Saturday, July 18, 2009

The Mobile Industry’s Pendulum of Sentiment

By Alex Panelli 

Those who have worked in the mobile content industry for several years might describe the business as swinging from one extreme to the other every few years. I liken the activity to a perpetually swinging pendulum, witnessing sentiment range from the mobile web to the obsession with downloadable apps and back again.

The first swing forward occurred in the 90’s, when mobile web was the hot new technology.  Many early movers (both investors and entrepreneurs) envisioned a PC internet experience on your mobile device, and as OEM’s scrambled to produce phones that had the capabilities, carriers fell far behind in infrastructure needs.  The promise of a mobile internet seemed dead before it began. In the early years of this decade, we frequently heard the mantra “WAP is crap” repeated over and over in conversations.

            That is when the pendulum began to swing to the world of downloadables via Java and BREW in 2002, a far better alternative for users, but companies began incurring enormous costs to develop, port, and maintain downloadable applications.  This became especially true for non-gaming network applications that required frequent updates throughout their lifecycles. As a result, we witnessed the pendulum of sentiment swing back to WAP with the dramatic improvement of carrier networks, data offerings and the introduction of vastly advanced browsers. 

            More recently, we’ve all witnessed the pendulum of sentiment swing back to downloadable applications in a dramatic way. Apple’s introduction of the iPhone and its App Store, and the announcements of a dozen or more new app stores around the world, leave many folks wondering whether the pendulum will stay with apps or swing back to the mobile web.  With so many different application platforms (iPhone, BlackBerry, WinMo, Android, Palm WebOS, Symbian, LiMo, and others) out there, and as network operators and device manufacturers continue to differentiate and customize (leading to fragmentation), the same development, porting, and maintenance cost issues with apps will once again come to life. On the other hand, browser-based mobile services are still inferior to applications in both UI and capabilities (like access to device GPS and camera APIs, for example) and network data speeds across the US still leave a lot to be desired, so where does that leave us?  

Implications

First, mobile browsers will become far more powerful in the next year or two, dramatically narrowing the gap in both UI quality and functional capabilities. Even though we will continue to see dozens of mobile browsers (differentiated) in the marketplace, and operators with very different publishing guidelines for services running on their respective networks, solutions like our SmartPath® platform will make this dimension of fragmentation manageable. Second, apps will continue to become more fragmented among the OEMs, making it even more cost prohibitive for a company to develop an app for all platforms. Third, we will see a backlash against app stores as editorializing gatekeepers who stand between content and customers and take too big a cut of revenues.

            That perhaps paints a more ominous picture for apps than I mean to portray, but I do believe these events will make the pendulum stop swinging so violently, and instead, there will be a world where certain types of services must be in the form of downloadable applications, while the vast majority will be handled via the mobile web. 

Happening Now

There is evidence of this trend already. Comscore mobile browsing data from February through March 2009 shows that when an iPhone user wants to use a map or find out the weather, these functions are overwhelmingly relegated to apps.  The majority of other functions, however, are performed via the mobile web.  Applications exist for eBay and Fandango, but iPhone users prefer to use online auctions and search movie times via the mobile web. 

At Mobilebeat 2009, Google’s VP of Engineering, Vic Gundotra, spoke to this very issue.  Even Google applications will not be able to handle all functions, and consumers will turn to the mobile web.  Contributing to this shift – the fragmentation of app stores (as more and more come on board), yet another example of fragmentation in the industry and proof that while it’s here to stay, we must find solutions that fit into this world of differentiation.  Trilibis Mobile’s decision earlier this year to have SmartPath focus on addressing mobile web fragmentation was a strategic move that is in line with Google’s vision for the future. 

The App’s future

So what types of tasks should be based on an app and what should be on the mobile web?

            The answer may not seem completely clear, as app developers have found great success – from the useful to the obscure – while others never break the Top 50 in iTunes.  There IS a clear answer, though.

Any data that is persistent on a user’s phone is best suited to an application, while data that constantly changes should be through the mobile web.  As evidenced by the Comscore data, several native iPhone functions skew toward apps because users expect basic functions like the map, weather, address book, and now voice memos to be on the phone and ready to use.  Likewise, this behavior will likely be seen on the PalmPre, Blackberry, and others as apps become more commonplace on those devices.           

I realize the mobile web versus app debate is not new, and marketers are struggling to determine what is best for their company.  Most recently, Phil Barrett of B-Street Communications had an interesting blog post about this very debate, and he’s certainly right – there’s room for both provided that companies know what their audience wants.  

I believe it is about identifying the opportunities when an application simply makes sense and that takes knowing how your customers use their mobile devices.  Unfortunately for some, that is not an easy task. 

 

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