December 17, 2008

Some thoughts on Mobile Applications

There is no doubt in my mind mobile application is the key to future of smartphones. I always knew the limitation of a phone’s screensize posed inherent challenges to prevent same user experience compared to desktop web applications. We must capitalize on a phone’s native feature set (input, output, keyboard, touchscreen, UI, OS) to provide a robust mobile experience which is only possible via mobile apps.

A quick history: Mobile apps have come a long way. Gone are those days when we have to pay or download an app to our desktop and use a sync software to install the application to your handheld. Today, most applications can be downloaded and installed over air directly from handset if you provide a download link within its browser. This is true across all platforms (Symbian S60, iPhone OS X, Windows Mobile and yes, even Palm OS). With Apple’s iTunes leading the way and Google’s G1 Marketplace to follow, the market for mobile applications is aggregating and serious money is being thrown at this new marketplace.

A few random thoughts come to mind when thinking about monetizing mobile applications:

1. To monetize anything in the mobile space has proven to be difficult, there hasn’t been any substantial growth in the mobile ads space which has been pushing for quite some time, seeing iTunes rock out with their high volume is very exciting. However the iTunes eco-system has now been tainted with loads of free or cheap applications fighting for first page ranking, making it very difficult for those interested in selling for a at a premium for a higher margin

2. Iconfactory’s Principal Craig Hockenberry’s “letter to Steve” (an amazing piece and analysis of iTunes store) brought out lots of interesting points, however, I can’t help but wonder if mobile applications should cost money at all? I, generally, prefer to download free open source applications for my desktop, so why should this mentality change in the mobile space? In my opinion regarding to Mr. Hockenberry’s concern about iTunes store becoming more cluttered and higher priced apps don’t get the light of day, perhaps mobile apps companies should build in a marketing fund outside of iTunes to help market their higher priced mobile applications. Same practice as desktop software or video games for that matter. Seems like Apple listened, a little bit.

3. As far how to monetize and be rewarded if mobile applications were free, the Cydia installer within jailbroken iPhones seems to be working out quite well where it is being subsidized by ad supported revenue (see screenshot). Granted, I don’t know if the actual developers see any of that ad dollar in this scenario, I certainly have paid attention to a few ads myself while downloading awesome, function-enhancing applications free of cost to me. Perhaps there is something here.

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