Some of the leading wireless analysts issued reports this week, covering everything from revenue projected from the combination of mobile, social and local, to the size of the app business in 2011 and beyond.
First, a look at what Forrester thinks (views I was privileged to hear first-hand from mobile consumer expert Julie Ask during a private mobile marketing summit near San Francisco, where I also had the opportunity to present my views).
Julie gave us the inside track on Forrester’s 2011 mobile trends. A point that stands out: the mobile/social/local combo will explode in usage but generate little revenue because price drops will put smartphones in the hands of more consumers. The assumption is that new smartphone users will likely be less engaged and active than the wave of early-adopters who have embraced Android and iPhone devices.
And the apps vs. mobile Internet debate will occupy the industry for a while to come — even though it’s totally off the mark to pose the question in the first place. Put another way, it isn’t a question of either/or. It’s both.
Apps and Web will coexist and marketers will adapt. In fact, the mobile marketing spend is forecast to grow significantly and surpass $1 billion in the U.S. as consumers make browsing, shopping and buying via mobile a more integral part of their daily lives.
Other trends and developments Forrester says that we can expect:
- mobile will continue to bridge the gap between the digital and physical worlds;
- the buzz around 4G will vastly outweigh the actual impact these new networks have;
- cool is ok, but companies will invest first in convenient services for customers and acquisition will come second;
- and, finally, casual gaming will continue to lead the mobile charge for content companies.
HOW I SEE IT: These are predictions we should consider. However, what was even more interesting to me was Julie’s forecast that our mobile devices will become the way we sense (and make sense of) the world around us. Mobile devices (and the sensors built into them) will be able to glean enough information from our surroundings (and our context) to actually influence them. For example, a mobile device might not only sense temperature; it might use this information to regulate the temperature of the room we’re in on our behalf. While all this is technically possible, I have to wonder how many mobile subscribers will actually want their mobile devices to monitor and record the details of their lives. In my view, it will likely go the way of check-ins via location-based marketing. Consumers will allow mobile to know this information provided they get something of value in return.
Is anyone really making money in the new App Economy? This question came up during the same private briefing.
According to Gartner, more than $15 billion in revenues will be generated in 2011 by people downloading more than 17 billion apps.
As quoted in MocoNews, Gartner reports that 17.1 billion downloads for 2011 works out to a growth rate of 117 percent compared to 8.2 billion downloads in 2010. Collectively, we will have downloaded an astounding 185 billion apps by 2014.
Gartner pointed out that Apple made $250 million in gross commission from apps in the second half of 2010, but Apple’s total revenue was almost twenty times that. So we know Apple isn’t bent on getting rich from apps. Still, app downloads (and the money they generate) are at an all-time high, with revenues for 2011 representing growth of more than 190 percent on 2010 revenues (which totaled $5.2 billion) and growth of over 1,000 percent between 2010 and 2014.
HOW I SEE IT: The questions raised during this private briefing focused sharply on the winners and losers in the app space. But it isn’t that cut and dried. In my opinion, a successful app should lead to product and company loyalty. I told attendees there that building a loyalty club off an app is an avenue to additional sales and new product trial. It’s a strategy I’m convinced is on the money (and this is backed up by some recent survey findings.) In any case, we as marketers have to do more to prove return on investment when it comes to apps.
Another week and another rumor about the impending arrival of a Facebook phone.
The Boy Genius, known for sneak peeks and scoops, tells us that a focus group was held recently to discuss features of a Facebook phone. What were the must-have functions? They include location-aware coupons, an always-on GPS service to provide automatic “check-ins” (and share your location with friends), a built-in camera and a news ticker-style message notification system.
The Boy Genius reported that while the device the focus grouped was asked to consider wasn’t specifically referred to as a “Facebook phone,” an hour was nonetheless spent talking about social media. And other questions got down to business inquiring just how many photos members of the focus group upload to Facebook a day.
HOW I SEE IT: In my last column, I dissected Facebook’s strategy to introduce an improved feature phone app in an attempt to grow from 200 million mobile users to 500 million. A Facebook phone – one designed from the ground up to fit with Facebook’s services and intentions — would certainly be another element in the company’s efforts to increase its reach big time. And it would definitely serve to increase Facebook margins on mobile. What should marketers do? Watch this space carefully. Soon it may not be enough to say that you have a Facebook strategy. You’ll need to figure out how to target Facebook users where they really are (and where it matters most): on their app, on a mobile website or on a phone of their choice.
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A career author and sought-after speaker, Jeff Hasen builds, strengthens and protects brands. Companies benefiting from his talents have landed on Wired’s list of most innovative entities on Earth and been named pioneers and the early leader in the burgeoning mobile marketing category. Jeff co-created the certification program for the Mobile Marketing Association (MMA). He is one of only two individuals certified by the MMA to train professionals and students on mobile marketing definitions, techniques and benefits. At Hipcricket, he conceived and led the execution of an accelerated rebranding effort in advance of the mobile marketing software and services company being named “the early leader in the mobile marketing space in the U.S.” by Frost and Sullivan. Hipcricket also won consecutive annual pioneer awards from CTIA — The Wireless Association. Follow Jeff on Twitter (@jeffhasen).