Growing pains in the mobile app industry - Mobile World Live

Growing pains in the mobile app industry

02 SEP 2010

The mobile application industry is at a difficult stage in its development. For many years, it managed to rumble along quietly under the surface, without attracting too much attention from outside of the industry. Unfortunately, this also meant that it did not attract much attention from consumers, either, although a few companies managed to secure themselves a strong grip on a lucrative niche before apps went mainstream.

But, without a doubt, it is a mainstream business now, and for all the benefits this can bring, it also leads to added complexity. While the development of a commercial mobile app was previously the preserve of a small, dedicated team often working under the radar of corporate managers, this has now been transformed so that projects face increased scrutiny throughout the lifecycle. This can cause a number of problems, not least that design by committee can lead to the potential for creativity to be stifled, with projects hamstrung by excessive bureaucracy from the outset.

There are likely to be further challenges ahead. A recent survey commissioned by law firm Freshfields Bruckhas Deringer indicates that operators see mobile apps as a way to differentiate themselves, and as a way to counter falling voice revenue. If apps are to play such an integral role in the activities of operators, the way in which development is conducted will also change due to the increased commercial focus.

The way things could be heading was highlighted by the recent launch of Microsoft’s Bing search application for Android. For all of the talk of the “openness” of Android, availability of this app is initially limited to customers of Verizon Wireless, as the result of an existing agreement between the two companies. Potential customers who visited the Bing community website did not hold back their criticism: why limit an application for a widely deployed platform to customers of one operator?

Undoubtedly, this is not the last time a similar issue will arise. In much the same way that operators have used handset exclusivity deals as a way to attract and retain customers, their application portfolios will be used in the same way in future. And for developers struggling to make ends meet in a competitive market, the patronage provided by an operator in return for exclusivity is likely to prove extremely tempting.

For all of the criticism of taking a “closed” approach to mobile application availability, there can be benefits for consumers. Looking at Apple’s App Store, for example, despite its opaque approval practices, customers can be sure that the applications available meet the necessary technical and security standards, and will be within the (admittedly Apple-defined) boundaries of decency. This means that purchases can be made from the App Store worry-free, as part of a seamless process which has certainly lead to increased app take-up. 

By using purchase history data and customer preferences, it is also possible to create accurate profiles and recommend apps, enabling customers to discover new products – one of the big criticisms of large catalogues has been that it is all-too-easy for titles to get lost, especially if they do not make a splash on their debut.  This profiling benefits both consumers and developers, by linking buyers with the products that are most likely to suit their tastes.

But there does remain one very real potential casualty: customer choice. If applications are only made available through a limited number of stores, or only for subscribers of a certain operator, or with a certain brand of handset, then this has to be bad for individuals. Thanks to the growth of social networking, it is now easy to recommend applications to friends; if availability is constrained by something as arbitrary as operator choice, the potential for dissatisfaction is huge. 

For any application with a community element, a broad distribution is essential – nobody chooses who they want to communicate with based on their mobile network operator or handset vendor. And for developers, access to the widest possible consumer base is desirable, in order to maximise the potential to make money.

As with handset exclusivity, access to an appealing application portfolio will soon become a major selling point, and can indeed be a useful commercial tool. But this must be balanced with a consideration of the needs of customers in general, in order to avoid negative publicity, and to give applications the chance to achieve their full potential success.

 

Steve Costello

 
The editorial views expressed in this article are solely those of the author(s) and will not necessarily reflect the views of the GSMA, its Members or Associate Members

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