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Innovating Without Constraints: Rejected Apps Teach us a Lesson

by Alex Panelli

With Apple’s removal of Google Voice from it’s App Store this week, will application proponents still be as adamant that apps will win out over the mobile web?  In my last blog post, I mentioned one of the reasons that the mobile web will win out is due to the seemingly increasing editorialization by the app stores of submitted applications.  As more carriers and device manufacturers launch their own app stores, third party developers will increasingly innovate, encroaching on “native” functions that were once the proprietary domain of devices manufacturers and operators.  I believe we will see an increase in the seemingly arbitrary rejections, especially as the number of apps continues to increase dramatically.  Once the functionality gap is closed between apps and the mobile web, it will only be a matter of time until developers are free to innovate without constraints.

I’ve included a short article by Mike Masnick from Techdirt that I thought was particularly good, as it bolsters my argument for open solutions:

Apple Says No To Google Voice On The iPhone

from the shameless dept

As we wait to hear if Spotify's mobile app gets approved (I heard a rumor that it was, but have seen no proof yet), we hear of another questionable Apple iPhone rejection: the Google Voice iPhone app has been forbidden from the iPhone, though the reasons aren't entirely clear. Still, it does show that Apple doesn't care who you are, or how big a name. If it doesn't like your app, too bad. Once again, this seems like an argument for why more open solutions will win out in the end. Not only do users not have to worry about arbitrary rejections like this, but innovation will happen much faster on open platforms where each innovation doesn't need to be approved by a mercurial secret cabal.

Mobile Web vs. Apps: Closing the Functionality Gap

by Alex Panelli

When Google’s Vic Gundotra says mobile apps are not the future and consumers will turn to the mobile web, you cannot help but think that they are hypocrites.  After all, they have created some powerful apps for the iPhone and have developed the Android Market where consumers can download apps of all kinds.  Mobile application distribution company GetJar and its CEO Ilja Laurs also forecast a peak in app development in 2009, followed by a slow decline.  Today, CMO of Getjar Patrick Mork fired back at Google and clearly stated that apps are here to stay and will not be overrun by the mobile web.

So has the age of apps ended and will companies stop producing mobile applications as the pendulum of sentiment swings fully back to the mobile web?  Will Getjar's prediction of a flourishing future for apps come true?  What we believe each of the forecasts points to is the future of mobile when the functional gap between mobile web services and applications is closed.

As I mentioned in my previous post, ultimately a developer’s decision to build a mobile web service or native application will largely depend on the nature of the data (static or dynamic) and the expectation of the end user. As a general guideline, we believe that services that utilize dynamic data (that is, data that change frequently) will lend themselves well to the mobile web, whereas services that use data that changes infrequently (or never), and services which consumers expect to have without the need to make an mobile internet connection, will more likely exist as on-device applications.

We have Apple’s iPhone app store to thank for the increased visibility, accessibility, and demand of mobile services. Now, several others, including RIM, LG, Nokia, have launched their own app stores. It is quickly becoming apparent, though, that the app store phenomenon that has enabled apps to become so popular could and likely will become an Achilles’ heel.  Early on, a major benefit of being on the app stores was visibility and distribution – basically, cheap marketing.  The stores are crowded, disorganized, and remind me of the issues that mobile carriers went through with their own on-deck catalogues!  Now, discovery has become a problem, requiring developers to market apps much in the same way that they would market mobile sites.  Lee Williams, executive director of the non-profit Symbian Foundation, aptly pointed to the fact that app stores are simply “buckets.”  In addition to the lack of user-friendly stores, app store owners are censoring the content and in many cases are editorializing what lands in the “What’s Hot” sections. 

            The bottom line: all things being equal, we believe that consumers will always choose the fully open and uncensored option over “semi-open” alternatives. As soon as the gap between mobile web and mobile applications is closed (much in the way it is now on PCs), with few exceptions, the pendulum will swing back to the mobile web.

 

 

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. 

 

Fragmentation in Mobile Data is Here to Stay

by: Alex Panelli

I remember pitching to investors back in the early days of Trilibis (2004 & 2005). When we told them that we had a publishing platform (SmartPath®) that was able to overcome much of the fragmentation of platforms, networks, and devices, many of them pushed back, believing that the mobile phone computing space would go the way of the PC internet; eventually there would be an adoption of network and device standards, and that the market would settle on one dominant platform (ala Microsoft Windows for PCs) with a couple of niche offerings (Mac, Linux). We had always believed that this massive convergence was unlikely to happen in the mobile space, and that instead we believed that fragmentation would accelerate and proliferate in the future.

Well, the future is now the present, and while we may have been wrong about some things, we were right on the money in this case.  Fragmentation has become an enormous challenge in the mobile data world.  Android, BlackBerry, Windows Mobile, Symbian, iPhone, mobile web, Java, BREW, the list goes on, and the OS/application platform issue is only one dimension of fragmentation.  The challenges of numerous screen sizes and unique APIs on devices, the multitude of carrier publishing guidelines and network requirements, and literally scores of different browsers have substantially compounded the problem. I won’t bore you with a detailed explanation of every dimension and element of fragmentation... it is not the most important question. It’s here, it is real, and it is growing.

The more important question is: WHY is this space so fragmented, and (the related corollary question) WHY has it not converged on some set of standards?

To answer this question, we must look back to the lessons learned in the wireline PC Internet industry.  Most of the high-speed wireline ISPs (on the cable modem side: Comcast, Time Warner (Roadrunner), Cox and others; on the DSL side: all of the baby bells) were investing in network infrastructure, looking to displace the slower dial-up companies that were doing both network connectivity and content programming. This took enormous amounts of capital investment, much of which was financed with debt.

Today, we see that these ISPs have been relegated to “dumb pipe” status, are laden with heavy amounts of debt, and often have a difficult time differentiating their offerings from competitors. We even see some of these now-commoditized ISPs trying (unsuccessfully) to institute slotting fees to prioritize the traffic of some of the largest web content companies, and bandwidth surcharges to consumers who use “too much”. The wireless operators have taken notice as well, and continue to invest dollars and human resources into content programming, in an effort to differentiate their respective offerings and avoid the commoditization that wireline ISPs have suffered. This differentiation has largely been built on technological fragmentation.

There is more to this story, though. Let’s closely inspect the “box makers” such as HP, IBM, Dell, Gateway and the plethora of niche PC manufacturers. A quick inspection of the financial results of these companies will make you realize that it has been a “race to the bottom” with massive price wars and cost cutting methods. Just several days ago, HP announced its latest Compaq Mini netbook will sell for $.99 if you sign up for a 2 year mobile broadband plan with Verizon Wireless.  Noting the failures of the PC industry, Amazon is already negotiating hard with content providers for its Kindle so that it does not become that dumb pipe.  Currently Amazon takes 70% of the subscription revenue while reserving the right to re license the content to other device makers. Apple may be making more money giving away content (apps) on the iPhone than the iPhone itself.  The mobile OEMs do not want to repeat this story and thus continue to innovate on form factor, screen size, keyboard, custom APIs, browsers, and many other aspects. More recently, we observe handset makers like Apple and Palm differentiating on software in addition to hardware.

So where does this leave us?  Whether we like it or not, differentiation from carriers and OEMS is here to stay and thus we operate in a world where fragmentation thrives. To be successful in mobile data requires a solution that strikes a friendly balance between innovation and scalability. Without it, the industry is at risk because investment costs become too high to deliver returns needed to ensure survival, let alone explosive growth.