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Are Mobile Apps the Next ‘Killer App’?

Tue, 04/28/2009 - 8:08am
Alberto Montesi

The buzz coming from the floor of CTIA Wireless 2009 was all about mobile applications. No doubt, we are experiencing a mobile applications renaissance today, but to be fair, they are nothing new. Companies like Handango, Handmark and, yes, even Flycell, have been offering mobile applications for years.  So why the sudden attention, and are mobile applications really the next “killer app”?

Alberto Montesi
Montesi

Let’s be clear on what really has changed. Apple introduced the iPhone, which opened up minds in the consumer market as to what a phone could do beyond phone calls and text messaging. Its elegant design was a game changer, but beyond the touch screen, how advanced really is this phone compared to capabilities in Windows Mobile and BlackBerry devices? In my opinion, not that advanced. With respect to mobile applications, Apple’s real achievement is the ease in which applications are loaded onto iPhones via Apple’s iTunes application store, and that those applications work every time.

Apple took the Handango and Handmark business model mainstream. With Apple’s television ads for iPhone applications running several times an hour in primetime, consumers finally understand that a mobile phone does not have to be just a phone. There isn’t exactly pent-up demand for mobile applications; it’s still new territory for most consumers. But make no mistake, there is demand, and it is growing virally.

In reality, the true game changer in the mobile landscape cannot be traced to any one company or any one technology. Instead, it should be attributed to the confluence of evolving technologies intersecting at this point in time across the mobility landscape. 

Mobile data networks are nearly ubiquitous across the globe, and soon higher speed 3G and 4G mobile broadband networks will be available in major markets everywhere. Around the world, network access has become commoditized, forcing data usage prices to fall.

Simultaneously, processing power in mobile handsets has increased dramatically. Phones now run more complex mobile applications and run them faster. Complementing powerful and faster mobile processors are larger storage capabilities brought about by the low cost of memory. The cheapest mobile phones – those phones offered for free with wireless service contracts – have better storage, processing and display features than personal computers had not many years ago.

These technologies are produced in large volume to address a market that has already exceeded 4 billion people; that’s over 3 billion people more than the personal computer market. As handset prices fall, these more capable phones become available to the consumer marketplace in mass quantities. Without this appeal, there is no mobile application buzz.

To me, what’s most exciting is not the mobile applications themselves, but rather that handset manufacturers and wireless service providers are embracing the changes I just described above.  From one handset manufacturer’s booth to the next, the evolution toward application-friendly form factors was on display at CTIA. The marketplace has awakened to the notion that if a phone makes it easier for people to use applications, people will buy and install applications on their phones.

The emerging trend in mobile application distribution puts the handset manufacturer in the middle between the application developer and the subscriber. Apple’s iTunes app store easily addresses the unique requirements of the iPhone – one device with one operating system.

Is this bandwagon approach to manufacturer-labeled app stores the right approach?  Unlike the iPhone, all the other phones will be able to run applications sold at other app stores; Apple cornered its own market and only iTunes has iPhone applications. I suppose an app store has to do more with brand loyalty than convenience. Once consumers become savvy, however, they will go wherever they want for applications. Think of it this way: When you want to watch TV, do you care more about the program you want to watch or the manufacturer of your television set?

If handset manufacturers are really committed to mobile applications, they should work on solving the fragmentation that plagues the mobile industry. Unlike the iPhone, which has only one current model in the market and every application developed for it works on every iPhone, the rest of the market has to deal with a wide range of differences, from operating systems to input mechanisms to screen orientation. An application that works on one phone by one manufacturer on one OS may not necessarily run on another phone, even made by the same manufacturer using the same OS. It’s therefore relatively easy to develop applications for the iPhone, yet very challenging for all other phone platforms.

Technology is at last ready to equip the masses with a powerful new computing platform – the mobile phone – to complement the PC computing platform we have in our offices and homes.   The real take-away for me from CTIA is that 2009 will mark the year the wireless industry became application-ready.

Montesi is CEO of Flycell, a subsidiary of Acotel that was founded in 2004.

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