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Wasted budget on apps… my $50,000 white elephant


Wasted budget on apps… my $50,000 white elephant


This article first appeared in the June 2011 issue of Marketing magazine.

How quickly things move in the mobile world. As a 20-year veteran of the IT industry, I was often astonished at the pace of the web. It was bewildering to see the growth and uptake of web-based start-ups, while other seemingly useful companies simply crashed and burned. Incredibly, however, the mobile market is making the web pace seem like a slow walk in the park. Unfortunately, the pace and change has caught many people out and led to an expensive lesson when it comes to apps development.

All within the space of just a few years, you have the massive domination of the iPhone and then the onslaught of Android taking over the sales leader board. Then came the Windows Phone deal with Nokia, which hasn’t impacted as yet, but stay tuned. It’s a lightening pace of change, but luckily most can just sit back and be passively entertained observers.

As a side note, Apple has tried before to create a closed proprietary private ecosystem (desktop computers), which many considered back in the 90s would succeed and dominate. I believe, however, its failure now looms as an interesting unlearned lesson, as Apple has tried again with the iPhone/Pad/Pod and iTunes/iStore private, closed ecosystem. For a while, it looked like it had things stitched up, until Android came along and spoilt the party. So will it be nil for two for Apple?

In the last three months, I have met a number of organisations that embarked upon an iPhone apps path and are now facing a budget catastrophe, especially those who haven’t been able to stem the flow of cash to a less than strategic project. It was naively believed that the iPhone dominated the ‘connected’ consumer and that it was only getting stronger. ‘We must have an iPhone app’, touted many a marketing director. But, with recent figures showing that the Android now has a greater installed base and is outselling at a high rate, the question begs asking: what to do with the wasted investment in an iPhone app?

Before I get attacked, there is still definitely a market for iPhone applications. Especially entertainment, utilities and productivity tools, where you have the ability to create an engaging game or brand infested experience that also translates to the iPad. The iPhone and iPad can deliver some amazing experiences, but, remember, you are in reality targeting around 25 percent of the ‘connected’ marketplace. But to build an app as an extension to your website to get closer to your audience is a poor decision – a decision that six months ago most wouldn’t have even been questioned. But now you have a $20,000, $30,000 or even $60,000 white elephant that needs to be maintained, while also looking at how you can address the Android, Windows and BlackBerry markets.

When I refer to a ‘connected’ consumer or the ‘connected’ market, it’s more a reference to the segment of the public that have the inclination, desire, will or ability to go online. It’s not only smartphone users, but any mobile user that is comfortable and willing to go online with their mobile. At the end of the day, it’s a segment of these users that you are trying to attract and hence the stats and intel must have relevance. The 30 percent of the market still with a clam shell style phone and a postage stamp sized mono screen isn’t likely to try and surf the web in any meaningful way.

By the time this comes to print, I’ll probably be blogging how wrong I was and how the market has changed again and noting the fact that some European company has acquired Symbian and turned it into an Android killer able to emulate iPhone apps, while at the same time Apple is acquiring Microsoft in a bid to join forces against the new evil in Google. That’s all just pure speculation, of course! But don’t blink, things will change that fast.

When investing $50,000 in developing an iPhone app, don’t you think it prudent to step back and consider a broader approach that can address more than just 25 percent of the audience and is able to be maintained relatively easily across three or four platforms? That’s pretty much what the analysts are now touting: ‘apps for games, productivity tools and utilities with web apps for business’ (web apps being the phrase used to refer to mobile specific websites that run and feel like apps). Interestingly, it’s the same analysts that five months ago were saying ‘everyone needs to have an iPhone app – don’t be left out’. Thanks guys!

But web apps have just as much challenge in reality. While the costs of ownership and development are significantly lower, creating a cross-device, cross-browser experience needs proper platforms and tools to help deliver, especially with some supporting JavaScript, others with HTML 5, some with GPS and, of course, no one friendly with Flash. Email me if you want some guidance that’s beyond the scope of this article.

So, let’s look at the device market and see who’s doing what. And, remember, if you are trying to embark on a mobile experience either on a device app or a web app, by all means use this data, but appreciate that it’s changing tomorrow. Understand your consumer and where they fit. For example, a technical audience may in fact have a far greater Android penetration than an audience from the advertising industry, where the Mac rules and the iPhone dominates almost without exception. If you’re targeting university students, then the great deals on Android for the budget conscious student have seen Android take an estimated 50 percent market share amongst students.

Leading the handset operating system (OS) race is now Google/Android with 33 percent (remember this is of the connected consumer, not overall). It’s the ‘OS’ race because Android now runs on many brands of devices. Next in line is the Blackberry at 28 percent. Surprisingly, that hasn’t varied much in the last six months. This tends to indicate that the corporate BlackBerry market is still strong. At 25 percent, Apple has in fact reduced or stayed the same, depending upon whose stats you read and, finally, there’s Microsoft at 7.7 percent and Palm at sub three percent.

Clearly the market is set to change even more drastically in the coming year. Devices are becoming more powerful and embedded hardware like NFC (near field communication) and GPS (global positioning system) will see new brands emerge and old designs fade away. Remember when everyone had to have a flip phone (clam shell style)? That’s now considered archaic and ridiculous. Remember when non Nokia owners watched in envy as people played Snake on their phone? It’s actually not that long ago. Embedded projectors, scanners, barcode readers and infrared projected virtual keyboards will all have their moment in the sun and then be buried by the next big innovation.

Microsoft is rumoured to be working to integrate NFC into its Windows Phone 7 operating system. Along with Google, Apple and Nokia, Microsoft may be the next to test the technology. Microsoft holds over 14 patents surrounding NFC. With commerce and contactless payments predicted as a major ‘game changer’ in the coming years, surely Microsoft’s domination and control should or could see the NokiaSoft smartphone alliance launch rapidly to number one. Nokia has already committed the company to the NFC technology protocol and promised to make NFC a standard feature on all its Symbian smartphones this year.

So, planning an SMS campaign? That’s cool; nothing here affects that. Looking at stepping up to MMS and really getting into the multimedia experience? Then again, that’s all fine. With the exception of some non-standard behaviour on the iPhone, MMS is pretty much ubiquitous now. But if you’re planning an app, web app or some other device-based experience, then your job is going to be a tough one. Between starting and ending your planning, everything could have changed. The key insight here is to understand your target and where they fit in respect of likely handsets. If indeterminate, then stay reasonably generic and friendly across all makes, models and platforms. The last thing you want is another $50,000 iPhone app ‘white elephant’ and have to explain how you’ve run out of budget to address the other 75 percent of your customers or prospects.

Joe Barber

Joe Barber is a 25 year veteran of technology companies with the last five years focussed on mobile and retail. He is currently CEO and founder of Edge80.com with other notable start-ups under his belt being Third Screen Media, Sniip and Planet Internet. Joe has lived and worked in the US, Malaysia and parts of Europe and talks at numerous trade events worldwide.

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