Tuesday, November 19, 2019

How are mobile apps/services going to make money? – Not sure I like the question.

April 27, 2009 by · 16 Comments 

Tracking GPS mobile phone in realtime on Googl...
Image by earthhopper via Flickr

I’ve been in several tech events lately where people ask:

‘How are mobile apps/services going to make money?’

While the typical answers range from advertising to micro-transactions; I think this question is fundamentally flawed. I think it is as flawed as asking ‘How does the internet make money?’

Just like the internet enables services and products to be sold or subscribed to on the web, the mobile web (if you even want to consider it as a separate entity) does the same. The difference between the two and the key to the mobile web’s monetization, I believe, is on how people interface with their mobile devices.

Let me explain.

I don’t have any data to back this up, but I think most people (at least with current-gen smartphones) will anecdotally agree with my following statement:

Whilst the keyboard is overwhelmingly the preferred data input-method of choice on a PC, on a mobile device, other features such as the camera, GPS and voice/sound can play an almost equal part in how a user interacts with data on their device.

On a PC, I don’t mind typing in my location to do a search in Google, but on a mobile device, the keypad (even if it is QWERTY) is still small enough to annoy anyone that needs to type in ‘London’ repeatedly when looking for local restaurants. I know many of us are just as fast with our Suretype, Qwerty, and T9, but I’ll speculate that none of us really ‘enjoy’ interacting with sites that are not mobile friendly and that require too much keypad input on a phone.

So, while existing website optimization is imperative to allow the mobile user to quickly consume the data they require on a small screen, the mobile phone unlike the PC has tools (microphone, GPS, camera) that are used more frequently than on a PC to expedite and streamline this process. For example, on a mobile, we’ve seen applications like Shazam which allow us to use our phone’s microphone to search for music we are listening to now, applications like Urbanspoon that use our phone’s GPS/triangulation to find a restaurant near where we are now, applications like Shozu which allow us our phone’s camera to share pictures we’ve taken now, applications like camera-based bar-code readers which allow us to quickly navigate to mobile web links that we are interested in reading, applications like Spinvox which allow us to simply make a call to send ourselves a text note on something we thought of right now, applications which allow us to use the accelerometer to play games, and applications like mobile payments on NFC compatible phones (or via SMS) which allow for us to pay for stuff that we want right now.

Through the use of the hardware features the mobile phone has, not only can a mobile web user achieve a close-to-PC interaction with search services like Opentable, but a mobile phone can also exceed the PC in ‘value to the user’ because most people carry their phone with them at all times. It is also important to note that it wasn’t until recently that this claim could be made. Just 3 or so years ago, the Motorola V3 with all its limitations was cutting edge. It is the innovation of the current crop of smartphone platforms, cheaper hardware and GPS chipsets, faster mobile data networks, and software distribution mechanisms that have allowed for this to come true. These relatively recent innovations along with the trickle down effect of technology globally will allow for most people within the next five years to have the same features on their phones as a current iPhone 3G to rely on the mobile web/apps for a growing % of their web needs.

So how does this relate to the original question on ‘How are mobile apps/services going to make money?’

Like I mentioned before, the mobile device is uniquely adapted to allow us to interact with the web in a way that PCs cannot. This has value above and beyond what has been captured to date with web services that have been simply ‘mobilized’. I truly believe that the next generation of great and valuable companies will start from within the mobile web and leverage the advantages that mobile platforms have over PCs in delivering value to enterprises and consumers on the go as well as addressing the increasing population of users whose only method of access to the internet is through their mobile device. Whilst I can’t predict the future to tell you which apps/service are going to be the beacons of success, I am confident new services and products will spawn over the next few years which will take advantage of the mobile’s limitations and features to deliver value above and beyond today’s somewhat mobile-less internet services.

Just for fun, I’ve included a few videos below of some company‚Äôs views on the future.

DoCoMo’s vision of the future:

Nokia’s vision of the future:

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