I picked up a recent copy of Rolling Stone magazine which carried a double page ad for the MyHero3G ‘phone from T-Mobile [the HTC Hero in the UK]. The ad, like the TV ad [at the bottom of the page] promotes the fact it is ‘with Google’ but makes no mention of the Android brand nor does it include branding of the Android. Is this a concious decision by Google to not promote the brand?

Similary, there is a full page ad for the Droid which carries no Google branding at all. Is Android not a selling point?

As a side note, the copy of Rolling Stone also included two ads for the iPhone [one solus for Rhapsody, one for AT&T and apps]

On a total side note, try www.google.com/android – nothing there!

Gameloft, the french mobile game maker of such hits as Assassin’s Creed, and The Settlers have announced that they ‘and other software developers were reining in their Android development budgets because the app store was not as nice as iTunes (very true) and they weren’t making as much revnue as iTunes (expected.)

The article doesn’t mention which other developers are cutting back, but quotes Gameloft finance director Alexandre de Rochefort,

We have significantly cut our investment in Android platform, just like … many others,

This announcement that they have cut their investment is interesting but not really a surprise if they are measuring the investment with direct sales, given they have a duty to their shareholders. However, I don’t believe this news is a ‘death knell’ for Android but merley the decision of a public company to scale back investment in an unproven market.

The news that they are selling 400 times more games on iphone [than Android] and that iphone apps are 13% of its profits is a sign of a successful and mature [in relative terms] market. What this report does not tell us is how much they had invested in Android Apps, nor how much they have scaled back.

Given that Android has the potential [at least according to Gartner] to leapfrog the iPhone by 2012, one would hope that Gameloft continue to invest in Android development, even if it is billed as ‘research and development’ rather than immediate income generation.

Mobile Apps are set to become even bigger business in 2010. With Apple already generating a reported $200m in app revenue (that’s only 30% of the pie) Google’s Market and Nokia’s Ovi Store have both opened this year to tap into this booming market. Whilst some way behind in scale, I believe these app stores represent a signifcant shift in mobile consumption and in turn the actual business model for mobile companies. No longer will mobile ‘phone promotions be purely about what the ‘phone can do but what you can do ‘on the ‘phone.’

The latest promotions from Apple and from Nokia both concentrate on the apps, rather than the handsets.

Joining the bandwagon today is Samsung, which will open an App Store for independent apps next year. To quote the FT,

Samsung’s first smartphones using its bada platform will be released in the first half of next year, together with an “app store” that is meant to include at least 1,000 applications.

The latest research from emarketer also points to next year and beyond as ‘big’ for app revenue. I quote,

Mobile applications are a major channel for content delivery to mobile devices. In September 2009, the Yankee Group estimated that US paid smartphone application revenues would reach $4.2 billion in 2013—an order of magnitude above the 2009 estimate of $343 million.

In time it will be the mobile ‘phone companies without mobile app capability [and associated stores] that will be the laggards.

There is a new mobile ‘phone war happening, and its not just between handset manufacturers. In the past when mobile phones were being bought the questions were around style (remember the ‘clamshell’? ) and what the ‘phone would do .. Bluetooth, Tri Band etc. But now I believe these are changing to what can be done on the ‘phone. Applications that are freely available on computers and the web are now being touted as USP’s for a particular ‘phone brand. Take the UK network 3. Their promotions revolve around tools we take for granted online as being ‘free’ on their platform including Google Maps and Windows Live Messenger.

Furthermore, the latest promotions from Nokia, a company that has been struggling without a ‘hit’ smartphone (read Om Malik’s, “The iPhone & Nokia’s Troubles, By the Numbers“) has been not about the handsets but about what you can do with the handsets. This in the form of their OVI Store promotions which are taking full advertising on and offline (including TV spots) to promote what you can do, rather than their latest ‘phone.You may recall the OVI store launch being riddled with problems which will not have helped Nokia’s fortunes.

The big battle that I see is the iPhone vs. Google Android in which the number of apps available has been one of the benchmarks for comparison. Some put the numbers at 1m + apps for iphone, 100,000 for Android. Certainly, as a user of both ‘phones the number of apps available on the iphone and the ease of access [to these apps] on the iphone far outstrips the Android which is one of the main reasons I use the Android less than the iPhone.

The App as the Hookor ‘The Killer App’

The concept of the ‘Killer App’ is not a new one but one I feel is particularly relevant here. Nokia is trialling a free version of Shazam, the mobile music recognition software in the hope it will drive additional music interest and resultant sales of music on Nokia handsets. Music again is the promotion for the newishly released Spotify apps for iphone and Android. The app, limited to premium customers is one potential killer app that could generate interest in new mobile phones. I personally feel a smart move would be for a provider (Handset, Operating System or Network) to subsidise the premium Spotify price to gain market share, much in the same way as Nokia is doing with Shazam. However vested interests of music sales for most players (except Google) means such a tactic may not happen. Putting music to one side, the principle remains strong if there is a new killer app that will kick start interest in mobile ‘phone sales.

The Concept of App Loyalty

As the market matures, or in the interests of gaining customers one has to pay attention to App Loyalty. If the app becomes ‘the thing’ then each platform will need to have the common tools offered by others. Let me explain, I have an iPhone and a Hero (Android.) On my iPhone I love:

1. Tweetie for Twitter
2. Portfolio Live for tracking stocks
3. Evernote for filing
4. Spotify for Music
5. Flight Control for games

Which ones can I get on Adroid?

1. Twitdroid is as close as I can get, but not nearly as good
2. I cannot find a decent portfolio manager
3. I have to use a PixelPipe ‘hash’ version which requires a Pixelpipe account (I don’t have one)
4. Yes, and its great
5. No, I can’t find anything close

Now one of the issues with this is finding the apps. The app store Market on the Android is poor with little visibility of all the available apps, few categories in broad brush strokes like ‘finance’ which covers everything from mortgage calculators to tip calculators and share price tools. Trying to research these on the website for Android is equally hard as only a handful of apps are displayed. Furthermore the quality of some of these apps is questionable which,without better filtering brings down the overall quality of the market.All is not lost, however, there are some great apps for Android (I like the WiFi Analyser) but I find them through trial and error rather than a pleasurable shopping experience.Larva Labs post a great article covering more of the Market’s shortcomings.

If for final evidence, if you will, of the importance of apps it is the revenue they generate. GigaOm estimate Apple sells $2.4 billion worth of apps every year in their store. If Apple retain 30% of the sale value (says Infobeans) that would equate to around 15% of their 2008 profits. Something not to be sniffed at.

Google’s mobile aspirations continue apace. A Firmware update is planned for Android (2.0, known as Eclair) which will bring even more enhancements to the Android ‘phone and it looks [from this walkthrough] that the UI will become a lot smoother. News also reaches us that Google are building their own ‘phone to be sold directly and not through the Telco’s. To quote Thestreet.com,

In what is likely to be seen as disruptive to the wireless status quo, Google is working with a smartphone manufacturer to have a Google-branded phone available this year through retailers and not through telcos, according to Northeast Securities analyst Ashok Kumar, who has talked to Google’s design partners about the plan.

This news comes on the heels of a Garter report predicting the Android operating system to be the second largest mobile operating system by 2012. To quote Computerworld who ran the story,

Gartner forecasts Android will actually rank second globally, behind the Symbian OS, which is used in Nokia devices that are highly popular in Europe and many countries outside the U.S. Symbian now runs on about half of all smartphones, but will fall to 39% in 2012, Gartner says.

[I'm still trying to find the actual report quoted, I'll link it here if I do.]

And today we see Google Analytics add a rash of new improvements to help us understand traffic from mobile platforms including identification of which mobile platforms. Quoting econsultancy,

As part of an upgrade to Google Analytics announced today, Google is introducing a numer of useful enhancements,  including the ability to track traffic to both mobile sites and applications, and explanations of what device is being used. Meaning that marketers will be able to track digital campaigns across web and mobile platforms.

Whilst this is not a directly related point to Android it is also another important sign that Google is visibly growing the attention is it giving to mobile platforms.

–

Eclair image courtesy of QuintanaRoo

These are my bookmarks for June 29th from 12:56 to 14:15:

• Tether Free for iPhone 02 – Tether Free is an application written to let you use the Internet on your iPhone for free. It uses the same access point for tethered access as your iPhone uses for normal data so as far as I can tell no additional charges *should* be incurred.
• Google move paves way for Firefox on Android | Webware – CNET – Google's move to let software run natively on Android devices opens the door for a version of Firefox that can run on the operating system.

Spotify recently announced their plans for a mobile version available to premium subscribers. This video, released by Spotify today shows how it will work on the Android ‘phone.

This video demonstrates the ability to synchronise play lists instantly and cache songs for playing offline or in places with limited connectivity. Sweeeet.

I still have invites available if you are not already connected. Just leave me a comment and I will get you one.

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