It is extremely exciting to be in the middle of what is arguably the fastest growing segment of the largest growing market in the world right now — the mobile application ecosystem. While this segment has many components and even more underlying noise and confusion, it is possible to see some patterns emerging.
Following are the top 10 trends and the top 10 opportunities that I see evolving over the coming quarters and years ahead.
Top 10 Trends
1. Metered Data Usage. Much like other countries, the United States will soon enter a brave new world. “All you can eat” data usage will soon be replaced with metered data usage, and user behavior will be materially impacted as a result. Expect to see immense battles between carriers, content owners, service providers and consumers with regard to who will pay for the right to consume data on an anytime, anywhere basis.
2. Android Fragmentation. While Google’s underlying mobile operating system is open source, free and significantly penetrating the global market for smartphones and tablets, many of the equipment vendors, carriers and service providers using it are adding their own special sauce to the underlying code base as a means of differentiation. These proprietary tweaks have already resulted in more than 15 screen sizes and resolutions and five memory specs — and we have yet to scratch the surface of what’s likely to come next.
3. App Store Proliferation. It appears that just about every major brand now wants to have its own app store. Whether for IPTVs, mobile devices, desktops, browsers, carrier networks or otherwise, there appears to be no end in sight for the expansion of consumer choice.
4. Enterprise Application Explosion. While the consumer app stores received all of the early attention, we are now seeing the early stages of the imminent explosion of the business process revolution on mobile. Enterprise applications will easily catch the size and scope of their consumer brethren and the aggregate consumer and enterprise market is forecast to grow to as much as US$100B by 2015.
5. The Race for a Viable No. 3. While Apple and Google have taken the early lead of both mind share and market share, it now appears that we are going to see a battle between Samsung and Microsoft for who is potentially coming next. HP and RIM may ultimately get webOS or QNX back in the mix, but it appears that a Missouri-like “show me” attitude may soon be adopted for all mobile platforms. Businesses and consumers appear to be taking a wait-and-see approach as the market unfolds before embracing new and evolving platforms with additional investment.
6. Great Expectations. Let’s face it — once you saw your first HD broadcast on TV, you simply had no desire to see a non-HD analog or digital TV signal. Similarly, once you experience great applications like “Angry Birds” or “MythBusters,” which were designed up front to take full advantage of all the memory, resolution and processing power available, absolutely *nobody* will tolerate going backward again.
7. The Demise of Applications as Features (or Kids Rule the World). Anytime, anywhere experiences shall rule the Earth — and you better make sure that mobile interfaces dictate your Web experiences rather than the other way around. Kids are now swiping and pinch zooming laptop screens, desktop screens and TVs — and then asking their parents why the devices won’t work. Everyone will expect all devices to behave just like their mobile devices.
8. The Epiphany of “You Get What You Pay For.” The Age of Brand Embarrassment is now ending. In the early days of mobile development, two guys and a dog were viable partners for corporate America. Now, after the failures of checking the box on mobile have surfaced, brands are retrenching their mobile efforts and getting serious about their anytime, anywhere audiences. Unfortunately, the survival of their brands depend on it.
9. The Other IOS. We are all familiar with Apple’s iOS operating system for iPhones and iPads. However, Cisco’s IOS, or Internet Operating System, is becoming paramount to both the network and the cloud. Knowing the edge, the client and the app is still critical — but ignoring the core, the cloud and the infrastructure will prove fatal. And this IOS is the really hard stuff — caching, streaming, switching, routing, failover, hyper-scalability, etc.
10. Mobile Internet Access Exceeding Wired Internet Access. The corollary of item No. 1 is the reality that something’s got to give. Mobile Internet access now exceeds traditional Internet access, and this behavior will materially impact application usage characteristics and consumption behavior by consumers everywhere. However, because corporate America will follow the eyeballs as a top priority, the percentage allocation of the traditional marketing and advertising spend will shift — and shift dramatically.
Top 10 Opportunities
1. Application Discovery. An application launch does not equate to “done.” It’s bad enough to separate the noise of applications to find anything of use, but it’s even worse when brands forget that their applications are products that require regular, ongoing care and support. The tools, services and techniques that get your applications found will separate the winners from the losers.
2. Near Field Communications (NFC). Mobile commerce and social/mobile/local enablement is clearly the direction of the future. Engagement, interaction and monetization will be core, and applications and experiences that leverage NFC most effectively will share in the spoils. Impulse actions shall be the new norm for all — and it will equal money.
3. Consolidation. Anyone who witnessed the migration from circuit switching to packet switching just over a decade ago should realize that mobile will be extremely analogous to the underlying evolution of the Voice over IP (VoIP) market. While many will lose in the ultimate and inevitable shakeout that awaits, lots of large players will ultimately win. The wind is simply too strong at the back of the entire industry and ecosystem. Fallout and consolidation will breed the biggest and strongest survivors, and these survivors will catapult to become some of the largest companies in the world. Will you be a buyer or a seller, Mr. Darwin?
4. International Ad Networks (Or the Lack Thereof). While the domestic ad network market is beginning to blossom, it is far from mature; the underlying fill rates are challenging at best and absent at worse. In parallel, the quality of many ads is shameful and user expectations for banners, interstitials and video pre-rolls have risen with the quality of the underlying applications themselves. Much like Baidu is to Google and Mercadolibre is to eBay outside the United States, there is a massive opportunity to create robust, rich and comprehensive ad networks in virtually every region worldwide.
5. Mobile Applications as Competitive Weapons. Arm the consumer, arm the channel and arm the employee base — or else. Engaging the anytime, anywhere audience will be a requirement for every business. Those providing their Internet, extranet and intranet audiences with value, utility and engagement will easily damage their competitors and more consistently differentiate their offerings.
6. Business Intelligence/Analytics. Currently there is a distinct lack of a single integrated view into a mobile channel. As a result, those able to create a single login for content management, advertising, commerce, application usage data, app store download data and everything in between will solve the most complicated of problems. It’s possible that you will continue to enjoy 20, 30 or even 40 separate systems or logins, but this one is a no-brainer for all parties that want to solve a real headache.
7. Global Real-Time Focus Groups. Forget knowing how many downloads you have. Who are the people actually using your applications, and how do they use them as part of their daily lives? Solutions providing visibility into the likes and dislikes of anytime, anywhere audiences in real-time will translate to dynamic promotion, marketing, advertising and sales modifications that will optimize yields, accelerate conversions and enhance monetization.
8. Non iTunes Affiliate Systems. Outside of the iTunes App Store and LinkShare, where are all the affiliate programs to ensure that consumers and businesses can find the applications and experiences they’re looking for? It’s time for the business side of app stores to collectively grow up and realize that the Internet masses are not going to feed the non-iTunes app stores for free (WANTED: Pay-2-Play). Most of these storefronts unfortunately remain horrifically challenging to run real application businesses with P&Ls, tax provisions and settlements, not to mention that the user experiences are generally lacking in comparison.
9. Agency and Strategic Consulting Displacement. It’s not good enough to talk smartly about mobile when enterprises need partners that can talk authoritatively from real world experience. Product Managers and Brand Managers can take a page out of the Dell playbook and simply “go direct.” Historically, corporate America leaned in one direction to get the strategic insight of McKinsey, Booz Allen, Deloitte and others — or leaned in another direction to get the agency-of-record insight of Omnicom, WPP, Publicis and others. Those sitting in the middle as “mobile sherpas” can easily have flourishing careers in guiding the strategic and tactical direction of digital media and mobile distribution.
10. Reverse Outsourcing/Offshoring. In what can only be described as a reversal of fortunes, many emerging markets are now coming to the United States for delivery support on mobile application development. With a cheaper dollar and a mobile ecosystem 18-24 months ahead of what will ultimately emerge elsewhere, foreign firms are coming to America to find the skill sets needed to get ahead in their core home markets.
Virtually every one of these items could be the subject of its own article, but these highlights are meant to jump-start your thinking about where we’re at now, as well as expectations of where we’ll soon be going. Enjoy and good luck!