In brief:

The avalanche of apps and app stores (nearly 70, according to WIP Connector) turns up the pressure on developers and other ecosystem parties to find ways to make money selling apps. How are apps discovered and promoted? And more importantly, how are these app emporiums and boutiques going to handle the simple CRM to encourage the all-important return purchase?

After all, it wasn’t so long ago that a study from Pinch Media, which analyzed over 30 million downloads from Apple’s App Store, reported that just 30 percent of people who buy an iPhone application actually use it the day after it was purchased. And the numbers plunge from there: after 20 days, less than 5 percent of those who downloaded an application are actively using it.

A lot of open questions. But one thing for certain: competitive differentiation is in the business model. And we know from the findings of a recent Netsize Mobile Trends Survey of +1,000 professionals and practitioners that the 4-Cs (Convenience, Compatibility, Choice and Charging) are key requirements for a winning app store (and so for the developers that hope to make a living selling their apps). Netsize is gearing up to release new (unpublished) survey results and a new report that reveals attitudes toward business models and what will enable real and significant app sales. Watch this space!

MAXIS, ONDEEGO & AMDOCS

What is the app store landscape and what are the monetization models?

This was also the topic at Mobile Web & Apps World Forum, a CTIA partner event organized by my esteemed colleague Ajit Jaokar. (Again, I congratulate Ajit on organizing a standing-room-only event dedicated to answering the tough questions around app fragmentation, monetization and how to make it all work. Thanks also for inviting me to speak during the SuperSession looking at mobile advertising and in-app opportunity moderated by mobile authority Chetan Sharma. It was an excellent session with Joe Lally from MTV Networks and Jerry Rocha from Nielsen and Gary Schwartz, CEO of Impact Mobile, and one that provides a great deal of material for future MSG analysis and follow-up.)

However, it was the session on personalization and content discovery, presented by Mike Lurye, Amdocs Interactive, Director of Product Marketing, that got people thinking about the business value of granular subscriber intelligence (anonymized) and ways it can be used to get consumers to the content they will appreciate and without making them search for it. To drive home the point Mike didn’t use marketing-speak. He used case studies from mobile operators in the U.S., Europe and Asia Pacific. (You can download all the speaker presentations here.)

I used the opportunity of our in-person meeting to discuss the larger issues around app store marketing and pick up on a fascinating conversation we had weeks earlier (in preparation for Mobile Monday Austria) delving into the tough choices facing developers.

Certainly, developers can jockey for position in the Apple App Store (and others), where getting featured (placed where people can find you easily) is the only way to build a business. But developers can also align themselves with retailers/operators that seek differentiation through innovative business models emphasizing customer service, easy discovery or local culture.

The latter works for Malaysian mobile operator Maxis. I am a great admirer of the carrier’s app store focus and mission: “to nurture and foster interesting developer applications for our community.” (This and more in this must-see video interview with Nava Wathan, Director 1Maxis, Maxis Communications.) Maxis has become the place to go for “something that is Malaysian.” Surely, many more mobile operators can pursue a similar strategy to stand out from the crowd (and build a successful business for their business ecosystems of developers and customers).

At the other end of the spectrum, Ondeego also “gets” it. It launched AppCentral, a mobile app store for the enterprise last fall becoming the first mobile application store meeting the unique needs of the enterprise workers and their IT departments. For enterprise employees a one-stop shop means that they can select what they need (serious apps) to do their job. For developers it means a channel to a difficult to access market and a chance to sell their productivity and enterprise apps direct to professionals who will likely buy.

PODCAST INTERVIEW WITH MIKE LURYE

First, credit where credit is due here. Although people have tweeted about the simplicity and originality of my views on the evolution of the app landscape and the marketing strategies that will help everyone make money, it was Mike who came up with the popular Supermarkets/Farmers Markets analogy.

I caught up with Mike in-person following the Web & Apps World Forum event to talk about marketplaces and ideal models for making money – now.

Here an excerpt:

APP STORES & STOREFRONTS: “The main difference between an app store and a traditional digital commerce storefront is actually not that it sells apps, but that it is based on a certain business model that’s been pioneered by Apple. Stores selling apps have been around for a very long time but Apple changed the game because they set up a business model that opened up the opportunity to get to market for a much broader range of developers and they did so by establishing very straightforward business terms that are the same for everybody.” But not all app stores must sell apps. China Mobile, for example, sells traditional digital merchandise (ringtones and wallpapers and so on) on the storefront they call their app store.

MAXIS MODEL: This mobile operator has cleverly defined the segment it will go after: the local population and local developers. “So, their store is never going to be very big, they acknowledge that. They are not trying to compete, they are trying to co-exist….This is a good strategy because when you know your customer and when you know what you want to offer to your customer that is valuable to them, and you know who is going to build it which is a local developer community, you are poised for success.”

FARMERS MARKETS: The close customer relationship is what makes a farmers market special. And mobile operators have a close customer relationship they can build on – if they recognize their real role. “The owner of the farmers’ market doesn’t get in between [the] transaction…There is a direct [customer] relationship and the owner of the farmers’ market acts as a facilitator. They make it work.” How? Through payment services, personalization insights and scale.

CALIFORNIA GOLD RUSH: If you are about to pack, think again because it may have peaked. Apple found gold in apps and now everybody is moving to California (literally). “Now, guess what, not everybody who came to California at the time of gold rush became rich, some people did, but most actually didn’t, so that is what is going on right now. Everybody and their brother wants to have an app store; some people have a well thought out strategy. Maxis is an example of that. Some people are doing essentially a ‘me-too’ kind of a thing, and there is actually nothing wrong with that in principle as long as you realize that that’s what you’re doing.”

WHITE LABEL: Mike says it’s a low-risk model. The not-so-good news: it’s unlikely to build subscriber loyalty. “There is no leverage of the operator’s unique capabilities, there is no more value for the subscriber to purchase an application in that app store versus the original app store from the white label supplier themselves. There might be some cost advantage…but fundamentally it’s not a model that will differentiate the operator.

TAKE A PAGE FROM AMAZON: Personalization has made Amazon a success. “This is the business they are in: the business of personalization. They are offering it now as a platform to others. You do that search, you bring results not only from Amazon, but [also] from Amazon’s competitors and that’s OK by Amazon because they build such a sophisticated platform that now empowers [the] ecosystem.
***
MY TAKE: Are we on the brink of new business models or is history repeating itself? And — even if it is very much a repeat of the mobile portals – what will guarantee success for the developers and retailers this time around? At the moment, developers have a handful of choices: boost word-of-mouth promotion (tough and tedious, which is why Mob4Hire’s peer app recommendation is an interesting one to watch), mobile advertising (complicated and unpredictable, which is why we are all searching for better ways to deliver the right advertising to the right demographic) and placement (tricky and transient, which is why GetJar has cleverly created a model where developers pay for shelf space). What role will personalization play (even in a pre-paid environment)? My ongoing research into recommenders brings me together with mobile operators already wringing value out of granular analytics to help people discover content they’ll likely appreciate. A prime example is Hong Kong’s CSL, an operator I showcase in my upcoming report, that has harnessed personalization to support My Net, its own (branded) mobile Internet service. Clearly, personalization is moving up the business agenda (as it should) because it’s a way mobile operators can generate revenues (helping people find and buy what they want) and stay in the game.

* * *

LISTEN TO THE PODCAST HERE: [13:00]

Disclaimer: Netsize is an MSG supporter. Amdocs is not an MSG supporter.  However, ChangingWorlds, a company acquired by Amdocs, has published a by-lined thought leadership column series on  MSG. Peggy Anne Salz has also spoken at invitation-only  thought leadership events organized by Amdocs for its operator clients.

I outline the key data points and takeaways further down in this post.

But the real story is the insights the report gives us into winning players and strategies (that is, who will be selling the most and how).

APP DISTRIBUTION AND APP STORE PROLIFERATION

Chetan documents a real and gradual shift from on-deck stores (translated: mobile operator offerings) to off-deck plays that are primarily DD2C (Developer Direct 2 Consumer) – potentially the toughest kind of sales pitch for developers more adept in tech than marketing.

Indeed, developers are going to need some help with that. Little wonder that Patrick Mork, GetJar VP Marketing, singles out app payment and in-app advertising and reveals these are the next features/functionality in the GetJar pipeline. (Smart! It’s all about making it easier for developers to make money from their apps).

And then there are the regional differences that Chetan has expertly uncovered.

Particularly in emerging markets, the mobile apps- mobile advertising business ecosystem has become robust enough to provide developers added revenue. It’s a big business if we consider that Asia, with the lowest pre-paid subscriber rates, also accounted for 37 percent of global downloads.

Overall, Chetan estimates advertising based revenue accounted for about 12 percent of the overall revenue, but that figure is projected to rise to 28 percent by 2012.

Finally, the report confirms two observations that run through my own research and writing like a leit motif: the business imperative to improve content discovery and the potential for a Long Tail of app stores (not just an “app for that” – but an app store for that!).

Farmers Markets and Supermarkets? I’ll have more on that scenario later this week when I catch up with Mike Lurye, Director, Product Marketing, Amdocs Interactive, to explore the characteristics (choice, convenience, payment, personalization) that can potentially separate the leaders from the also-rans.

GETJAR PODCAST

But first the highlights from my podcast with GetJar’s Patrick Mork, who was instrumental in guiding the research project from the start. We discussed the report numbers that really stand out and the business model strategies they support.

HYPERLOCAL: Developers will need to adapt their business models to the regions. Direct sale of apps in developing markets versus ad-supported schemes in emerging markets. This divide spells fantastic opportunities in mobile advertising for companies that can tap them. (One reason why GetJar is gearing up to launch a partnership with a major advertising company to enable this scenario everywhere.)

THERE CAN BE ONLY A FEW?: GetJar CEO Ilja Laurs is bullish about the outlook for a fortunate few stores that have the right capabilities mix (GetJar among them. Of course). In his view: “There is no way that this many app stores will survive in the long term and while the value of the global app economy is set to be astoundingly high by 2012, we think only a few app stores will share this revenue.” Why? Patrick puts it down to the virtual nature of commerce in an app store. “In a virtual economy such as the app economy retail is different and you don’t need that many players.” The selling point is relevant content and app stores that have this – and consumer traffic – are in the winners’ circle. Another reason why only a few may survive: “Developers have finite resources…. They are resource-starved and will therefore only work with a few app stores because they won’t have the time or energy to work with many of them.” (After all, he adds, it can be a pain and drain to open accounts with multiple stores, connect to the back-end systems and upload the content. “Our value proposition continues to be that GetJar is a one-stop to upload it in one place.)

APP SHORTCUTS PAY-OFF: Patrick and I finally got the chance to discuss the runaway success of app shortcuts, literally shortcuts to mobile websites. Put simply, brands and content companies can promote their mobile website as if it was an app(!) Before you dismiss it, consider this: Facebook counts a whopping 45 million downloads of site shortcuts via GetJar. That number beats their iPhone app downloads by a mile!

Listen to the podcast here. [15:32]

My take: The app economy has officially arrived. In 2009, app downloads worldwide were approx. 7 billion with Asia accounting for a whopping 37 percent of the total. Total downloads are forecast to skyrocket to almost 50 billion in 2012 – a year on year growth rate of 92 percent. This would mean that the value of apps sold would be greater than the value of CDs sold in 2012 ($13.83 billion). But we shouldn’t break out the champagne just yet. The business models are unclear, the market is fragmented and real success is linked inextricably to local and regional market conditions. The hard truth: It’s not a single market and one-size-fits all app schemes won’t deliver. Will app stores be on-deck (operator managed) or off-deck (direct-2-consumer)? Or will there be hybrids? Will the prevailing model be paid apps or ad-supported apps? Or will it be a mix? I’m not avoiding the question when I say ‘all of the above’ and everything in-between. Chetan’s report paints a buoyant picture of a young market (“the proliferation of apps in many directions”) and hints at the key capabilities that will clinch the deal for app stores and there developers.

The bottom line: We need more engaging and creative approaches to mobile advertising in those markets where this model will rule (emerging markets). And we need the various channels of mobile advertising (messaging, Web, search and coupons/barcodes) to work together more tightly. Finally, content discovery is an issue the industry must recognize and solve.

In closing a positive – and possible –scenario (from Chetan) if we get this right: “Connectivity breeds apps. It is a given that as consumer electronic devices become wirelessly connected, consumers are looking to download apps on those platforms. Apps download on the iPod have been every bit of a success as they have been on the iPhone. Similarly, we will see a significant uptick in the apps for devices such as the iPad, telematics platforms in vehicles, digital cameras, navigation devices, picture frames, weight scales, and the list goes on and on. These apps will entertain and amuse consumers, analyze data on the devices, connect users with content and friends, and will interconnect various end-points in the pervasive mobile ecosystem in a much more profound manner.” It’s shaping up to be a great space indeed!

The bottom line: Finally Google reveals the terms that deliver results in mobile search. But mobile search usage is still lagging, no doubt due to a laundry-list of universal shortcomings MSearchGroove has analyzed in this recent post. The new Google Keywords Tool is good news for marketers and publishers, but another proof that mobile search as a service has a way to go. Peggy adds: Or does it simply underline the pivotal importance of content discovery – not mobile search – as a primary means to explore the wealth of content at our finger tips and find what we are likely to appreciate?

***

MORE THAN HALF OF INDIAN COLLEGE STUDENTS USE THE MOBILE WEB, says a new survey from Indian mobile ad firm InMobi, and a third of the students engage with brands that advertise online. The students’ favorite sites to visit on their mobile devices are search engines, news sites and social networks, and the company says that mobile internet usage is spread across a multitude of income groups. Source

The bottom line: More evidence pointing to the popularity of the mobile internet in emerging markets, and the ability of mobile ads to reach consumers there.

***

MOBILE APP STORE SALES WILL HIT $4.2 BILLION IN 2013 in the US alone, says a new report from the Yankee Group. It calls the sales growth, along with a quadrupling of US smartphone users to 160 million, a “gold rush”. The firm also offers some advice to developers: they say those with consumer apps should focus on BlackBerry, while enterprise developers should focus on the iPhone and Android platforms, because of the lack of those types of apps for each respective platform. They also add that pricing and marketing are important considerations for success.

The company says that one out of four downloads in 2013 will be for paid apps, and predicts an average price then of $2.37. It also puts the value of this year’s US download market at $343 million. Source

The bottom line: This is a very bullish prediction, without a doubt. The 160 million smartphone figure is pretty brazen and clearly based on the belief that most devices sold over the next four years in the US will be smartphones. The advice about choosing platforms seems a little odd, considering that to drive downloads and sales, developers may be better off going where the users they want to target are.

—–

ONE OUT OF FOUR PEOPLE INTENDING TO MAKE A PURCHASE IN MOBILE OPERATORS’ SHOPS LEAVE WITHOUT BUYING, according to a new report from Amdocs. The company says that retailers could save half of those lost sales opportunities by improving the customer experience (and, of course, Amdocs has a solution for that — you didn’t think it was just sharing this info for fun, right?). It cites the main reasons for the lost sales as an inability to get a device right away, the inability to get the “touch and feel” of a device before buying, and a lack of experts to consult about devices’ features. Source

The bottom line: The reasons Amdocs sites as barriers to purchase all ring true — and combined with the general unpleasantness of many operator retail outlets thanks to long lines, dummy devices, and other factors, it’s not hard to see why many would-be buyers end up frustrated.

***

CONSUMERS WILL DRIVE MOBILE HEALTH SERVICES FORWARD, NOT COMMERCIAL PRODUCTS, says the analyst firm Berg Insight. Remote medical monitoring and diagnostics have been hyped for quite some time, but the applications and devices have been slow to emerge. The firm suggests instead that it’s consumer applications, such as smartphone apps and networked personal medical devices, that will lead the way. Source

The bottom line: The personal, always-on, always-with-us nature of mobile devices makes them perfect for medical applications, while their growing functionality makes them ever more useful in this area. In addition, software apps promise to deliver many of the benefits of dedicated mobile hardware at a lower price to consumers.

***

65 PERCENT OF APP DOWNLOADERS ARE MALES AGED 18-34, says GetJar. This demographic is prized by many marketers, even though they often find it difficult to reach, suggesting that apps are a great way to do so. 81 percent of all downloaders were male, while almost two-thirds of them download apps 3-4 times a week. GetJar’s research also found that 72 percent of its app downloaders use the mobile internet more than the internet on PCs — and this isn’t just limited to emerging markets, with 62 percent of US GetJar users and 69 percent of UK ones agreeing. Source

The bottom line: It’s clear that GetJar has some seriously dedicated users, who could serve as a useful bellwether for the overall apps market. It’s not too surprising to see the young male dominance — but also suggests that developers and app stores may not be doing a great job of reaching other demographics.

It was great to have the last few days off and even better to map out an exciting line-up of MSearchGroove projects for the next few months. One that I am particularly honored to announce: my collaboration with GigaOM Pro, the new research arm of the highly respected tech blog GigaOM. By way of background, GigaOM Pro has brought together an impressive roster of industry authorities and analysts (including my esteemed colleague Chetan Sharma) to “address the gap that exists in real-time expert industry analysis on emerging technology markets.” The GigaOM Pro solution: Make timely, highly relevant analysis and insights accessible and practical.

I’m on board to write an in-depth examination of personalization and recommendation technologies and business models, a natural next step given my long track record analyzing mobile search and my deep involvement in the recommender space. (This includes work with Strands, a major provider of recommender systems, on recommender industry events including RecSys 09 – October 22-25, NYC.)

The report is an ambitious undertaking and I am naturally interested in connecting with personalization/recommendation companies –so please contact me directly if you wish to be considered for inclusion. peggy@msearchgroove.com

Why the buzz about personalization?

The advance of Internet-specific smartphones and the spread of app store schemes turns up the pressure on mobile operators (and their content providers) to decipher data transactions (on and off the network), combine it with location and demographic data and use the results to create a 360-degree view of the individual.

Where does this shift leave mobile operators?

They are hard pushed to turn analytics into competitive advantage. Sensing this business opportunity (that execs tell me they estimate hovers in the hundreds of millions of dollars), a slew of companies (such as Amdocs, Bytemobile, Novarra and Qualcomm) are among the first out the gates with revamped offers to arm operators for the ultimate battle with Web giants for the mobile customer. This special series profiles the players jockeying for position in the marketplace.

This week we look at Openwave, which has recently productized its existing analytics capabilities and business intelligence know-how, and packaged it up as Mobile Analytics.

The solution – designed to aggregate usage data and behavioral information across a variety of sources, including on-portal surfing and open Web browsing, to generate meaningful reports –dovetails with other Openwave offers (behavioral targeting, profiling, usage pattern analysis) to lay the groundwork for the delivery of relevant content and advertising.

I caught up with Mayur Pitamber, Openwave Product Management Strategist, to discuss the role of the mobile operator, debate the value of personalization and what we can expect next in the Openwave product roadmap.

AN EXCERPT OF OUR Q&A

Q: Let’s talk about the fit with mobile advertising. You have just launched the complement to your own mobile advertising solution, which is Mobile Analytics. What’s the level of interest in mobile advertising? I’m hearing some operators get it, but many more don’t…

A: There was some hype about it at first, but operators are starting to see the value of it now and they are also beginning to understand the real value of the data they have. The last months have been marked by a surge of activity and RFIs and RFPs specifically for mobile analytics solutions, which is new in this market. We didn’t see this last year.

A lot of what happened and the initial excitement around mobile advertising industry was quite premature. It’s not just about offering targeted advertising; it’s about offering relevant products and services based on the user’s behavior. The operators can use analytics to gain profiles of these users, the sites they frequent and what they do while online. It’s when this information can be aggregated and provided to media agencies and brands that it really becomes valuable.

It’s all about helping operators to provide the mobile audience metrics that the brands are looking for. Not necessarily going through the GSMA, because they have some of that [covered in their] initiative, but doing that directly. With the solution we’re offering the operators can provide those metrics directly to the brands, to the media agencies, to the publishers, and be a vital part of that mobile advertising ecosystem. And with our solution there’s no need for us to insert tracking or cookies or JavaScript, or anything like that. Every Web page goes through our gateway and we can basically track on that. So, that’s a key differentiator.

Q: There are, of course, other solutions in this space. A long list of gateway providers: Qualcomm, Amdocs, Ericsson, Nokia, Bytemobile, Novarra. And the space is getting crowded.

A: Obviously, there are competitors out there.  All gateway providers can provide parts of this sort of solution. However, I haven’t come across a solution [similar to ours] with this [breadth] out there in the market at this point in time. Being a gateway provider for the last 10 years, we’ve been providing this type of reporting to operators. But now we’ve added more features and made it more user-friendly. So, it’s a mature business intelligence product that we’re bringing to the market.

Q: In early August, Telstra announced it had implemented your Mobile Analytics solution. The press release says it’s all about providing Telstra a “dashboard view of intelligent analytics and rich reporting capabilities across its mobile device portfolio.” To start, how many of your operator customers have this solution or perhaps the analytics solutions that preceded this?

A: We have deployed previous versions of this analytic solution to some six tier-1 operators around the world.

Q: Let’s say I’m an operator and I don’t have a solution from Openwave, but I like the analytics.  Can I just have that, or is it a package deal?

A: Previously, the solution was just built around Openwave products. But obviously, we want a bigger market share, so we’ve designed the solution such that it will work with any other gateway, any other vendor of gateway products.

Q: You said before competing on analytics is the way for operators to be “a vital part of the ecosystem.” Can operators really play this central role?

A: That’s a really good question. I think it’s quite difficult to answer as well. The operators have traditionally been sluggish. Their bread and butter has been voice revenues and SMS revenues. To really get them incentivized to offer new services such as mobile advertising, you need a compelling business case. I’ve spoken to dozens of operators around the world. Some of them are in advanced stages of creating any-time mobile advertising organizations. Others have only one or two mobile advertising product managers. For these operators, the business case – for whatever reason – is just not compelling enough for the decision makers to say okay, let’s really invest in this.

Q: This jives with what people told me while I was conducting interviews for Mobile Advertising Research UK. As one executive at a mobile infrastructure company that counts over 300 network operator clients observed: Mobile advertising only becomes interesting for an operator when “the type of revenue they can envisage is around 2 percent of their overall revenue to 5 percent, and with an opportunity to grow to 10 percent of revenue. This is the revenue that will really make them sit up and make it work.” Another figure that stands out: GBP 28.6 million, which is what the IAB reckons was the mobile ad spend in 2008. What’s your take?

A: I can believe the ad spend for the U.K. I think the hold up is the thinking about the role of the mobile operator. We have to be clear about what they can do. In my view, the role of the mobile operator will be to provide incentives for people to use new services so that additional inventory and mediums become available to insert ads. And obviously, once those mediums become available, that becomes attractive to brands and advertisers. But, right now, it’s difficult for operators to manage their inventories. They have SMS inventory, MMS inventory, on-portal, off-portal. All of these are different systems and it’s difficult to provide brands and advertisers a consolidated view of what is available out there. So, it’s when there is a clear view of the different inventories out there and the tools to manage these inventories, and make these inventories available to third-parties such as the brands and media agencies, that I think mobile advertising will really take off.

Q: Are you convinced operators can start acting like media companies? Or are there going to be a lot of carriers that focus on access over audience?

A: The tier-1s I talk with have created organizations to manage mobile advertising. They’ve created sales forces to go out and sell inventory. So, they are already acting as media agencies and helping brands identify which inventory they want to use. But again, these are just the big tier-1 operators.

Q: Advertising is messaging – and loads of it. Or it could borrow from TV and be video-centric? We don’t know. In any case, we have more data usage – both from people surfing with their smartphones and brands that want to reach them. What is the potential impact on the network side of things? What are you seeing?

A: We’re seeing huge increase in data traffic volumes. A data tsunami is going to hit operators within the next 12-24 months. And some operators are quite oblivious to this. So, [with Mobile Analytics] we’re helping the operators to identify trends on the operational front as well. We’re saying ‘Hey, you need to do capacity planning and optimize your networks because this is going to be your traffic in 6 months or 12 months.’

Q: Let’s move to the report on North American mobile Internet trends you issued that may have got lost in the CTIA shuffle. It made some interesting points, and I understand you are about to release another one soon. What were some of the key observations and what were the surprises?

A: That report was basically based on data from one of our customers in North America. Many of the trends we saw confirmed what the market was thinking. For example, everyone is doing social networking on mobile. The top sites, as you could guess, were Facebook and MySpace.

In terms of search, we were able to also track some keywords. Something that was interesting: people – when they wanted to find Google — wouldn’t enter Google on their mobile phone and go to Google. They would actually enter ‘Google’ in a Yahoo search engine. This operator had Yahoo as a search partner. Anyway, that tells us that a lot of search use may be because of usability. It’s easier to type it [a destination] in a search box than to navigate to it on the Web.

Q: Finally – what about app stores? They’re hot. What is the value-add, if any, from analytics?

A: One of the operators we’re working with is in the process of opening an app store. They know that not all users are going to go through the apps. If you figure the iPhone app store has tens of thousands of apps and growing, users would lose patience sifting through all that. This operator wants to analytics specifically on this [operator] app store to identify the top ten apps. But it goes beyond this to include how many times have the apps been downloaded; who has consumed them; and whether the users have shared apps with other people. More importantly, the operator is providing this app store data to the application developers, so they also have insight into how their apps are being used and how many people have downloaded their apps. So, Mobile Analytics can be used to identify the audiences going to these app stores – and that can be used to build the business.

WHAT’S NEXT?

Generally speaking, the value of data is not in the data itself, but in the mashups we create when we combine it with other data stores. Put another way, the way to wring the value out of analytics is to combine it with location and demographics data, which is why Openwave is keen to feature both in its Mobile Analytics solution. Mayur tells me we can expect location in the next months. (Openwave is also gearing up to announce another customer win for its analytics offer in South East Asia.)

Likewise recommendation capabilities are moving up the list to take a center spot in Openwave strategy. As Mayur put it: The next version of Mobile Analytics will come with recommenders “bolted on.” No word yet on what the recommender will allow (delivery of content or advertising – or both?), how it will achieve this (based on item-to-item or user-to user – or both?), or how it will integrate with Openwave’s underlying Integra platform. But read between the lines, and the sharpened focus on recommendation is at least a welcome testament to the timing and importance of my upcoming GigaOM report on the same topic.

Openwave, unlike some of the gateway providers I’ve examined/profiled in this series, is also bullish about mobile search. The company demo points out that Mobile Analytics potentially improves mobile search, allowing operators to deliver relevant results individuals will find useful.

I am reminded at this juncture of a related post I wrote about the potential for operator-centric, operator-powered, operator-controlled mobile search. With the right tools and technology mobile operators can follow our virtual breadcrumb trail to optimize our mobile search (and advertising) experiences, using our actual usage patterns to give us the answers/results we will most likely appreciate.

My take: Personalization is a hot topic but personalized recommendation and search are even hotter. The space is crowding with gateway providers that are using their position in the network to give their operator customers insights into what people are doing on the network (on- and off-portal). The end-game is about helping operators make business decisions based on new subscriber behaviors and trends. Openwave is one of a number of companies in this space – but it has its eye on the prize: drilling down in the data to help operators manage bandwidth allocation, deliver targeted mobile advertising AND fine-tune recommendation and mobile search. What better way for operators to compete against Internet and search engine giants, and potentially win?

Next in the series: We discuss personalization with Novarra.

Since teaming up with Rudy De Waele, blogger at mTrends and  dotopen founder, to develop mobile search case studies in preparation for a workshop on Mobile Search Future Prospects organized by JRC IPTS (Institute for Prospective Technological Studies of the European Commission), and seeing the positive response to our work to date, I’m convinced mobile search is back again at the top of the industry agenda. And with good reason: Search is the de facto interface to all things digital in the online space, and there is every indication that it will be the same in mobile.

From mobile advertising, where our queries trigger the delivery of related advertising (in the best case scenario, we’re not there yet), to social media, where the content we appreciate and discuss across destinations ranging from MySpace to Twitter allows us to restore balance in an otherwise purely algorithmic approach that tends to promote search engine optimized websites over what we find genuinely relevant and useful, mobile search is where the action is.

But as Rudy and I have both pointed out in our recent presentations, mobile search is not about the usual suspects (Google, Yahoo, and Microsoft). Rudy spoke at Next09, and you can find his slides  further on in this post; I spoke at the European Mobile Media Conference, and my deck can likewise be found after the jump.

Indeed, context and personalization change all the rules (!)

A highlight of our recent presentations: A comprehensive overview of the market and (thanks to Rudy) a SWOT analysis of the players that stand out in their category such as Google (universal search with a poor mobile offer and an even weaker grasp of social search), and Twitter (a case of mobile search + social media = real-time results that really reflect what we discuss/share).

In my own mobile search research – an on-going project that began back in 2004/2005 when I wrote the first report on mobile search and content discovery, a 220+ page report published by Informa Telecoms & Media – I have recently identified some 60+ companies and 10+ categories of mobile search I would like to share with you (below) for your feedback.

INTERACE

• Text: ChaCha, 4INFO,MINFO, textperts (acquired by 118118), Answers.com, AnyQuestionAnswered, Ask, AskMeNow
• Voice: Google, Yahoo, Vlingo, Microsoft, ChaCha (Watch this space for an expert assessment of the voice-enabled services offered by Google, Vlingo, and ChaCha. ( I am proud to have had the opportunity to collaborate with Peggy Albright, MSG Associate and founder of Albright Communications, and even prouder of the results.)
• Visual: IQ Engines, Kooaba, Mobile Acuity, Searchme, SnapNow, SnapTell, Tin Eye Mobile, Nokia
• Navigational: Boopsie, kannuu, Nuance (through Tegic acquisition)

ACTIONABLE

• Universal: Google, Yahoo, Microsoft, AOL (based on Google), Medio Systems, JumpTap (although a much stronger focus on mobile advertising)
• Federated: MCN, Motricity (managed mobile search platform providers)
• Operator-centric search: Amdocs, Qualcomm, IBM and this company coming out of stealth mode
• Alternative search: Defined as every service except for Google, and includes a long tail of 1500+ search engines (tracked by AltSearchEngines) with ambitions to go mobile – some sooner than later
• Vertical/content-specific search: abphone, vtap, Truveo
• Local search: Hundreds of players that offer local search via SMS services, on their own WAP sites, and/or as part of a nearby shopping scheme. (Fortunately, the local mobile search landscape is the topic of an upcoming column on MSG from Martin Wilson, founder of Indigo 102, an independent consultancy with a focus on mobile local search and services, so watch this space!)

SOCIAL

• abphone, ChaCha, Hiogi, Taptu
• Twitter in a class by itself!

It’s work in progress, but it’s all the more exciting if we remember that – in mobile search – the players that matter and the business models that deliver are wide open to discussion.

Indeed, the central role of mobile search in a wide variety of mobile services around sharing, advertising, location, and context-aware activities turns up the pressure on an even broader range of businesses (operators, brands, agencies, enablers – everyone!) to understand what mobile search delivers (and doesn’t) and the companies/models that do it best.

To help mobile professionals and practitioners navigate this tough terrain, Rudy and I have joined together on a project to produce the definitive mobile search market overview, a work that will draw from primary research, case studies, and exclusive forecasts to document this exciting space and present our recommendations for strategies to harness growth opportunities on the horizon.

I still have the opportunity to take your views and perspectives into account, and I would welcome your input. The project, widely distributed via our sites and via our network of sites, supporters, and influencers, will also offer a commercial opportunity to companies interested in conveying their value proposition to a growing community of senior executives and decision-makers in the mobile space.

If you are a mobile search company with an interest in being considered for an interview, please contact me directly or send an email to my assistant Andrea Henninge (andrea@msearchgroove.com).

Notice anyone missing? Service providers and mobile operators.

In fact, their absence in this line-up tells us these players are either content to leave it to the handset makers and Internet giants (a first step on a slippery slope to being a dumb pipe perhaps?), or are simply oblivious to the vast arsenal of capabilities at their disposal, capabilities such as customer relationship data, personalization technologies, and location information that allow them to fight back. In my view, if these players could open up to make all the above available to developers (in a standardized, no-brainer way), then they would cover the bases to be much more than just another application store. With their reach and resources, operators and service providers could be the super shopping malls of the mobile Internet.

Last week I explored this in a post that outlined how Qualcomm and its Plaza Mobile Internet platform potentially change all the rules, levelling the playing field and allowing operators and brands to play a central role in this brave new Open Web. This week I’m back with an exclusive look at Amdocs, a company preparing to take the wraps off an application store platform that ups the ante. Thanks to Jessica Francisco, Amdocs account manager at Weber Shandwick for reaching out, and thanks to Idan Carmeli, Business Development Manager, Amdocs Interactive, for giving MSG the inside track on the company’s app store strategy.

Idan’s controversial yet correct observation: Service providers must learn how to leverage third-party developers. “The biggest question that should be on operators’ minds is: How do I convince developers to use me and not any other of the app store channels that are available in the market?”

The answer: Operators must open up and offer their assets – their customer billing relationship, their customer information, their ability to deliver content personalized to customer segments, and their network capabilities – to developers. “Operators know how to sell content and bill for it. Now they have to be open to third-parties and give them the tools they need to sell to their customers.”

An excerpt of our Q&A:

Q: Some call the app store model the killer model. Google et al have app stores in place, what is the impact on off-portal?

A: It accelerates the move to off-portal, which isn’t good news for service providers. But there is another side to this. The increased interest of consumers in finding cool content and apps means it’s a good place for operators to be [in the middle of this exchange] if they can find ways to better monetize this marketplace.  We’re helping service providers create an environment – an ecosystem similar to what we’ve seen from Google and Apple – that leverages their [service provider's] unique assets to bring developers and application providers on board.

A: There is nothing written about your app store platform and offer at this time. What can you tell us about it?

Q: We will be formally launching this new solution [at WC 2009] next week in Barcelona, along with other Amdocs Interactive offerings. The app store is a platform that allows service providers to, on the one hand, provide tools for developer communities to create applications, and, on the other hand, gives them [developers] a channel to present these apps on the content store. So there are two sides: One, a commerce platform and all the enablers on top of the commerce platform that are derived from our acquisition of Qpass that allow developers to create, upload an application to an existing content store, define how much they want to sell it for, sign the contract with the service provider for the revenue share – the works. Two, the tools for developers to actually build applications that aren’t just generic applications because they can access service providers’ services, such as SMS, WAP access and location as well as other available customer information . The aim is to connect all this – in a convenient way — into developer toolkits that are provided by the service providers to the developers to help them build applications they can later sell through the [service provider's] app store channel.

Q: Does the application store come with apps to start? Or do you help service providers populate it with apps so they have something to sell from the get-go?

A; As part of Amdocs, we have our own framework in place for working with third parties in the mobile start-up arena and we have a framework for building relationships and creating a channel between the start-up community and the innovator community on behalf of our customers.  So, we can leverage these relationships and all these start-ups that are part of our program in order to populate an app store. It’s not the focus of our solution, but we can facilitate this.

Q: So you offer the nuts and bolts for an app store. But I also know that you have mobile search and personalization capabilities – through ChangingWorlds, for example – that could potentially make this a self-learning storefront…

A: Definitely. Our ultimate vision for everything we do in Amdocs Interactive is to bring to market solutions that leverage all our assets. So eventually we will want to embed relevant capabilities in our app store solution. For example, we recognize that personalizing the app store experience for the consumer is an important value-add for both the developer and the consumer as it solves the relevancy issue that’s causing real pains for third-party developers on other mobile platforms.

Q: In other words, developers might pay a premium to content providers for the ability to target individual consumers? What would the deal look like?

A: It would be the service provider saying to the developer ‘you have this app that certain consumers are more likely to appreciate than others, so let’s make a deal and I’ll make sure the apps consumers see are the ones most relevant. Something like that could be reflected as a premium in the revenue share model between the service provider and the application provider. But first service providers should get where they want to go, and that is being able to launch an app store as quickly as possible because nobody is waiting for them.

Q: A devil’s advocate question here: What is the USP of an app store run by a service provider? Apple and Google have a lot of mindshare already…

A: When opening up to third-parties, service providers  actually create an edge for themselves by creating an edge for their partners. Our app store is not just a content store, but  an end-to-end process and a set of tools for developers that allows them to offer apps to users in a way that they find compelling because they are personalized, or location-aware, or indicate presence, or simply build on the history of the consumer relationship because the developer has access to this data. That’s an edge Google can’t provide its developers.

Of course, the sharing of customer data would take place in a secure and controlled fashion because these are big issues. And let’s not forget reach. If I’m making a choice to develop something, say, for the Palm Pre platform, , I had to take into account it’s not that big a platform yet in terms of how many users are using that. But if I go to AT&T, I have a subscriber base of upwards of 70 million customers. This is scale the service provider needs to learn how to leverage and offer to third-party developers.

Q: Let’s talk about some business basics. What is the monetization model and where does mobile advertising fit in?

A: The basic monetization scheme is the revenue share from the download of the application.  On top of that the mobile operator can charge for the value-ads we identified, such as placement on the store, perhaps boosted by mobile advertising across the network, as well as access to personalization information. It’s easy to imagine a number of models. In one scenario, it’s an 80/20 split in favour of the developer for the basic upload and distribution through the store. But the operator could take 25 percent for better placement, or 30 percent for better personalization. Lots of business models are possible.

It all comes back to the core assets. Once service providers can make it easy for developers to do business with them, then there’s basically no one better placed than a mobile operator to monetize these apps. They know their customer base better than anyone, and that includes Facebook, Google and even Apple.

Q: What about the developer? What capabilities do you offer them to help monetize their apps? I could imagine top of the list would be mobile analytics and some visibility into sales and mobile advertising campaigns…

A: Definitely. In fact, in the very first concept mock-up that we developed for our product, the most prominent feature on the developer profile page – the page where the developer manages himself — is a dashboard of revenue and usage performance for his applications.  For us, this is an important piece of what the service provider needs to offer developers so they’ll come to their [service providers'] platform.

Q: What about mobile search? A gripe I hear is that people can’t find the apps they want. You have mobile search within Amdocs, are you going to use it to make shipping in your app store less of a chore?

A: Yes, search is absolutely part of our roadmap – that and our personalization capabilities will be part of the app store.  But there is more than that: Amdocs is also an established BSS player and systems integrator,  and we’re priming our solution to best leverage the differentiation potential of the customer data, the customer billing and the business intelligence that’s coming from the BSS.

Q: What about the marketing and the branding? Is it powered by Amdocs? And who gets the developers on board? Amdocs or the operators?

A: Good questions. I think we’re going to collaborate with our customers on this. In the case of making sure that everyone hears about their (service providers’] app platform, it’s ultimately going to be the responsibility of our customers to communicate the app store and why it’s a good proposition.

Q: A big picture question: Is it too late for mobile operators to join that app party? I mean we already have Apple, Google, all the big names…

A: We’re seeing increased interest from our customers because they realize they have to be in on this. They have to be on that train before it leaves the station.

Q: It hasn’t left already?

A: Everybody else is announcing app stores.  Any service provider that goes to the market now, it’s not going to be the first; it’s not going to be the second. But any service provider that enters the market now will need to offer an app store. It’s table stakes.

It’s all about the future of the mobile industry. It’s time [for service providers] to seriously bring partners into their business. That’s that bigger issue at play here. If you look at other examples, such as Amazon in the retail industry, it gets this. It’s a retailer with an online store. But with its Amazon Web Services offering, it’s suddenly become more than that. Now you can ask yourself: What does a retailer have to do with providing computing services to developers and application providers?  It’s only when you dig a little bit into that that you realize that if you want to make sure that your business keeps growing and expanding and capitalizing on 100 percent of the opportunities that you have, then you have to learn how to work with partners in the best way possible.

My take: I am reminded here of The Keystone Advantage: What the New Dynamics of Business Ecosystems Mean for Strategy, Innovation, and Sustainability, a must-read business book by Marco Iansiti, the David Sarnoff Professor of Business Administration at Harvard Business School. In it he points out that scale, once an expression of internal operational and innovative capabilities, is fast becoming a measure of external resources and reach. Put simply, size is about “exerting influence over vast networks of companies and managing assets you don’t own.” All the big names – Microsoft, Google, Nokia, eBay and Amazon – are giants because they pursue a kind of keystone strategy that not only aggressively furthers their own interests but also promotes their ecosystems’ overall health. They have become undisputed market leaders because they appreciated the positive impact their platforms could have on their business ecosystems – and took steps to help other businesses in their ecosystem achieve high performance. This in turn has paved the way for sustainable results over decades.

Mobile operators should borrow a page from this winning strategy and leverage the broad range of content and capabilities available in their business ecosystems to improve the end user experience. Concretely, mobile operators should create platforms in the form of services, tools, or technologies and allow other members of the mobile content and services ecosystem free access.

With companies such as Amdocs and Qualcomm lining up to do just this -in the case of Qualcomm, it’s initially more about widgets -  it’s clear that Google, Apple, Nokia, Samsung, Microsoft and Handango (RIM) could get some serious company. We don’t have implementations yet – but we do have platforms that cover the bases to help operators gain a competitive position in the center of this value Web (NOT chain – that’s old school thinking)…

But the news today is the acquisition of ChangingWorlds by Amdocs, a company that has quietly and cleverly added capabilities that build on its billing expertise to deliver the right content to the right user in the right context. As I observed in this earlier analysis of Amdocs, the company isn’t there yet (no one is), but they have correctly placed personalization and relevancy at the core of their competitive strategy. The decision to acquire all of ChangingWorlds’ shares for $60 million in cash is a brilliant move – and one that makes Amdocs the one to watch.

A larger trend at play here is the run on personalization companies. Think of Qualcomm snapping up Xiam, a company specialized in personalization and recommendation technology. Go further back, and you might recall Real Networks acquired Sony Network Services (a company that had perfected personalization to stream mobile music according to your mood), or that Microsoft-owned FAST also bought AgentArts, a personalization and recommendation company based in Australia. And the list goes on…

In fact, my standard PowerPoint presentation, which I have presented at several mobile search seminars and a recent master class in London, contains a slide explaining the pivotal importance of recommendation and personalization (aptly titled Was it good for you too?) which also recounts the recent raft of M&A that has transformed the space.

Personalization companies are hot – and with good reason. If the end-game is about delivering advertising, apps, content and even search results that I am likely to find both genuinely useful and interesting, then technology provided by the likes of ChangingWorlds, Xiam and others I have high on my radar is crucial. (It’s all about relevancy here, but frequent exchanges with Ogilvy’s mobile advertising evangelist Jonathan MacDonald have broken me of the habit of using the term too loosely. Read his rant and you’ll understand why.)

Connect the dots and Amdocs’ acquisition, coming on the heels of a strategic decision to bundle its search and advertising capabilities in one division, is on the money.

By way of background, ChangingWorlds, an Irish provider of personalization technology, is best known for its ClixSmart platform. Designed to provide individual consumers with “proactive recommendation of content based on their preferences and context,” the platform has been deployed by 50+ mobile operators around the world.

(In a nutshell, ChangingWorlds’ ClixSmart platform includes a variety of solutions in areas such as content recommendation, mobile search and mobile advertising. Sitting at the core of this platform – and taking center stage in all ChangingWorlds does – is a profiling and personalization engine that is capable of capturing subscriber intelligence by automatically monitoring the implicit behavior of how users use and navigate the mobile Web.)

As Barry explained it to me a while back, the combination allows ChangingWorlds to create richer preference profiles and combine this profile information with external sources of complementary data – ranging from user demographics to mobile billing records. (Little wonder billing giant Amdocs snapped it up.)

And let’s not forget the recent tie-up with Sprint Nextel in the U.S., which sees the mobile operator launching ChangingWorlds’ ClixSmart technology both on the carrier’s own portal, Sprint Web, as well as providing advanced personalization solutions for a number of Sprint’s cable partners and wireless wholesale customers. (I was scheduled for a podcast with Sprint and ChangingWorlds’ CEO David Moran to get the inside track on this deal, but I can imagine this project is on hold indefinitely.)

Nonetheless, we get an idea of the use case from Kevin Packingham, senior vice president of product and technology development for Sprint, in a recent press statement. In his view, the aim of the deal is to “automatically learn what content the customer likes and put it on their homepage,” thus enabling Sprint customers to access genuinely useful content they will most likely appreciate. In this scenario, ChangingWorlds’ ClixSmart solution automatically generates personalized, dynamic content teasers that enrich the user experience of Sprint Web and stimulate increased click-through. ClixSmart teasers, which include text and images, are rotated dynamically and personalized according to the ClixSmart user profile to provide a compelling and relevant user experience designed to encourage Sprint Web users into using more mobile data.

ChangingWorlds and Amdocs share several customers including Sprint, the Vodafone Group and Telefonica O2.

During a recent industry event, David told me the company was preparing to broaden its focus beyond mobile operators and content companies to address the wider opportunities around content discovery such as voice-activated content portals, online destinations and electronic program guides for digital television. This is no doubt attractive to Amdocs, which has its eye on the bigger prize: Personalized and converged services.

I just this minute saw an email from Jessica Francisco, Account Executive, Weber Shandwick, with the news that James Patmore, Vice President of Amdocs Advertising, Content and Entertainment division, is available to speak with me later today and discuss the growing importance of mobile personalization. I’m excited about the opportunity and will have more after the call. Thanks for the prompt response Jessica!

BTW: MSG is still setting up a few features including a search box – so apologies that you can’t find the reports on Xiam and others easily. But be patient – we’re on it.