The hunt for the holy grail of app revenues

2025-06-06-28 20:47 0

After more than 15 years of trying to develop functioning and profitable application ecosystems, the mobile industry finally seems to have found a recipe to successfully commercialise mobile applications. But the movers and shakers were not the mobile operators. A fiercely consumer-orientated company, Apple, had to enter the ring to prove the point that there is good money to be made if the players get it right.

Time for a rethink in the mobile world one would imagine, and hope. However, whilst everybody admires today’s achievements of the former nobody in this new mobile space, we see the same old mistakes repeated by the incumbent pundits. Despite a flurry of activities and almost daily announcements of “ground-breaking” initiatives it is puzzling to see an increased fragmentation, and one constantly wants to shout out “it’s all about the end-users and the applications developers, stupid!”

Rewind three years back and focus on the supply side of the value chain – the mobile applications developer community. Since then, we have seen huge efforts going into the streamlining of platforms, certification processes and channels to market.  However, if anything, the situation has worsened for a developer rather than becoming more compelling. The initial three-horse race of Java ME, Symbian and Windows Mobile has swiftly been exchanged for new acronyms and technologies.

Nokia and Intel have given us MeeGo and Ovi (besides still continuing Symbian), Windows Mobile is stilling hanging around while new kids in town emerged in the shape of Apple and Google. Operators have started setting up their own clubs in the form of JIL, OMTP, WAC and LiMo, to name a few, not to mention some of the “lesser” platforms from a range of Asian manufacturers.

What technology is right for me?

This obviously raises the question  ‘What is the “best bet” for an application developer?’ which ultimately can’t be answered generically as it depends on many commercial and technical parameters.

Developing native applications – applications that are based on the proprietary OS of the device rather than “open” platforms – limits the addressable market per-se. Using more generic environments such as browsers or widgets tends to restrict the mobile application development in terms of the functionality offered. And in any case, developers will be all too aware of the tweaks they have to introduce to their software when expanding from their initial target device.

Whilst standards such as HTML5  are promising some unification of platforms and functionality, in reality there are still (and will be) a lot of implementation variations. Mobile Linux in its various guises is as fragmented as it ‘s always been, and the old guard of Windows Mobile and Symbian seems to be gradually losing its followers. The number and quality of developers that can be mustered also often needs to be given serious thought before starting any mobile application development project.

Will they ever get it right?

As an application developer your first consideration is your target market, and the way in which applications are proliferating. And as developers are in many cases likely to be small start-up companies, until the arrival of the AppStore model it has always been a struggle of David versus Goliath to get traction and volume.

Try to get meeting “airtime” with your preferred service provider to get your application into their storefront, and you’ll find you‘re ‘sniffed at’ if you can’t promise a significant improvement in their revenue. Try to get past a manufacturer, and you find, before long, that your reputable future partner has stolen your idea and built a similar native application into their next phone range.

No wonder then that Apple has put the cat among the pigeons by cutting out the middlemen, simplifying development, minimising the manufacturer influence and channelling the majority of revenue back to the developers. Not all is rosy though, with critics often citing the iPhone’s rather specific and peculiar development environment (based around Objective C), Apple’s somewhat unclear certification criteria applications and it’s still limited market reach. Whilst these complaints might be driven by a certain degree of envy for Apple’s success, there are still several learning points for anybody with the ambition to venture into the wild world of mobile applications.

From an application developer’s point-of-view, maybe the most important technical issue is a single platform, which massively limits development and test effort, and shortens time to launch and commercialising a product. This is perhaps a goal never to be achieved universally, with even Google struggling to keep a lid on the variations of its Android zoo – so different are the mobile device properties such as display sizes, processing power, platform features etc. Taking 2008 as a reference point, an “average” application that could run on about 50 per cent of the mobile handsets out in the field would have to be ported onto more than 25 different platforms. A snapshot in early 2010 revealed that this number had risen well above the 30 platforms mark.

Another crucial ingredient for fostering a functioning developer eco-system is the availability of platform documentation and support services. There is nothing more frustrating and time-consuming for a developer than chasing specifications, API definitions, variations on different platforms etc.

Most mobile application developers don’t have the luxury of being gold partners of manufacturers, and may not get up-front visibility of new platform versions. Also these companies don’t necessarily work closely with manufacturers. More often than not, manufacturers seem to think there’s no need to disclose developer-grade information. But in fairness, not every manufacturer is equally bad in this respect, and there are several independent developer forums that can shed light on issues.

He is my customer – or is he?

On the commercial side of things, the obsession of “owning the customer” is well documented and – much to the frustration of application developers – has proved a major hurdle to a flourishing application eco-system. Up to now manufacturers and service providers alike have almost always stood in the way between the supply side (developers) and demand side (end-users).

Do you need to use advanced features in the platform?
Well, not without the (expensive) blessing of your manufacturer or operator.

Does your application infringe the (often silly) branding guidelines of your target manufacturer or operator?
Well, bow to the powers or throw away your product.

Do you require marketing support from the big guys?
Sorry, join the queue and we will consider your case…

And while it is by no means an ideal world in the Apple camp, at least developers get some solace and less fuzz when commercialising their intellectual property. Whether it’s access to some of the standard apps on the phone, the ability to generate and participate in advertisement revenue streams with their apps sales, or a well organised store front – the new old players have still a lot to learn.

It remains to be seen how serious manufacturers and service providers are when it comes to fostering an environment that provides truly compelling propositions for end-users and developers, and how willing they are to share the spoils. For the sake of consumers it must not take another decade.

Jurgen Wittkopp is a Communications and Electronic Systems expert at PA Consulting Group