Feeds

Apple, Walmart, and you: Making money in mobile

Serving the goldfish generation

Boost IT visibility and business value

Open...and Shut Mobile is top-of-mind for every developer and every business, but it's not yet reaching stuffing-of-wallet for much of anyone.

The problem, as one friend described it to me yesterday, is that mobile users have the attention span of goldfish. When users are in and out of an app or website in few-second snatches, the chances to actually make money from them are fleeting, whether you're selling web services or apps.

What to do?

The problem isn't that people don't spend enough time with their mobile devices. They do. Ever since the CrackBerry hit the market, people have been gorging themselves on mobile communications.

The problem, it seems, is that this "gorging" comes in snack-sized bites for which few seem willing to pay. This is confirmed by new Ofcom research data from the UK market, which shows vastly increased mobile activity combined with stagnant mobile revenue growth over the past 10 years.

Carriers make money providing the data services, but see razor-thin profit margins. App developers, for their parts, make even less money, and negative margins. Apple has relegated the carriers to the role of infrastructure providers: they sell network time and little else, despite their best efforts.

App developers, for their parts, have been sucked into the Apple reality distortion field, wherein they sell apps for $0.99 each (or whatever the price), Apple takes 30 per cent, and ... that's it. This is not a great business model – and not only because the app sale model is in decline, by some metrics.

As Google's Tim Bray suggests, "Selling anything on a one-time basis at a price below $10 is historically the kind of business that's been owned by companies like Walmart." Walmart is obviously a big company, but there aren't many like it.

And in the case of mobile, Apple is more akin to Walmart than anyone else, because it's Apple that owns the relationship with mobile users, not the actual app developers.

But this isn't really a question of app sale versus in-app purchasing versus something else. It's about how to engage users over a long enough period of time that they're willing to pay. While the web has traditionally excelled at fueling discovery of brands/services/etcetera, apps have been champions at driving user engagement.

The trick, however, is to convince someone that it's worthwhile to buy an app in the first place, or simply download it. This turns out to be non-trivial.

So now people are shifting the conversation from app downloads to app engagement, as Urban Airship's Scott Kveton does. However a user finds their way to the app – be it via an app store's "Top 25" list, a news-article mention, a "click-to-add-to-home-screen" web-app function, etcetera – the trick is to engage the user in a meaningful, if quick, manner.

And while few are currently doing this, it strikes me that a key way to motivate user engagement is to make the app experience extend beyond any single device.

My attention is increasingly split between the various screens (smartphone, tablet, laptop) I carry, so an app that allows me to start reading a story about how Arsenal has failed to sign yet another player, for example, should continue with me once I shut off my smartphone and open my tablet. I may have the attention span of a goldfish, but if an app can stitch together my truncated mobile experiences, the more likely I'll be to recognize the aggregated value of the app.

Which is, of course, just a guess. The thing that is increasingly clear to me in mobile is that no one has yet to figure it out. The development methodology. The business model. Everything is up in the air.

What do you think is the key to a winning mobile experience? And, perhaps more telling, which apps do you find yourself paying for, versus "snacking on"? ®

Matt Asay is senior vice president of business development at Strobe, a startup that offers an open source framework for building mobile apps. He was formerly chief operating officer of Ubuntu commercial operation Canonical. With more than a decade spent in open source, Asay served as Alfresco's general manager for the Americas and vice president of business development, and he helped put Novell on its open source track. Asay is an emeritus board member of the Open Source Initiative (OSI). His column, Open...and Shut, appears twice a week on The Register.

Secure remote control for conventional and virtual desktops

More from The Register

next story
UK fuzz want PINCODES on ALL mobile phones
Met Police calls for mandatory passwords on all new mobes
Don't call it throttling: Ericsson 'priority' tech gives users their own slice of spectrum
Actually it's a nifty trick - at least you'll pay for what you get
Three floats Jolla in Hong Kong: Says Sailfish is '3rd option'
Network throws hat into ring with Linux-powered handsets
Fifteen zero days found in hacker router comp romp
Four routers rooted in SOHOpelessly Broken challenge
Netflix swallows yet another bitter pill, inks peering deal with TWC
Net neutrality crusader once again pays up for priority access
New Sprint CEO says he will lower axe on staff – but prices come first
'Very disruptive' new rates to be revealed next week
US TV stations bowl sueball directly at FCC's spectrum mega-sale
Broadcasters upset about coverage and cost as they shift up and down the dials
Tech city types developing 'Google Glass for the blind' app
An app and service where other people 'see' for you
Canadian ISP Shaw falls over with 'routing' sickness
How sure are you of cloud computing now?
UK mobile coverage is BETTER than EVER, networks tell Ofcom
Regulator swallows this line and parrots it back out at us. What are they playing at?
prev story

Whitepapers

Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Top 10 endpoint backup mistakes
Avoid the ten endpoint backup mistakes to ensure that your critical corporate data is protected and end user productivity is improved.
Top 8 considerations to enable and simplify mobility
In this whitepaper learn how to successfully add mobile capabilities simply and cost effectively.
Rethinking backup and recovery in the modern data center
Combining intelligence, operational analytics, and automation to enable efficient, data-driven IT organizations using the HP ABR approach.
Reg Reader Research: SaaS based Email and Office Productivity Tools
Read this Reg reader report which provides advice and guidance for SMBs towards the use of SaaS based email and Office productivity tools.