Applications steal the march over Browsers in Mobile media

An year back, i was blogging how Apps are the next generation of Internet Consumer Experience. Those were the heady days with App stores being launched left, right and centre. The pace has abetted as the app store bubble has gone poof… but the apps story remains as relevant and as dominant as ever.

A ComScore study MobileMetrix 2.0 which measures engagement and behaviour on smartphones puts Applications one up over mobile browsers. The analysis of the share of time spent across apps and browsers revealed that even though these access methods had similar audience sizes, apps drove the lion’s share of engagement, representing 4 in every 5 mobile media minutes. On similar lines, analysis of the top properties also revealed widely varying degrees of time spent between app and browser access methods. In both these metrics, Apps outscored Browsers by a margin and more. The chart below demonsstrates Mobile App usage over Mobile browsers for the most used portals on internet:

 

As Internet access goes Mobile, the apps are beginning to power more and more access and engagement. Apps outscore mmobile browsers in more than a handful ways- Whether it being a push medium for relevant and timely delivery, or in being API guided content awareness and monetization, all screen presence or alternative solutions or powering the Web 3.0 (Internet of all things). Brands particularly are more keen to take the app route to consumer engagement because of the versatility of the app experience which is so relevant to the brand. Integrated service delivery is the key for applications over mobile browsers. Integrated services are those that work on any delivery medium that the consumer may be using: cable, DSL, wireless, wireline or satellite rather than being tied by transaction to one delivery medium.

WIth the iOS, Androids and WP8s driving usage of apps on smartphones, Apps also have a critical mass backing their growth aagainst mobile browsers.

 

Developer Interest in Android wanes as Hybrid Apps take over

HTML5 is taking over as the key enabler of Internet on mobile phones. The Internet of all things and cloud based convergence will be a key theme in this decade and it will be powered by a tight integration powered by APIs. The future will be about Platforms on which devices and services will be enabled will be powered by applications both native and web based. This post examines the platform, applications and developer intent.

A recent survey by Appcelerator finds that Apple iOS leads the developer interest charts with 89% intent. iPad comes a close second at 88%. On the Applications side, the loser is a very unlikely candidate: Android (79% on the Android phones,64% on the Tablets and 51% on the ICS platform). Appcelerator in its quarterly survey figures out that Android is gradually slipping down mobile programmers’ priority list, with HTML5 powered Web apps stepping in to as an answer to development difficulties. HTML5 ended up showing 67% positive intent from developers.

The wanning interest in Android platform is being attributed to the Fragmentation of the Android platform. The survey concludes that a lot of developers are unhappy with the fragmentation of the platform as well as the fragmentation of the monetization platform. Fragmentation impedes monetization on the Android platform. Customization for screen size, feature sizes, even skins that device manufacturers have put on top of that eats into resources allocation on the platform.

79% of developers think that HTML5 was going to be a component of people’s apps in 2012. Only 6% developers plan to make all-out Web app that runs in a browser; a much larger 72% plan a hybrid approach that wraps native interface elements around an app that relies on a browser engine behind the scenes. A hybrid has some native code on device, but content will be delivered via HTML.

For developers on open platforms it’s a tough line to walk. They want to have an open OS, but openness means they’re going to have fragmentation.

Web applications–those built with technologies such as HTML, CSS, and JavaScript that run using a browser engine–answer at least some of Google’s fragmentation challenges.Web apps rose slightly to 67 percent, passing Android tablets in the last quarter. Thus HTML poses the answer to fragmentation.

The good news for Android is that even while it has suffered recent declines it fares much better than Blackberry (16% Developer interest) and Windows (37% developer interest).

The good news for Google is that developer interest is on a rise for Web-App hybrid environment like the one running on its Chrome OS and Chromebooks.

App Usage powering Mobile Internet growth

The era of mobile computing, catalyzed by Apple and Google, is driving among the largest shifts in consumer behavior over the last forty years. Impressively, its rate of adoption is outpacing both the PC revolution of the 1980s and the Internet Boom of the 1990s. Since 2007, more than 500 million iOS and Android smartphones and tablets have been activated. By the end of 2012, Flurry estimates that the cumulative number of iOS and Android devices activated will surge past 1 billion. According to IDC, over 800 million PCs were sold between 1981 and 2000, making the rate of iOS and Android smart device adoption more than four times faster than that of personal computers. While the Internet began its commercial ramp in 1996, iOS and Android devices have seen double the number of device activations during its first five years compared to the number of Internet users reached during its first five years (Internet 1996 – 2001 vs. Smart devices 2007 – 2012).

On top of this massively growing iOS and Android device installed base, roughly 40 billion applications have already been downloaded from the App Store and Android Market. The average smartphone user, is beginning to spend more time in mobile applications than they do browsing the web.

This chart by Flurry compares how daily interactive consumption has changed over the last 18 months between the web (both desktop and mobile web) and mobile native apps. Ever since June 2011, time spent in mobile applications has grown. Smartphone and tablet users now spend over an hour and half of their day using applications. Meanwhile, average time spent on the web has shrunk, from 74 minutes to 72 minutes. Users seem to be substituting websites for applications, which may be more convenient to access throughout the day. People are now spending less time on the traditional web than they did during an year ago. This drop appears to be driven largely by a decrease in time spent on Facebook from the traditional web. In June 2011, the average Facebook user spent over 33 minutes on average per day on the website. Now, that number is below 24 minutes. Time spent on the web without Facebook has grown at a modest rate of 2% between June 2011 and December 2011.

Even while, the growth in time spent in mobile applications is slowing – from above 23% between December 2010 and June 2011 this year to a little over 15% from June 2011 to December 2011. The growth is predominately being driven by an increase in the number of sessions, as opposed to longer session lengths. Consumers are using their apps more frequently.

Facebook is the most used app on Android among 14 – 44 year olds, surpassing usage of Google’s own native, pre-installed apps. Additionally, Facebook Messenger became the top downloaded app, at least one time during 2011, across more than 100 different App Store countries. In the U.S., the largest App Store market, Facebook Messenger ranked as the top overall app across all other apps across all categories.

Rise of Applications (as next gen Internet Delivery medium)

In few of my earlier posts, i have blogged about Applications based Internet delivery as the future of Internet. To me applications are far more superior internet mediums because of the versatility of the purposes they can solve (and so, There’s an App for that); the always on and always connected nature of apps and the API-led integration across all web based resources. The other benefit of Apps include the fact that Mobile apps using Web technologies are easier to build & deploy on multiple platforms. Also, Apps are activity led in terms of being mobile and not just relaying static information, but making dynamic linkages with various engines and APIs to present most relevant results. Daily interactive consumption has changed over the last 12 months between the web (both desktop and mobile web) and mobile native apps.With profusion of apps and with a large multiple of results basis how one App interacts with its environment, there are search engines for Apps returning the exact thing needed by relevance, instead of returning just the pages coherent with the search string.Thus Apps will be a better discovery medium of the web and the trend of Apps super-ceeding web pages is “on”.

Mobile App analytics firm, Flurry says that daily time spent in mobile apps has now surpassed web consumption. The average user now spends 9% more time using mobile apps than the Internet. In June users spent an average of 81 minutes daily on mobile apps, compared to 74 minutes on the web.This compares to 66 minutes on mobile apps daily in December of 2010, and 70 minutes spent daily on the web. And June, the average user spent just under 43 minutes a day using mobile applications versus an average 64 minutes using the Internet.

As smartphone usage continues to grow, we’re going to see more tech companies pursue aggressive mobile strategies and with Mobile Internet, the key delivery medium will be Apps. Whats also working in favour of apps will be the ability to integrate dynamic content into the App and enhance the user engagement.

Semantic Web: Internet beyond Search and Social

As Internet outgrows search, Semantic is the new key for information search, personalization and delivery.

With the advent of Social Web (Web 2.0), an amazing amount of online information continues to get created, and content continues to expand at its breathtaking pace. There are over 140 million tweets being posted every day, 48 hrs of video uploaded to YouTube every minute and more. Internet users would need tools to help them sort out data for them according to whats relevant and pertinent to them. It’s going to be harder and harder to find information because there’s so much out there. Without a mechanism of data sorting and discovery a lot of the information will never be used and most and all traffic will congregate in a few sites only.

A good index of sorting out the information overload would be data relevance, personalization and customization basis the user, his context, his profile and the social networks that he is a part of. I have in earlier posts discussed about the applications being the best deliver medium for the future internet: always on, always connected, active, learning, mobile, dynamic, intelligent and platform agnostic. Content that is customized for a particular individuals’ preferences can be chosen and presented in a variety of ways. Apps learn what users like and gets smarter as they use it. Semantic web leverages ontologies and meta-data to build paradigms of user online behavior and customizes the internet experience according to the user.Thus Semantic web moves users very quickly toward a world in which the Internet is showing us what it thinks users to see, but not necessarily what users need to see.

Thus, the same Google search performed by two different users could turn up entirely different results, as the search giant tweaks its suggestions on each individual’s behavior. Personalization can also require sacrificing privacy: customization works best when users are willing to hand over data about what they click, how long they spend reading it, what sites they follow, and more.Users, on their part, will be comfortable allowing apps to track them as long as companies prove giving up some privacy delivers better, more helpful services. People are willing to share more and more information if they see that they’re getting value out of it.

Consensus gathering on Apps as the Face of Internet (Internet of all Things)

The app Internet will dramatically alter the Web as users know it, force today’s leading technology vendors to adapt to a new business environment, and affect every job function in the business technology (BT) organization. Despite industry’s preoccupation with cloud computing, a standalone cloud or web solution is not the web architecture of the future.
Forrester Research CEO and Chairman of the Board George F. Colony.

I have always emphasized as the Internet delivery medium of the future: Always on, active, connected, Usage specific. Read my earlier posts on Apps: The new face of Internet ( Part II and Part I).

Inherent in this is the fact that Internet will evolve from the laptop, smartphone delivery to a more ubiquitous presence across a range of devices.The App medium will also be a driving force behind Semantic Web, the internet of all things. Internet in your Phone, TV, AC, Microwave, Electricals and more. Business organizations will have to focus on creating on alternate delivery mechanisms around their user and the solution through applications. Business Process Professionals will not create new applications without the app Internet, CIOs must prove they can embrace customer-centricity through the adoption of the app Internet, and Security & Risk Professionals will have great job security as companies are challenged with how to protect their enterprises in this new model. As the footprint of internet delivered through these alternate sources increases, app based solutioning will be critical.

So while, Apple has established leadership in the app Internet space, and web-centric companies such as Google and Facebook are risky bets in the app Internet market due to their overreliance on web-based technologies. Forrester estimates that the app Internet market was $2.2 billion in 2010 with a compound annual growth rate of 85 percent through 2015. Others like SAP and Oracle, must determine how they are going to price these apps, and PC vendors such as HP and Dell must reform the PC experience to focus on app stores, which will be on every connected device in the future and serve as the keys to the Internet. Microsoft has important pieces to enable the app Internet — such as its application framework Silverlight — but must transition to a world of low-cost, dynamic applications and out of the old desktop licensing model.

It also opens up a green field for innovators and other ventures to test the waters, offer innovative solutions across a range of devices. There is always ground for start-ups to come up with ground breaking solutions in here.

A thumb rule for the Developer Dilemna: Free or Paid apps?

Should Mobile App Developers Focus on Free or Paid Mobile Applications – With so much Demand for Mobile Applications, Does it make a Difference? (A Linked in Discussion thread with my answer)

As a rule i believe, that the more progressively an app is oriented to a niche and focussed usage, the greater the capability of the app to monetize. An example here would be of a health care app which could bring certain benefits in terms of monitoring health or medication for the user. Monetizing such an app, which is deeper in scope of its objective would be relatively easier. Compare it against a weather app, and the ability of the app to monetize would diminish, though the target group would be a much larger section.

Secondly within its objective/ambit/usage, the more holistic (end to end) an app is in terms of resolving its objective, the monetization opportunity would be that much greater.The challenge here is not so much making the app as its discover-ability. But then, marketing the app rightly to the influencers in that niche can be an interesting way to make the app popular. In reference to the health care app example provided earlier, doctors or physicians are the ones who the app needs to market itself.

Secondly, as a pointer, the current app eco-system with its free, paid and freemium models will not possibly be the best in terms of monetization. Developers would make money when their apps are channels or media for advertisers to engage their customers better (and i am not talking advertising here). Refer here for details on apps as media channels.

A Developer Manifesto on Pricing

A day after Illja Laurs, CEO GetJar issued a statement on how operators are being marginalized by their customers when it comes to mobile apps and how there’s little hope of getting them back, another post by GetJar CMO Patrick Mork deserves mention. Patrick Mork has outlined four guiding principles he thinks app stores should use to help developers make money. Except that if you read between the lines it states how operators gag the “development” and “discovery”. The blog by Patrick measures up the gag tactics at Amazon’s Android store for instance. It also underlines how developer friendly policies at GetJar have helped them catapult themselves into No.2 Apps store by downloads (when in fact they are are an “independent” and “others” app store).

Here’s quoting Patrick.

1. Let developers set their own price. Developers are big boys and girls. They know how important price is and they know it can only be used so often to be effective. Unlike app stores, they also only generally have a few apps to use this on so when they use it they need to make it count. It’s fine to suggest pricing to developers but ultimately only they know what they need to make a living and they could / should study consumer behavior enough to understand what the most effective price point is.

2. Let developers choose their billing partner. We compete in an open economy. In particular, Android is supposed to be open (though the door is closing more quickly with each passing day). Billing is no different. There are better and worse suppliers. Developers should be allowed to work with multiple partners to ensure a) they have the partner that converts best and b) they have the partner that monetizes best. If an app store has its own billing that’s fine. Give developers options and ultimately they and consumers will pick what solution works best for them. Otherwise it’s like going to the movies and always having to pay with Diners Club (who even uses that anymore?)

3. Don’t tie down developers’ ability to promote across store fronts: In an ideal world, Android distribution is supposed to be open (thank you AT&T for helping us get closer to that reality). App stores shouldn’t hamper developers’ ability to leverage promotions or placement in other stores through rigid pricing policies. App stores should realize that developers will look to different app stores for different promotional opportunities. If I can’t get app store A to feature their game but App Store B will feature it if they discount it then why not be able to this? Android is supposed to benefit developers through open distribution, if stores abuse pricing to reduce this distribution it defeats the whole purpose behind open distribution and ultimately makes it harder to pay the rent.

4. Show developers some respect for the product they create and communicate that: If app stores set pricing it should be in conjunction with developers. At the very least, App stores should provide multiple price points to choose from as well as case studies, best practices and advice to developers on when / how to manage the price life cycle to optimize revenues. Back in the much criticized carrier days as a developer I would often work with carriers to agree on pricing and we would jointly agree on how to manage this. App stores should and do have an opinion on pricing of apps given their wider view of the market and they should communicate this. However, to build goodwill they should work with developers and not independently of them.

The app space is an amorphous, rapidly shifting landscape. The technology, distribution and pricing are ever changing and make it difficult for developers to build great products and successful monetize them. What the app stores need to do is give developers flexibility, tools, support and advice on how to this and not dictate to them. As app stores we need to keep in mind that ultimately content is what consumers come to us for. It’s a bit tough to meet that demand if you ignore developers or worse, impose restrictive commercial policies on them. We can do better than that.

In effect Patrick has asked operators and App store makers to accord the correct status to developers, which they deserve, that of an equal. I wonder how many people would be listening to that piece of advice

Mobile Apps as media channels

Sharing a perspective paper on the future of Mobile-applications as media channels that allow brands and sponsors to engage their users and consumers. The Potential of this market is currently not measured but estimates put the magnitude of spends on mobile media at 1/3rd of total marketing budgets.

Reference posts:

New Monetization paradigms sought to support Profusion of App stores
Apps: The new face of Internet (Part II)
Apps: The new face of Internet (Part I)
Evolution of App Stores (Part II): Putting the Brands perspective to Monetizing Apps stores
Evolution of App Stores (Part I)

New Monetization paradigms sought to support Profusion of App stores

The Profusion..

The count of application stores in September 2010 was 95 and I expect it to have crossed 150 as more and more “independent app stores” stores crop up. The latest in this count includes MDLE Alliance, Opera and Allview Mobile, each making their store announcements on consecutive days.

App store downloads and usage has seen huge growths. The first phase of growth has been a feature of in-device apps stores: Apple, Android, Ovi, Blackberry have dominated this era. Consider calling this “Apps as a support to device differentiation era”. In an earlier post, I had mentioned this as the 1st Gen App stores. The 2nd Gen App stores are the Operator apps stores. Essentially, these are white labeled independent app stores which the operators customize to themselves in the hope of differentiating themselves from the other. The revenue models in both these app stores is basis data downloads (for operators) apart from app subscription, in-app purchases and ad revenue.

The current profusion of App stores mostly independent ones, with no device integration and no short-cuts to discovery could thus be attributed as an “app bubble”. Having a few thousand applications in a web-based server, does-not guarantee anything for the app stores as long as there is no traffic. After traffic comes the question of monetization, which would be a far shot for most of the mushrooming apps stores.

Where’s the Money?

The point that I make here is that independent app stores would not be successful if they follow the 1st Gen App store model of monetization through App downloads and purchases. Thus these App stores would need to go beyond the current revenue and monetization paradigms.

Relook at Monetization Paradigm

The answer to this conundrum is provided for by the 3rd Gen App store model, where apps are a channel for brands to engage consumers. This differs from the ad being served up by the likes of Admob and inMobi and instead reaches out to much deeper levels of consumer interaction via APIs. What causes this shift is the fact that more and more of user behaviour is shifting “online” and Apps which assist this behaviour are likely to find “user stickiness”. Apps thus are the next gen internet delivery medium for the user delivering relevant targetted content and context to the users.

For instance, if my Facebook page shows that I am a “fan” of a brand, next time, I am in a mall which has the brand, there could be push communication asking me to visit the outlet to check out the latest offerings et all. This is a complicated process and would require a lot of APIs and Engines tracking consumer behavior and offering brand-relevant messaging at the right times. In essence, apps would thus be re-defined from “a stand alone app to augment the phone functionality” to a “active media channel which would be used to engage users and consumers by those who intend to do so”. That would be the next evolution in app-terms.

What would also be important in this context is that the app store is able to trace the user across different interfaces: Mobile, Web, TV and Car. The ability of an Apps store to combine these interfaces would give it the unique ability to profile target campaigns according to relevant audiences. How much money is there for taking? Lets just begin by saying this would be a substitute to TV advertising: far more focussed and relevant.