Tuesday, 21 July 2009

I hate app stores. We ISVs need to get smarter than the industry followers of fashion!

The BBC Technology site ran an article yesterday "Apps to be as big as the internet" which sounds great but underneath the bonnet is a very scary forecast of the future for mobile app developers: basically, we're all like pop bands vying to be Top of the Pops. As Laurs from Getjar and as Sebastien de Halleux of Playfish confirms from experience, ISVs in the mobile space are one hit wonders. How on earth can ISVs run a sustainable business this way with such high but shortlived peaks and troughs which are long in time and deep in cash burn!?

Personally I don't know if I am a fan of the new Symbian brand identity and I also wonder whether their PR machine is needing some oil: an article on the BBC site 4 days earlier announcing Horizon aka Symbian mobile app catalogue is coming and yet in yesterday's newspiece, Lee Williams aparently says the industry doesn't need anymore app stores and the concept is flawed. Nevertheless, despite dodgy branding and slightly misaligned PR from Symbian, I agree 100% with Mr Symbian's sentiment.

Dealing with Dichotomy in the ISV business model
Ok, there is the app store. Not a business model any ISV wants to rely on to grow a sustainable business.
The opposing view for ISVs? In a previous post I referenced Vision Mobile's 100m club i.e. the ISVs who have their wares embedded on over 100m devices. "Embedded" is the important word here folks. Get embedded and you get revenue. How good the revenue is of course depends on how highly valued your software is perceived by the OEM and on your negotiating skills when it comes to Request for Pricing docs and beyond. The problem is it is hard work getting embedded. Putting aside levels of funding and business processes you'd need to have to become a trusted supplier to a global OEM, you also need to get real with your embed price. And OEMs will drive it only one way! So maybe embedding as a business model for ISVs stinks too?

Life enriching apps vs Hedonistic apps
The ISV needs to take a look at its products and decide whether they are just app store fodder or the apps developed will "enrich your life" as Lee Williams says. Hedonistic apps won't be embedded but apps that are either core to driving the user's personal communication network (solutions and technologies enabling messaging, voice, sharing, location, context) or driving media consumption have every chance of being embedded. If apps drive data usage, you're on the right track. Just get some good product marketing to align your offering to the OEMs handset strategy and sales people to get the right meetings at the right OEMs or MNOs.

Embed+Modular Architecture fit into the handset software lifecycle
Embed is the business model every ISV worth their salt needs to follow. But ISVs need to get smart on maximising the value from their product. OEMs are driving down BoM costs so get modular, split your product apart. Get money for embedding even if it is low BUT BUT BUT have hooks into your other modules which are your products or services users can find and will pay for post sale (see Handset Software Lifecycle by Vision Mobile). Share revenue with the OEM and the telco operator. This isn't easy but its better than drowning in an app store among 1000s of other sinking apps where no one knows your name.

Lee Williams says "give the consumer the opportunity to wander down a really relevant aisle of content and applications that they can get access to" so don't rely solely on an app store. Get embedded and take users into your own "store" of highly relevent products and services which plug into your embedded app. If you implement this well, the user doesn't really think "I'm shopping for apps". They are using the functionality anyway and a micorpayment for deeper features that enrich the experience is a no brainer.

Sat Nav is a great example. Nokia maps is useful to a point. The user can find their location and get routes but if you want turn by turn voice directions or city guides, you need to pay a few euros. The Map app has its own little ecosystem of software and services the user can quickly purchase.

Last.fm could be applied to handset in a similar way. Mobbler is a symbian client for Last.fm and stream music to the device and provides links to Amazon for download sales. Why is a handset OEM not partnering with Last.fm? its social, it drives data usage and there is revenue from downloads.

KeyPoint Technologies is reinventing predictive text. Yes, they embed their Adaptxt software but let the users buy additional languages for a few euros not stored in Rom and share revenue with the OEM. This removes the painful inflexibility of language packs for the user and the OEM sees revenue from text entry. Input is central to a users device experience. What other apps and services can be plugged into predictive text?

Users hate searching but love downloading
I don't have any empirical evidence but I believe Apple's app store doesn't prove users love hunting around catalogues. It proves they love downloading direct to their mobile. Get your AddOns or plugins intelligently positioned in front of a user via your embed, and the downloads will follow.

And look, the blog trend analysis tool says the same. Downloading is king. App stores ain't that exciting!

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