a healthy business, this might be enough; there are silverback gorillas in every market segment. If not though, this might become a doomed sub-sector; the limelight would then be on the (failed) ecosystem operators tried to build: overly fragmented with everyone of them wanting it just so and just their way rather than agreeing on a largely unified structure and processes pressed margins from a system that has been tough from the outset (handset fragmentation and international spread mean fairly high cost per capita anyway).

The accumulation of external properties arguably also mean that EA will need to run a business that is almost a combination of a publisher and an aggregator (with its very own challenges). The issue of shelf position (will they give Tetris and the Sims undue preference over Space Invaders, Pac-Man and Cooking Mama?), the commercials of their own deals (they anecdotally paid Hasbro a handsome sum), and the generally dominant position will all come into play and it is inconceivable (well, is it really?) that their partners will continue to play ball.

It might of course only be a brief interregnum on the way to an app store world. Smartphones are very much on the rise and, in that world, such stores seem to rule. Apple has taken the lead, Android followed suit and new stores are springing up almost by the day, which also includes operator-led ones: Orange already has one, Verizon Wireless has announced one (mobile web-based) and so has Vodafone (which might actually be bigger than Apples) as well as many others. The OEM all do the same (even though some carriers want to disallow them): Nokia Ovi, Blackberry App World, Sony Ericsson, LG, Samsung, you name them, they have it. The question of course is if that might mean the same thing all over again: will they again want it all just so? Will they again have it just their way so that a user would have the unique flavour of operator X on handset Y in this unique way, meaning that – again – thousands of SKUs would be required to service them? Groundhog Day? I hope not!

Image credit: http://www.antitrustreview.com/files/2007/07/files51lsaydhrsl.-ss500-.jpg

Carnival of the Mobilists #192

By Volker

On 21/09/2009

In 1, Carnival of the Mobilists

The 192nd iteration of the Carnival of the Mobilists is under way. This week’s edition is hosted by C Enrique Ortiz on his About Mobility blog and features an overview of Opera Mini 5, a background story on app stores (juicy: written by a Qualcomm exec), some stuff on mobile learning and, last but not least, my own “little” contribution on mobile’s role in the transformation of the music business (which also received a “favourite of the week” note; thanks C Enrique!).

Check it out, it is well worth a read! You’ll find it here.

Is Spotify finding the Business on the Move?

By Volker

On 09/09/2009

In 1

Spotify was a breath of fresh air when it hit the markets. Finally, there was someone who combined the ease of iTunes with unsurpassed breadth in catalogue. Lots of songs. Always available. And even the ads weren’t all that bad (which is why few people upgraded to the ad-free premium version [more on this below], much to the dismay of label executives who – rightly – fail to see the greater good of dependable revenue streams from those few ads; although they are getting more, mind you).

Then, back in July, Spotify submitted its iPhone app to Apple. And the big wait began. After lots of back and forth and speculation if it would or would not, Apple finally approved the app. So now it’s live, and not only on the app store (where it ranked #1 on the UK store when I checked tonight) but also on Android Market. A Symbian version is in the works.

All reviews I have read are raving: from “very impressed” (and that’s the Daily Telegraph no less) to having “to pry it out of my cold, dead iPhone” (Wired), everyone waxes lyrical about the thing. It comes with a load of stuff, too: streaming all your favourites from over 6m tracks on the go sounds promising, and one can also sync up to 3,333 (what a number!) songs for offline use in the networks’ broadband doldrums.

The trouble (!?) is: you can only use it as a premium subscriber, which means forking out £10 per month. Which brings me conveniently to the key point, which is the business underlying model.

The labels are fairly happy, it seems. Because they got shares in Spotify itself. Some more equal than others though: the majors are said to have received a disproportionately high stake). The same report claims though that ad income is only £82,000 and, in the UK, only 17,000 users had signed up for the premium version. However, shareholders and all that, Spotify still has to pay the labels a fee per streamed track, irrespective of the user paying or not. Tricky model, that. Note though that this might be different in other countries: according to reports, the world’s largest major, Universal Music is making more money from Spotify in Sweden than from iTunes!

Anyhow, all this was before the mobile app, and mobile may well be the game-changer for them… The launch of the iPhone app, glorified niche audience or not, seems to have gone fairly well (#1 position on fhe app store within days of launch). Spotify reckons that mobile is where its future lies. And this had been echoed (and well ahead of the actual launch!!!) by others in the industry, and perhaps rightly so: if users are used to (and in love with) a service they are more likely to pay for it if that means they can also have it whilst on the road. For the marriage of music with the world’s leading MP3 player come mobile phone, the iPhone, this seems to be made in heaven: I can have the smallest model and still carry 6m+ tracks around with me? Wow! Here’s value-add!

The much-discussed freemium model it is then: get them hooked on the free desktop app and convert them to paying users on mobile. It has long been known that users are more likely to pay if stuff is portable (I can still recall the disbelief of music executives when they realized that people would pay more for a monophonic ringtone than for a full-blown music track). And whilst now the link between (free) basic service on the desktop and (premium) mobile service is new, the principle is old and proven: and it is simply added value (plus the little things like being used to paying on mobile and having convenient existing billing models in place). If the user perception is that they are getting value for money, they are willing to pay. And if it is for such a fairly special thing such as music (don’t we all love and nurture our very own musical mix tastes?), the step is even easier to make.

Spotify fully expects this to fly: they are upgrading their servers already. Labels are said to be still a little jumpy but I reckon their experiences over the last decade or so have shown that their is a need to re-think incumbent models…

Handmark powers Samsung’s App Store

By Volker

On 02/09/2009

In 1, OEM

Samsung’s new app store (no one can do without one these days!) will be operated by Handmark and is set to go live on 14 September (2009, that is), I read. The respective site is (sort of) live and appears to accept registrations of prospective vendors. Go here if you feel like it… Launch will be in the UK, France and Italy first. No word when the others follow.

According to the press release, the content available will consist of Windows Mobile and Symbian s60 titles and will be available on the Omnia, I8910HD, Omnia II and Omnia Lite (so a true omni-store then). Billing is available via both credit cards and operator billing, which is – on the face of it – good (i.e. plain and simple credit card-billing doesn’t often work; Apple’s app store is an exception, I’d say, because input is via iTunes with which people are already familiar).

I’ll spare you the rest of the lyrical odes to the various partners… But let’s try and break this down: how big will this thing then be? Samsung is a force in mobile and its Omnia phones have had some very significant success indeed: in some markets (Germany was one), the Omnia outsold the iPhone by some margin (in December 2008, the Omnia had a 14.9% share of the German smartphone market compared to the iPhone 3G with 7.6%). It also launches in India now. I could not get my hands on solid sales numbers though (in the top 10 list by accessory sales for June, the Omnia came in on #10)… However, anecdotally, it is behind Nokia, RIM and Apple in global smartphone market share. So if we say that, on a global basis, there will be about the same number of devices around, that would make the phones a good success for Samsung.

However, when it comes to usage, I am not sure if the Omnia can compete with the iPhone. If we take ad impressions as an indicator (and it really is just that), we’ve seen that the iPhone’s 8% market share translates into 40% ad impressions. And because a lot of apps (and web “apps”) use ads, I think it is probably safe to assume that usage is higher. And this is arguably the crux of app successes: they need to be available but they also need to be discoverable and usable, and all of this with a lot of ease. Will they succeed? I hope so as it would do a ton of good to the industry would there be more than the niche player Apple. Their new TouchWiz SDK (see here) should help ease development for better UI, and the features of the store they announced look decent so far, so let’s keep our fingers crossed!

Image credit: GSM Arena