Mobile Commerce

While the developed world is rapidly moving over to smartphones, the preponderance of the wireless users are still using basic devices. Sebastian Anthony, in this post, asks how so many people – 4.8 billion, by his count – could be ignored when it comes to providing them with exciting applications.

I don’t know Sebastian, but it seems he’s asking the same questions many new or unfamiliar with the wireless business ask when they encounter this field. This has grown even more true of commentators – professional and amateur – who know only the success of the iPhone and wonder why that success can’t be applied to other devices.

There are, in my view, two reasons why the explosion of applications – available at a full range of prices – happened only on the iPhone (and, more recently and to a lesser extent, on Google’s Android platform): the wealth of the underlying market and the inherent compatibility of all other devices.

Sebastian, here’s something that’s hard to swallow: there might be 4.8 billion mobile phones in the world, but only a few hundred million of those devices are owned by people who have the disposable income to purchase (what amount to) frivolous applications. By frivolous I mean applications that are not life-saving, do not substantially reduce personal or business costs, and do not result in significantly lower expenditure of natural resources. Modern applications for the iPhone and Android are, largely, for convenience. And the members of world society who are willing and able to pay for convenience have, relative to the owners of those other 4.8 billion devices, wealth. Their wealth makes it profitable to develop applications.

The bigger problem, though, is device incompatibility. The marketplace for feature phones (which, in fact, have very few features) is vastly different from the marketplace for smartphones. Feature phones dominate the world market in terms of volume – those 4.8 billion devices are mostly feature phones – but are themselves dominated by the demands of the world’s mobile carriers. Let me tell you about how that market works.

Feature phones run one of many real time operating systems (RTOSs) all closely guarded by, and usually proprietary to, the device manufacturers. Until Nokia’s Series 30 and Series 40, numerous variants of each RTOS where created as new “features” were developed. I’m talking about “features” like one-tap-to-voice-mail, or special-ringtone-for-mom. Nokia tried to standardize that a bit, given the breadth and depth of its worldwide coverage but, largely, the operators rebelled. They wanted each phone to be slightly different from its logical twin on another network in order to differentiate in the marketplace. Further, each feature phone is tediously vetted by each mobile carrier (at great expense to the application developer) and carefully packaged with “features” that lock the customer into other carrier services (voicemail, ringtones, payment, etc). Sony Ericsson’s C902, for example, might have different features in the UK market on the O2 network than it does on the Telefonica network in Spain.

The software industry behind the very popular Java programming language tried to change that. Put one language runtime on all proprietary RTOSes and developers will be able to write one application that will run on top of all of them without change, they said. But the software industry did not anticipate how deeply ingrained the differentiation model was to the carriers’ way of doing business. Each carrier mandated different release levels of the Java runtime, and different suites of Java’s “optional packages”. Developers were back to square one – building for over 100 variants of Java in any typical release cycle. It was simply unprofitable to continue, and firms that tried to make it easier also shut down. Java’s promise of write once, run anywhere became a myth in mobile, recognized as early as 2002 – years before iPhone. But until iPhone, feature phones – even with very little true software innovation – remained the core of the business for both device manufacturers and wireless carriers. And it’s still the success model the carrier’s know best.

In late 2006, Apple, with its huge modern reputation staked on the iPod and iTunes Music Store, leveraged its strength to completely reverse this model. Instead of cow-towing to carrier demands and building tens of incompatible devices, Apple went to market with a single carrier and a single device. Luckily, it happened to be a compelling device – the likes of which the industry had never seen. Customers doubled their expenditure for mobility overnight and every carrier on the planet wanted to take part, no matter Apple’s demands. And when, later, Apple developed a software model that was controlled by Apple rather than by the wireless carrier’s – a model where any developer could create an application for the phone without needing to have it vetted by the carrier – developers jumped at the chance. Even more important, over time Apple has maintained a high degree of software compatibility across its devices. An application that runs on an early iPhone still runs on the newest iPhone – whether it’s running in the US on AT&T or in Luxembourg on Tango. Simply put, this model makes software profitable. Google has successfully used this same strategy for it’s Android platform which has the advantage of leveraging the big device vendors and their creativity and experience in building hardware. But Android devices are expensive smartphones, too.

There is some hope. In modern times we have GetJar, a big-tent app store which is now vending applications at a rate of 80 million units a month to a vast gallery of mobile devices. The jar in the name comes from Java’s software packaging model – witness to the fact that Java is barely hanging on as the only cross-device compatibility model. GetJar’s modest success shows that developers are keen on the low-cost, high-volume model. And it also shows that consumers are willing to trust a previously-unknown entity (GetJar) much more than they are willing to trust their wireless carrier when it comes to buying applications. Let’s hope so – at 80 million/month it’ll take only 600 months for GetJar to reach every phone in the world!

This portends something big: MasterCard is opening its payment platform to developers. PayPal, who’ve been open to developers since November 2009, had to respond. Visa will be forced to follow suit. Perhaps Apple’s recent payment patent got everyone moving?

Competition in this area is a good thing and, hopefully, will make accepting payments easier, especially for small values (less than one US dollar). That could unleash a wave of innovative services that do not need to be funded by advertising. Right now, payment for small items or services when mobile is next-to-impossible. And paying for information in small bites is certainly not possible. Happy to pay for one article out of a magazine, but don’t want to buy the whole thing? Sorry. Want to read just the bullet points from the WSJ’s famous summary section without buying the entire paper? Can’t. There’s a treasure-trove of information and services waiting to be unleashed, but for the lack of a trustworthy, convenient payment mechanism.

Perhaps we’re about the see that change.

Well, I didn’t do badly on this morning’s guess about Apple’s tablet announcement.

It’s focus on media – and not on computing, per se – is as I expected. And Apple leveraged the power of its iTunes store to offer what it’s calling iBooks. And, it’s distributing those books in ePub format, which makes not-for-profit and small-scale publishing possible in the same way Apple legitimized both podcasts and free apps.

I was a little saddened by the place of prominence Apple gave the game developers. I know this puts me squarely in the minority, but I am so tired of drive-fast or first-person-killer games. It should be obvious this type of device would do that – there are plenty of tablets out there that run games. But iPad does nothing to revolutionize games.

As I suggested, however, it does revolutionize book, magazine and newspaper publishing. Or, rather, it should. The New York Times, so often the object of my ire for it’s slanted, yellow and sometimes false news reporting, unveiled a gorgeous, next generation version of their iPhone application which made tremendous use of the iPad’s multi-media capabilities. We can only hope this is the harbinger of things to come from the journalism and publishing communities, or else this device will be the death of both of those industries.

Secondarily, the iPad looks like a great presentation device – with fantastic navigation aids built into the unveiled iWork applications (which, themselves, are available cheaply on the iPad). And, it’s almost a computer with the addition of a keyboard. At its price point, this is one compelling offering for all sorts of fun and semi-serious uses.

The iPad has a network connection, of course – WiFi for the sensible ones among us, wide-area 3G for those with deep pockets. The innovation here: the pricey $30/month unlimited access fee carries no contract – you can cancel any time. Now there’s an innovation Google missed when it unveiled Nexus One (I blogged about that mini-disaster, too). Perhaps more importantly – and to the distaste of many bloggers, pundits and iPhone users – Apple’s partner for 3G network coverage is … AT&T. Yep, this announcement further solidifies their partnership and, I think, puts another arrow in any notion that iPhones will be coming to the other US carriers.

Overall, yet another sterling example of Apple innovation (hardware and software), marketing savvy (the rumor build-up) and corporate direction (leveraging all their strengths to the maximum). The iPad is going to be another run-away success. Google: PAY ATTENTION!

I believe Apple has let the rumor mill do its build-up marketing again and, indeed, we’ll see a new tablet-type device as part of today’s announcements from Moscone.

The world, and therefore Apple, has seen many tablets come, and many tablets go. No company has cracked the code with this form factor – except the ruggedized workplace tablets, with their tiny market niche. So, unlike the MP3 player market, which Apple revolutionized with the iPod in 2000, the tablet market is littered with failure. Why would Apple want to address such a market?

I believe Apple has seen a confluence of streams it can leverage via its hardware (and software) design expertise and its wildly-successful, fun-to-use store. Therefore, unlike Google’s tepid, half-hearted stab at changing the wireless telecom market with Nexus One, Apple is going to use its new tablet to revolutionize the book – and, possibly, magazine – marketplace. This will not be a tablet computer, as the IT-related magazines have been speculating. This will not be a bigger iPod as the music-focused blogs have been speculating. Nope. This is going to be the new way we read novels, short stories, and possibly high-value articles. Notice I did not say “the new way we read books“. Books are the old model. Books are the distribution mechanism for novels (etc.) – and, thank you, but the Internet is the new distribution mechanism. Amazon showed this niche is profitable (due as much to its store as to its Kindle hardware), and this is the positive sign Apple might have needed to see.

How will Apple go Kindle one better? I think the answer lies in the content we now know as magazines.

The best magazines are a great old-school blend of genuinely-excellent authorship and timely news that’s sadly lost it’s market almost as fast as radio and newspapers. That’s because magazines are simply aggregators of content, supported by ads. Has that model been replaced by the Internet? Yes. But, just as there has been no profitable model for daily news on the Internet – because newspapers are no longer the only daily aggregators of news and therefore can not sustain the high ads rates necessary for their costly (and environmentally-unfriendly) distribution technique – there has been no profitable model for magazines.

I think Apple, with its forthcoming tablet, is going to make it easy to create and distribute hi-gloss multi-media magazine-type content in a form-factor and user experience that’s exciting to use and compelling to view. Via DRM techniques that the media and freedom advocates will abhor, Apple will support a paid subscription model that will make delivery (distribution) of this content painless for users. And, having done so for magazines, this new approach will start to affect books of all types – such that short-cycle publications (like magazines) and long-cycle publications (like books) will start to merge into a seamless category. All available via single-purchase or subscription via the iTunes store.

Actually, let me re-define easy to create (from above): In fact, I think the process is going to be somewhere between HTML publishing and book-generation. It’s not going to be easy in the classic sense, and more like the application development cycle. Therefore, in my view, daily news is going to be left out of this revolution because its content requires too-rapid a cycle to participate. Only publications of durable value – those that are not in the immediacy category – are ripe for this approach. Think The Atlantic Monthly.

In sum, then, just as the iPod was not as much about music-playing as it was about music-distribution, the Apple Tablet (while certainly an awesome piece of product design) will be mostly about a new printed-word content distribution system in the iTunes store.

Live in Westchester and need to fill up that shiny new iPhone with useful apps?  Here are some  tools to help you cope with Westerchester life, and enjoy your down-time.  Many of these apps use your iPhone’s GPS location capability to make operation a snap (though most are also compatible with the iPod Touch, as well).  A few cost money, though lots are free!

Note: the links provided will open directly to each application’s page on the Apple iTunes AppStore

Let’s get started…

#10 Free Wi-Fi Finder

Gotta have a laptop hookup and now?!  And you find yourself in … Pound Ridge?!  Find free wi-fi hotspots all over the world using your iPhone.  Super handy when you’re not in your home area or in far-flung WestCo locales (not for iPod Touch).

#9 Offender Locator

Definitely not for everybody, but if you’ve got little kids you might consider this app.  Use it to see if registered sex offenders are living anywhere near any address you might visit or reside.  Even useful if you’ll be trick-or-treating in an unfamiliar neighborhood this year.

#8 City Transit (NYC Subways)

Exactly what you’d expect and exactly what you need, no matter if you’re a daily commuter or only an occasional visitor.  You want this foundation app in your pocket! Too bad Metro North doesn’t have something similar.

#7 Weatherbug

Whether you’re a weather “bug” or whether you’re a weatherphobe, this is the only weather app you need.  The elite version has true weatherbug features and costs only $.99!

#6 Lose it!

Look, sometimes we all need a little support in attaining our goals.  If you need to reduce, this easy and handle app helps you keep track of what you’re eating and how that fits with your weight loss needs.  The app’s home screen serves as a great little affirmation (or overlord!), too!

#5 New York Times

America’s newspaper of record and our own “local paper” (aren’t we lucky?) also has the best news-related iPhone app.  No, it’s not a mini web site – it’s the right sort of mobile filter, giving you what you need in an easy to scan format.  Easily the best way to get your daily Liberal Media Bias on the go!

#4 Hop Stop

Yeah, we all think we know the NYC subway lines.  But we all need a little help, still, getting from here to there when changing lines or (God forbid!) transfering to the bus. Hop Stop’s got you covered, and it’s totally discrete.

#3 McSweeney’s

Timothy McSweeney rocks! If you love the website you’ll love this app. A fantastic mix of humor, wit and excellent writing curated from the best of America’s literary community.  Expensive, but worth it for lit freaks!

#2 Bloom

Finally, an app for adult music lovers! Brian Eno’s incredible ‘generative music’ app for the iPhone.  Visually and spiritually soothing, and fun – how can you top that? At $3.99, an expensive app – but this much fun typically costs much more.

#1 Open Table

My personal all-time favorite iPhone app.  Always know where you can get a table, whether it’s your favorite haunt or a cozy little place around an unfamiliar corner. Perfect when your date is unexpectedly finicky, too.

And the one that got away…

Westchester-based PepsiCo had to apologize and de-list it’s “B4 U Score” pick-up app, designed as viral marketing for Pepsi’s AMP energy drink.  Women took offense at the stereotyping, cheesy pick-up lines and conquest logging feature. Ya think? Bummer, though – it was a great example of iPhone app design (from a purely academic perspective).

And, for the upcoming holiday…

Halloween Party-in-a-Box

Have no time to buy a bunch of goof tracks on iTunes?  Here’s the one-stop shop for all your Halloween fright sounds.  Mix your own, make it random, but any way you flip it you’ll have the local kids too scared to come to your door!

Enjoy!!!

David Oliver (@davidmoliver) writes mobile software, enjoys skiing and a good glass of wine, and sometimes snaps pictures here in Westchester County.

AndroidGuys is reporting that Google’s Android Market will start managing “paid applications” in 1Q 2009.

We’ve talked about the proliferation of application markets and certainly we admire our Capitalist market sytem and therefore applaud new entrants who seek to add value. But often that diversity is at odds with simplicity and perhaps more importantly with ease-of-understanding in the marketplace. Google’s Android Market moves beyond the carrier-based model by centralizing a space where users can find useful tools independent of their phone make/model and carrier. The additive power here is, indeed, the power. The brand – Android – is memorable, catchy, and therefore easy to find (on, where else?, Google!). Google can make this a win for customers.

But, Google needed to provide the financial incentive to counter the gold rush toward the Apple iTunes App Store. It will be interesting to see how the “paid app” marketplace links to other Google offerings (Google Checkout, e.g.?) to build a cross-fertilization with Google’s expansive empire (perhaps, by the way, the only such empire that can compete with Apple’s iTunes music and video near-monopoly).

PS: to developers out there: check out PhoneGap. You can build a mobile application using Web 2.0/AJAX technologies, wrapped by PhoneGap into a native application for iPhone and Android (and RIM Blackberry!), and get placement in both the iTunes store and the Android Market. Here’s a great post over at OpenIdeals that shows you how easy this process can be.

What with the modern day Gold Rush happening at Apple’s iTunes App Store, it’s spawning imitators.

Or, ‘enhancers’…

First you have apptism, hoping it provides a better way to search for and find iPhone applications. apptism provides all kinds of search and rating criteria to help you in your sojourn. Similarly, we have iphonexe. Both link potential buyers directly to the iTunes App Store (hear that sound coming from One Infinite Loop? It’s ‘Woot!”!).

Next we find device-specific (or ‘brand-specific’ or ‘platform-specific’) alternative marketplaces.

The most well-known of these is Google’s Android Market with content specific to devices running Google’s Android operating system (at the time of this writing, only the TMobile G1). However, Google has made known that it will give a slice of marketplace revenue to its carrier-partners. Some see this as even more egregious than Apple taking a cut of App Store revenues, so several non-splitting shops have set up storefronts – specifically, SlideME and AndAppStore. SlideME, in specific, looks to address what it seems to feel are inequities in the application revenue model.

Let’s not count Research In Motion out here. Makers of the once-top-of-the-heap Blackberry are going to create a Blackberry-specific store called, appropriately enough, BerryStore.

Where’s Howard Stern when you need him? His “Dead or Alive?” segment might be useful for this news: Palm is working with PocketGear on the IBMishly-named Palm Software Store.

Update 01.09.09: Palm just announced the new Pre phone, featuring an all-new (for Palm) development model.  And, with it, a re-named application store called the App Catalog.

And, in another late-to-the-party effort, Microsoft apparently wants a piece of the action for it drowning Windows Mobile platform

Some believe the path to success runs through a Walmart approach, addressing many phone types.
mobango, for instance, is a true alternative marketplace – relaunched in October 2008 with free content only (for now?) and an associated social network for content sharing.

Nor are the carriers being shy about getting their slice.

O2 is getting into the game. This wants to be a multi-platform store – including Java as well as OS-specific applications.

Same for TMobile.

My question is: Aren’t all these alternative markets competing for the same space Handango has been in for years…with only moderate success? It seems to me that Apple is finding lots of success with its ‘captive marketplace’ approach – a repeat of the iPod/iTunes model. With a fanbase like Apple’s, maybe that’s no surprise. Similarly Google, with its more open model but heavy impact of Google’s name value, will be serving apps into the space it created. When you remove the industry’s two thought-leadership devices from the field, you’re left with the old-school, way-too-disjoint-and-fragmented market where every buy-button has to have a caveat near it advising where the app will and (mostly) will not work. It might also be said that such marketplaces will highlight the abysmal state of mobile phone software and, indeed, drive users to Apple and Google (and thus to those marketplaces). Therefore, in my mind, these alternative marketplaces don’t have a bright future.

Incidently, and in a tip-of-the-hat to professional journalism, Wired Magazine has covered this topic, albeit less extensively, here.

Medialets has reported their results from monitoring Google’s Android Market (the official app store for smartphones based on the Android platform).

Granted, we’re early days with this marketplace, but frankly, it’s great to see applications other than games in the Top 10, though it’s depressing to see Pac-Man Mobile in the #1 slot. The leadership of gaming in this industry continues to point to immaturity, in my opinion.

Personally, I’m particularly pleased with The Weather Channel’s namesake application. ShopSavvy, also here on the Top 10 list, is also a great use for one’s mobile phone (though, it is sometimes difficult to get connectivity inside large shopping facilities).

By the way, if you’re a fan of QR codes (we are!) find the Barcode Scanner application in the Shopping section of the Market. It recognizes QRs and will “do the right thing” when you photograph one.

We should keep in mind that the Android Market is not accepting paid applications until 2009. So, unlike the Apple iTunes App Store, we’re only seeing that portion of the market willing to give their applications away (either as a means to increase traffic to existing services or simply as a means of testing the waters).

Speaking of the iTunes App Store, Ben Lorica over at O’Reilly has some good articles about what’s happening in that marketplace. Quite a contrast there, compared to here in the Android space – at least in this nascent early-adopter period. Strange to find the social networking applications low on the App Store list, though.