How fast is the mobile industry growing and which platforms matter most? These two key questions should drive enterprise mobilisation strategy. Adoption statistics help to characterise how urgently enterprises should mobilise. Choices on approaches to mobilisation should be governed by an understanding of the relative importance of various mobile platforms and just how many there are.
First, take a look at these US market adoption stats. This is an eye-opener on how fast users are adopting mobile data services of all types. These figures show 51% user growth in 12 months between March 2008 and March 2009. Suffice it to say this dramatic growth trend has only escalated moving forward from March 09.
The mobile web continues as the main access method. This is interesting, as great mobile browser capabilities have only just arrived in the past couple of years. Mobile Web, SMS and Applications are growing in lock-step, with SMS and Apps showing higher percentage growth numbers, but on smaller bases. SMS and Apps will continue to be strong, indeed with the boundaries between the Mobile Web and Apps getting very blurry as time goes on!
Now, compliments of Mark Caron, below is some straight talk on the iPhone and background on the diversity of platforms out there. This really highlights realities of the marketplace that will drive continued divergence in platform attributes and dictate the need for broad support of all mobile platforms, particularly in business to consumer applications.
Fantastic as it truly is, the market-share and future prospects of the iPhone must be kept in perspective. Other phones are here. More are on the way. This highly fragmented marketplace will continue be highly fragmented, with a few big dogs and new contenders constantly arriving! Investments must be carefully considered!
Dave
Reprinted from Mobile Marketer:
http://www.mobilemarketer.com/cms/opinion/columns/3839.html
August 5, 2009
Mark Caron is CEO of Snac Inc.
By Mark Caron
While the iPhone has been one of the most successful mobile devices in history and has clearly created a whole new level of engagement with mobile applications, the excitement surrounding it has blinded the industry from a frank assessment of where the iPhone is, and what it is lacking.
The facts are that it currently is, and will likely remain, a small slice of the mobile market as a result of its singular product offering, limited functionality – even with 3.0 – and high cost of ownership.
Attending mobile conferences and reading mobile blogs and news, it is easy to believe that the iPhone has taken over the world, or at least is destined to do so very soon.
Hearing developers say, “The iPhone is the only platform that matters,” and seeing half of every conference audience raise their hands when the speaker asks, “How many of you have iPhones?” reminds me of a story about the BlackBerry in 2003.
I was pitching a venture capitalist about the emerging growth in text messaging, and he interrupted me saying, “Why would Americans text message? Everyone has a BlackBerry.” I happened to know that BlackBerry maker Research In Motion was approaching its millionth subscriber, so I decide to play with this guy a bit.
“What percent of U.S. mobile subscribers do you think own BlackBerrys?” I asked. “I don’t know – maybe half?” he responded. When I told him it was less than 1 percent, he refused to believe it. “Everyone I know uses a BlackBerry,” he said.
Niche market
The
facts are that AT&T probably has between 9 million and 10 million
iPhones active on its network, even after the introduction of the 3G S
in mid-June. That is about a 3 percent market share nationwide.
When Apple/AT&T announced first-quarter 2009 U.S. iPhone sales of 1.6 million units, everyone cheered.
Knowing this number was lower than earlier quarters, I scoured the media for some critical assessment of iPhone’s trajectory. I could not find a single article that mentioned iPhone’s first-quarter sales represented the second consecutive quarterly decline in unit sales, and that sales had fallen 33 percent from their peak in the third quarter of 2008.
In addition, you can bet that second-quarter sales would have been down again, probably way down if Apple had not slashed the price to $99 on June 6, and launched the 3G S model.
And given AT&T’s generous upgrade plan, do not be surprised if many or even most of the new iPhones are being sold to existing iPhone users upgrading from their older iPhones. This will slow the growth of the iPhone installed base even more.
It certainly seems that the Apple-lover market is nearly tapped out, and the brutal competition of the mobile phone industry is in full swing.
It is safe to assume that Apple will never get above single-digit market share unless it makes massive investments in a very broad product portfolio, just like the major handset players have done for years.
This would likely lead Apple to have margins that gravitate toward the mobile industry mean, so do not expect to see it happen soon. Like the Mac, mobile products from Apple will remain a niche market.
Great phone, but …
But what about those 65,000-plus amazing iPhone applications?
Indeed, iPhone applications have broken new ground in level of user engagement. The cool visual effects alone make the applications fun to play with – I love the deleted file getting sucked into the garbage can – but many applications go further with the pinching, squeezing, tilting, shaking and even blowing into the microphone, making for a truly engaging experience.
While these applications have opened a whole new market, “engagement” is not always the goal for mobile users. More often than not, mobile users just want to get something done fast – while walking/talking/driving and using one hand and not pinching/squeezing the screen with two hands.
And here is where the iPhone falls down.
Have you ever noticed that the weather icon on the iPhone always shows “Sunny and 72”? That is because the iPhone, remarkably, does not support applications running persistently in the background.
The only way to get the current weather on the iPhone is to launch the weather application and let it retrieve fresh data. And on the iPhone, only one application can be open at a time.
Ironically, the iPhone is the only smartphone platform that cannot run third-party applications persistently in the background.
Windows Mobile, Symbian and BlackBerry have been running third-party applications in the background for years. Android and Palm Pre do it, too. Now even proprietary OS feature phones, such as ones from Sony Ericsson can do this.
Many developers were sorely disappointed, and some shocked when Apple announced that the new version 3.0 of the iPhone OS would not support application multitasking.
This limitation prevents whole classes of applications from running effectively on the iPhone, including persistent messaging/communications, LBS tracking, enterprise monitoring and widget applications.
T-Mobile and Sprint have been hammering AT&T on this point. It is not just the upfront device cost. It is the ongoing monthly cost. To buy an iPhone you must commit to two years of a minimum $70 per month plan – $40 for voice, $30 for data. With fees and taxes, that is nearly a $2,000 commitment – a huge barrier for most Americans, especially during this recession.
What many consumers, but few industry insiders, are increasingly realizing is that their existing phone or a “free” new phone on a $5-$15 per month data plan can access more than 1million mobile-optimized Web sites, and some very cool new mobile widget applications for fast access to top Web services and content.
And many of the new “feature” phones have touch screens and QWERTY keyboards, so consumers think they are getting a “smartphone” but at a fraction of the ongoing cost. This is a core reason feature phones remain the vast majority of the installed base and continue to outsell smartphones by two-to-one.
The iPhone has brought remarkable innovations to the mobile industry, but we do ourselves a disservice if we do not keep its role in perspective and exert our collective industry efforts accordingly.
Mark Caron is CEO of Snac Inc., New York. Reach him at
mark@snacinc.com.In the last post, How to Mobilise? (Aka: Why ShrinkRay?), I suggested enterprise mobilisation questions that decision makers should consider:
In earlier posts, starting with The Mobile Channel, I addressed some key strategic considerations. The concluding Mobile Channel (Part 4) post provided this summary:
Companies should urgently establish a mobile channel. This should be part of a broader, urgent strategic action plan to radically escalate customer experience management capabilities across all contact channels and mechanisms.
Among the recommendations, deliverables and actions:
1. Optimise agility across all current and new channels to maximise likelihood of engaging the customer in the channels and places they choose.
2. Avoid the creation of new organizational and technology stovepipes to implement channels and to manage and measure across all channels. This will lead to unsustainable costs, unresponsive services and excessive delivery intervals for crucial capabilities. Companies should streamline and align technology and organizations to maximise the customer's ability to control their contact channel choices in real-time.
3. "The customer, not the channel, must become the point of integration for marketing programs and spend decisions." Align the marketing organization around the customer as much as possible, rather than following past practices of aligning marketing organizations against channels and thereby indirectly to specific customer groups.
4. Implement real-time measurement and analytics processes to adjust and manipulate the channel mix and capabilities in response to detailed knowledge of customer behaviour on each and every interaction.
Ok, great! Pretty lofty goals! How to get this rolling without breaking the bank? How to do something affordable but with real, long-term strategic value?
Remember, there are really only two main options:
1. Build a mobile application and deploy it to each mobile phone you want it to run on.
2. Build a web application and access it from the mobile browser.
If you look across the marketplace, there's a fair tilt towards constructing mobile applications compared to delivering mobile web applications. A great many people don't look too much further, particularly since most executives have attempted to browse the web on their Blackberry and experienced, first-hand, the challenges in web application delivery to mobile browsers.
Web pages were not designed to run on mobile networks or for small mobile phone screens. Even the best modern 3G mobile connection is slower, more error-prone and has higher latency than fixed broadband networks. The pages take too long to load on a mobile phone browser, if they load at all. They don't fit on the screen. Users can't find the functions they want. And mobile devices are not as fast or as capable as a PC. Mobile browsers vary wildly in their support for all the stuff that makes PC browsers run so smoothly. The state-of-the-art iPhone doesn't support Flash, and frequently doesn't process javascript on advanced web2.0 sites. Windows Mobile, RIM and other leading platforms all have their own set of issues. All quite different.
In the picture below, I've added the rocket-propelled car to symbolise the rocket-speed broadband corporate network and a nimble ATV to symbolise the equally sophisticated but wildly different attributes of wireless networks web. Web application traffic must traverse both types of networks to get to the mobile browser, and this will clearly be a problem if the web application was never designed with this requirement in mind! It's quite understandable why web applications must be specifically tailored to mobile networks, just as much as the mobile device they are intended to run on.
It's pretty easy to see why mobile applications look like a good bet. Developers are able to take full advantage of device capabilities to tailor the look and feel of the application. Integration with on-device functions like the contact PIM, the camera or the GPS is easily done with the provided API's. The amount of data exchanged with enterprise servers can be minimised. The application can be designed to minimise reliance on anything that has to be sent from a server. This approach is successful at providing a highly responsive solution that optimally presents the required functions. The approach has been attractive to some:
The drawbacks of the approach are significant:
At this point, it's a good idea to read backwards, and look at some of the key recommendations for enterprises implementing a mobile channel. Building mobile applications from the ground up does not address many of these requirements. The approach makes sense for applications which will have a large enough user-base to amortize the development and deployment cost on each selected mobile platform and also the extra costs of managing interactions that cross to other customer communication channels. Otherwise, it's a fundamentally a bad choice, and it's no coincidence, you don't see a lot of enterprises building out enterprise mobile applications.
Mobile application creation is costly and violates key channel management considerations for enterprises. Existing web applications don't run well on mobile phone browsers. The only other approach is creating new mobile-specific web applications. And if you do the research, there are a number of technologies for building these. However, they share the same problem that mobile applications have: Building a new mobile-specific web application will require a new presentation technology stack, and this triggers the need for complete, parallel mobile-specific development cycles that must be coordinated with changes to the corresponding web applications.
This brings us to the reason ShrinkRay was conceived! It solves the problem of creating mobile-specific web application presentations that perform extremely well on mobile networks. It does so in a novel way that avoids the "new technology stack" problem and positions the enterprise to take full advantage of emerging mobile technologies. In the next post, I'll explain how we overcome these issues and provide some great examples of ShrinkRay in action.
I'll leave you with an update to the last picture. This one shows ShrinkRay inserted to solve the problems involved in making web applications work on mobile phone browsers. Note, with ShrinkRay, the rocket-propelled car is running all the way across the mobile network to the mobile browser!
Dave
Dave Dingle
Co-Founder, BoomBoat Inc.
