The media and blogosphere reaction to Apple Music was mixed at best. Bob Lefsetz, who has written about the music business for over 25 years, says: It’s toast. Bob is making a very common mistake: He assumes that Apple Music is a product aiming to win market share in the existing music streaming market. Bob’s focus is then on how Apple Music’s features and pricing compare with the competition. Apple Music provides nothing new other than a live radio service, which is mildly interesting, but never forget that iTunes Radio didn’t put a dent in Pandora. Spotify and Pandora are services designed to resell music in the existing market structure. [tweetable]Apple Music is a platform designed to create a new market and reshape the music value chain[/tweetable]. The business model playbook is similar to how Google created a new market for small advertisers, Amazon Kindle created a new market for independent book writers, iPhone created a new market for app developers, Uber created a new market for drivers, AirBnB created a new market for apartment owners, Incrediblue created a new market for boat owners and Munchery is creating a new market for chefs. The 3 types of innovation Harvard Professor Clayton Christensen explains in “The Capitalist Dilemma” that innovation, comes in three varieties: one is performance-improving (sustaining), another efficiency and a third one market-creating innovation. A new market for music by connecting artists with users Apple Music aims to create a new market for digital music by connecting artists with Apple users. The platform will empower hundreds of thousands of less-known artists and break the walls inherent to the current industry structure. Jimmy Iovine says in his interview to The Guardian: What’s happened to the music industry, from my perspective, is a lot of great music is behind the wall that can’t get through, and therefore a lot of artists are getting discouraged. And we hope that this ecosystem really helps revive that. And we tried to build something that had enough of each thing to build an ecosystem that just feeds off each other, and gives back to an artist. The recipe is strikingly similar to the Apple App Store recipe: Connect app developers with users to create a new market for software and services that surpassed anything we knew before it existed. New business models for music It used to be that the only way to monetise software was to sell licenses to use it. Who says that the only way to monetise music is to sell licences for downloads or collect streaming royalties? As I wrote in “To understand Beats you need to understand Lady Gaga”, the economics of abundance inherent in digital music open new ways to monetise music. Troy Carter, who discovered Gaga and was her manager until November 2013 summed it up nicely in his interview with FastCompany: It was more about building a platform on top of music—because music, we realized, sells everything but music. Will digital music, like apps, become predominantly free? Apps have become a channel to reach and engage users. Will the same thing happen to music? What role will Apple Pay play in this transformation? Time will tell, but Eddie Cue thinks it’s a possibility. In his interview with The Guardian he said: Our viewpoint was very simple: let the artist and label control it. They can put it up on Connect for free if they want to, or they can put it up behind the [subscription] paywall, or they can make it available on the iTunes Store for sale. They’re in control of their music and how they want to distribute it. Don’t repeat Bob Lefsetz’s mistake [tweetable]Apple Music is more than a differently-packaged version of Spotify[/tweetable]. Google AdWords is more than a less-expensive advertising agency, iOS is more than a nicer-looking version of Symbian, Uber is more than a digital version of a Taxicab stand, AirBnB is more than renting mattresses to strangers and Munchery is more than a bigger restaurant kitchen. These are platforms having very different economics from traditional products. As Marshall Van Alstyne said: Platforms beat products every time. Platforms disrupt industry after industry: telecom, computing, watches, automotive, consumer electronics, banking, education, food, transportation, hospitality, healthcare, and more. When you see a new idea in the market or a new competitor, ask yourself: “Is it a market-creating platform?” and “What will it mean for my business if the platform reaches critical mass?”

More and more car makers understand that “digital” will bring profound change to the industry. Audi chairman Rupert Stadler recently said at CES Asia in Shanghai: “We are experiencing a digital revolution that is having a faster and stronger impact than the industrial revolution. This is the new normal. It will not stop.” The challenge, though, is that the industry often sees connected cars as a linear extension of its legacy business model. This reminds me of how Nokia in 2007 saw the iPhone as competition for better phones. The trends – and history – point in a very different direction. The connected car will be a completely different ball game with new competitors and business models. Connectivity opens the car to Internet companies, which create, deliver and capture value in completely new ways. Software already disrupted many industries. Today there are clear signs of how the encounter with the Internet can become a catch 22 for the car industry as well. A smartphone accessory on wheels Car makers are busy adding connectivity to their cars. Software companies take a very different approach – they instead focus on people, “the connected driver”. For software companies it’s not about connecting the driver to the car. It’s about keeping drivers connected to their digital lives through their smartphones. Google’s Android Auto, Apple’s CarPay and numerous startups like Automatic, Carvoyant, Navdy, Vinli, Dash, WayRay, Zubie and many others work to turn the car into a smartphone accessory on wheels. Google’s Fabian Tamp says in the video introducing Android Auto to developers: “Your car is by far the most complicated accessory we’ve ever attached to an Android phone.” On that rare occasion Apple agrees with Google: “The accessory ‘Toyota’ uses an app you do not have installed” The strategy seems to be working pretty well for Google and Apple. Joanna Stern writes in the Wall Street Journal: “After a week cruising around with Android Auto, I’m convinced this is the future of in-dash technology. Taking the software design out of the hands of car makers and putting it in the hands of phone makers should have happened long ago.” Developers: From podcasts to disrupting after-sale services Apple, Google and startups like Automatic and Carvoyant bring proven app paradigms together with legions of developers to the service of the drivers. [tweetable]The goal is to turn the car into a platform allowing startups to experiment with new use cases[/tweetable] and business models. VisionMobile surveyed 4,000+ Internet of Things developers for our IoT Developer and Platform Landscape 2015 report. It turns out that 61% of connected car developers make apps for Google’s Android Auto or plan to do so, versus 50% for Apple’s CarPlay. Compare that with 22% of developers pinning their hopes on the car-maker-friendly MirrorLink platform. [tweetable]These are still the early days of the connected car developer ecosystem[/tweetable]. Developers are still experimenting with a wide range of car-specific use cases: From listening to podcasts, expense reporting and teen driving to trying to disrupt the most lucrative part of the car business – after-sale services. [tweetable]Dealing with repair shops and dealerships is the most annoying part of car ownership experience[/tweetable]. A growing number of startups try to change that with the model of on-demand services, which works so well for Uber. For example, YourMechanic in the US connects car owners with independent certified mechanics in their local neighborhood. The service helps you find the right mechanic at a fair price, pay for parts and services, and get your car fixed conveniently at your home or office. YourMechanic created an app for the Automatic app store that allows the service to collect real-time diagnostic information from your car, making the service much more useful. The writing is on the wall The writing is on the wall for the automotive industry. [tweetable]The connected car, as it turns out, is much more than adding connectivity to cars[/tweetable]. To compete in this new market car makers will need to learn how to think and act as a software company, leaving behind the comfort of their traditional business model. Android Auto, CarPlay, Automatic, Carvoyant and other ecosystems are leading us to the future where the key purchase criterion for the car is not “what the car can do”, but “what you can do while in the car”. This is much like smartphones evolved from “what the phone can do” in the Nokia era to “what you can do with the phone” in the iPhone/Android era. It will be rather unfortunate, but predictable if car makers repeat Nokia’s mistakes.

You might be forgiven for thinking that Internet of Things stands for adding apps to a watch, or connecting a thermostat to the internet. This is where IoT stands today. More broadly, IoT is about adding computing capabilities to a physical object, and allowing it to interact with the world around it. But this is only the beginning. As we argued earlier, IoT is fast escaping both Internet and Things. And it’s about to change e-Commerce in ways we never expected. An unconnected ‘thing’ is a missed business opportunity Today, it’s well understood that adding computing and Internet to a car, a watch, a thermostat, or a chair can allow the manufacturer to capture value beyond the purchase of that object and into data-driven business models. Car makers can now offer post-sales services, like vehicle diagnostics that alert you when it’s time to have your car serviced by a dealer. Or smartwatch apps that alert you when you’ve forgotten to put your seatbelt on. Watchmakers can create stickiness as you can now use your watch to unlock your front door, or control your thermostat without leaving the couch. Thermostat makers can now expand into energy management. Office furniture makers can now extend their business into productivity management. [tweetable]Makers of connected ‘things’ can subsidise them to make money from data-driven services[/tweetable]. We suspect that new norms will form in industry after industry, as goods manufacturers and services vendors experiment with these new business models. What is clear is that selling unconnected ‘things’ will increasingly look like a missed opportunity. Amazon’s wake up call But there is a much bigger revolution at play. We believe that [tweetable]IoT will fundamentally change the shape of e-Commerce[/tweetable]. With IoT, washing machine makers can now not just deliver detergent just in time by knowing when your supplies run out. They can also recommend the right detergent, based on your usage, type of clothes, on demand. Car makers can recommend where you buy your gas, by understanding your drive journey, availability of gas stations, pricing on-demand discounts, and gas station commission. Watchmakers can command a commission from health insurers, as they can monitor your heart rate, temperature, fitness habits and determine what risk zone you are in. In short, IoT makers can now afford a negative BOM (bill of materials) “a la Dell”, by subsidising the cost of hardware with the revenues from bundled e-commerce services. Internet of Things will allow any connected “thing” to become an affiliate for e-Commerce goods that are consumed together with the “thing” – what in economics are termed complements. Any connected object could become a distribution surface and customer acquisition channel for e-Commerce goods and services of every kind and description. IoT extends e-Commerce affiliate and user acquisition schemes beyond websites, mobile and apps, into every physical object. Amazon’s Dash offers an early glimpse of this model. Place a Tide button on your washing machine, a Huggies button next to your baby’s changing room, or a Gillette button in your bathroom and pronto, your supplies are at your door the following day. More importantly, Dash acts on your intention to buy before you change your mind and pop over to the 7 Eleven convenience store. Similarly, Amazon’s Echo, allows you to order anything from the comfort of your living room, and without lifting a finger. What’s interesting is that nor washing machine neither FMCG companies are directly involved in Amazon’s effort. Amazon’s moves should be a wake-up call for the white goods industry. The Physical Affiliate e-Commerce affiliate sales can happen in two ways: firstly, by pre-sales hardcoding of the e-Commerce service into the physical object. Think how Mozilla was able to make over $200M annually by preloading the Firefox browser bar with Google search, before moving to Yahoo. Affiliate sales can also be dynamic. Think how BMW can recommend a different brand of oil for the maintenance of the car based on price, oil efficiency observed on the car and many other similar cars, and the driver’ analyzed behavior on the road. Naturally, makers like BMW who can create value by tracking user behaviour will also be able to capture more value as an e-Commerce affiliate. White goods manufacturers can now extend their business models across the product lifecycle. They can also own the device real-estate that offers e-commerce discovery and distribution, and act as a customer acquisition channel for e-commerce goods and services. More likely, this customer broker role will be seized by more agile e-Commerce players. And all of this while adding value to the customer. Think: I’d like to buy a watch and improve my fitness at the same time, and get better health insurance cover. Or I’d like to buy a car and save money from fuel, every time. Or I ‘d like to buy a thermostat and have the peace of mind that I’m never spending more on energy bills than I need to. All these Jobs To Be Done are not for the few, the wealthy or the early adopters. In this smarter world, they are for the many. Closing the attribution loop More importantly, [tweetable]Internet of Things will allow e-Commerce to stretch across the breadth of the customer journey[/tweetable]. Consider how limited e-Commerce is today in understanding the customer journey: you search on Google for something to buy, click on what fits your purchase intent, including advertisement link, then lead to a purchase on the device being used. Along that path, Google receives a kickback (typically on a cost-per-click, CPC) from the advertiser on the assumption that a small percentage of those clicking the link will buy, making the business case for paying the CPC. There is no way for advertisers to know when a real purchase was made in a brick-and-mortar shop, let alone make someone with purchase intent visit that physical shop in the first place. This is the holy grail of advertising business, i.e. being able to track consumer behaviour from awareness to intent to purchase to purchase, and across web, mobile and increasingly number of physical connected touch points. By embedding the e-Commerce discovery and distribution surface on physical objects, and more connected touchpoints across the customer journey, you are now able to cross the last mile from awareness to purchase intent to purchase. Put simply, connected devices will become the optimum point-of-sale for e-commerce, search boxes and app stores for services, at the ideal place and ideal context of a purchase intent. The rise of programmatic e-Commerce Moreover, consider billions of “things” doubling as e-Commerce points of sale (PoS). This will result in the unbundling and extension of PoS for e-commerce outside the web (think Amazon.com), app and product (think Kindle) silos controlled by e-commerce players. It will lead to programmatic auctions for e-Commerce Call To Action (CTAs), as the most market-efficient way for matching demand with supply. This will mean that the programmatic, real-time bidding (RTB) for ads today will carry over to e-commerce and into the real world. More importantly, by retaining attribution across the customer journey and touchpoints, programmatic e-Commerce will be able to monetise by Cost-per-Action (CPA) in the physical world while providing enhanced value experience beyond what the comparable but unconnected appliance could ever bring. We can clearly expect a major reshuffle of the advertising industry and a further cycle of VC investment and consolidation that it will entail. –Andreas Constantinou As CEO and Founder, Andreas oversees the growth and strategy of VisionMobile. He has twelve years experience in mobile, having worked with the top brand names in the mobile industry including Telefonica, AT&T, Telenor, Vodafone, Deutsche Telekom, MTS, Nokia, Sony, RIM, HTC, Qualcomm, Ericsson and Microsoft. Over the last five years, Andreas has grown VisionMobile into the leading, most respected research firm on app economy and developer economics, with a client base and reputation that out rivals companies many times the size. Andreas on LinkedIn –Nicolas Sauvage Nicolas Sauvage is a “Software guy”, since first programming at 8 years old, and forever passionate about Software contributing to a better Connected World. He joined the management team of NXP Software in Feb 2011, and took various responsibilities over time including leading the OEM Business Line, worldwide sales, product management, Head of Korea, Head of Greater China. He is an Alumni of TTPCom, OpenPlug, London Business School and INSEAD. Nicolas Sauvage on LinkedIn #businessopportunities #commerce #iot

It’s very clear that software companies took the lead in innovation around voice communications. The telecom industry is lost in the woods arguing about standards, technology and regulation, while Facebook, WhatsApp, Google, WeChat and numerous startups are focused on new use cases and business model innovation. Telco is lost in the woods (again) Telephony is considered a declining business, despite globally increasing dependence on communications. [tweetable]People are not communicating less – they just attribute less and less value to telephony[/tweetable]. Today, many everyday communication needs are better served by alternatives that don’t fall within the narrow definition of telephony. We wrote about freeing voice from telephony almost 3 years ago in our Telco Innovation Toolbox. Today I’m excited to see the future of voice unfolding in full force in front of our eyes. Facebook wants to take over the dialer Did you notice how Facebook has become increasingly bold in everything related to voice and video services? Messenger’s 600 Million users can call each other using voice and video without leaving the app. Facebook-owned Whatsapp also allows its 800 Million users to speak with each other within the app. The huge scale of Facebook voice services surpasses any telco. Compare that with China Mobile, the number one telecom operator in the word, which had 808 Million subscribers as of January 2015. Facebook understands that [tweetable]voice is central to human communication and will always remain so[/tweetable]. Therefore the company wants to make sure that people will speak with each other inside the walled gardens of the company’s social networks. Facebook doesn’t look at voice as a revenue source. Voice is a universal need and therefore it is an effective way to attract and engage users. David Marcus, who left the position of PayPal President to run Facebook Messenger, says: “VOIP is just one way that the company hopes to use the messaging app as a platform for much bigger things, including online payments.” Google Fi wants to take over the core network Google trails behind still trying to break through with its Hangout platform. The recently announced Google Fi service is a shot in the direction of reinventing voice and video communications. So far, most media and blogosphere attention is focused on Google Fi pricing and network switching technology. I believe that these are the least interesting aspects of the Google’s initiative. It’s pretty clear that Google has bigger plans in mind. Google Fi unbundles voice service from the telecom network turning Project Fi into a platform for innovation in communication services. Nick Fox, Google VP of Communications Products writes on the company blog: “As mobile devices continually improve how you connect to people and information, it’s important that wireless connectivity and communication keep pace and be fast everywhere, easy to use, and accessible to everyone. That’s why today we’re introducing Project Fi, a program to explore this opportunity by introducing new ideas through a fast and easy wireless experience.” Today Google uses pricing and network switching technology to attract an initial user base and seed Project Fi for the next stage. The next stage will be opening the platform to Google’s huge base of mobile and backend developers, together with an ever-growing number of Android handset makers. This is when Google Fi will become truly interesting allowing Google to “pull an Android” on the core business of telecom operators and create a credible competition to Facebook’s communication services. Much like Facebook, Google is going into telecom not for wireless plan revenues, but to compete asymmetrically, transferring profits from the telecom industry to its core online ad business. Twilio wants to take over the telecom API Twilio has proven that developers have a genuine interest in telecommunication services. The company offers an API platform for programmatic access to voice telephony, SMS and now instant messaging. The company reports that 700,000 developers have already registered to use its platform. Contrary to the many failed telco attempts at driving revenue with APIs, Twilio proves that telecom developers and APIs can be a good business too. The company is worth over $1 Billion. Twilio chief executive Jeff Lawson says the company hit an annual run rate of $100 million in revenue in 2014, and is adding $1 million in annualized revenue every seven days. The company actively nurtures its main asset – the ecosystem of developers. Twilio teamed up with three well-known venture capital investors, Bessemer Venture Partners, DFJ and Redpoint Ventures to create a $50 Million investment fund to invest in companies using the Twilio API. Twilio flourishes where telco failed: creating an attractive business by building a developer ecosystem on top of commodity telecom services. Developers can reinvent point-to-point telephony into thousands of use cases that telcos were unable to realise. Microsoft wants to take over business services Microsoft is about to join the fray as well. The first move was replacing Lync with Skype, a still hugely popular VoIP service, as a core of its suite of business communication services. For Microsoft, voice is a way to boost Office – its well-entrenched suite of business tools. Exciting times ahead Telephony may be in terminal decline, as most analysts agree. Voice and video will however remain a central part of human communication. These are very exciting times in telecoms for those who understand that [tweetable]”digital” is not a channel, but a new set of business models[/tweetable]. Software companies that use these new business models will use voice communication asymmetrically transferring profits from legacy telephony to their non-telecom business. #voice #googlefi #twilio #facebook #strategy #whatsapp

The world’s largest Droid conference is back in sun&fun Israel! Two days in Tel Aviv gets you next to some of the best thought leaders, experts, and evangelists from the Android world. Our Strategy Director Michael Vakulenko will also be there, dropping the latest on smartphone strategy & competition. Get your sneak peek into new technologies/industry knowledge by registering below! register here: http://il.droidcon.com/2015/registration/

VisionMobile just launched the 9th edition of the Developer Economics survey. This time around, our survey tracks sentiment not only from mobile developers, but also from desktop, Iot, and Cloud as well. The duration is 5 weeks, and we’ll be closing in early June. The key findings from the survey will be available as the free State of the Developer Nation Report in late July. If you’re a developer, then help give back to the community by contributing to our research.

We continue with a fourth and final installment of insights from our most recent publication, IoT Developer Megatrends – a short publication on the most important trends for IoT. It’s clear that the Internet of Things will be a big opportunity. But how exactly will we find that killer app? Or rather, how can we build an engine that turns out one killer app after another? Apps like Instagram, WeChat, Uber or even Angry Birds have created entirely new, multi-billion dollar markets that were not even imaginable before. We concluded in the previous trend that the consumer market is the bigger IoT opportunity because it similarly offers more opportunities to explore new and completely unexpected use cases: a crucial driver of demand for IoT products. To find those opportunities, innovators need to be given free reign to experiment with unlikely ideas. They also need to get every opportunity to present their products to users, without having to get permission from a conservative gatekeeper. Only in this way can we collectively find the hidden gems. Already we’re seeing IoT platforms emerge that consider developers as first-class ecosystem citizens. [tweetable]Developers are not your new customer, contractor or partner. They are your resellers[/tweetable]: they drive demand for your product. Ford, for example, has attracted over 11,000 developers to its platform for car apps. Similarly, the advent of Apple’s CarPlay and Google’s Android Auto are awakening the desire to develop apps for cars in thousands of developers. This is a strong break with the current practice where only a handful of select partners can work with car makers on in-vehicle infotainment. Smart Watch platforms like Pebble, Razer, Android Wear or Apple’s WatchKit open up the wrist to new innovation. No longer do you need to develop the watch itself to provide the service. Already 25,000 developers flocked to the Pebble platform and created 6,000 apps. The same pattern emerges in the Smart Home, where platforms like SmartThings and Apple HomeKit enable developers to combine data from all the connected devices around the home into clever scenarios, which then attract more users. And the winning platform is… (*drumroll*) All these platforms enable developers to orchestrate data streams into valuable scenarios for users. Soon, this will become so easy that everyone can be a “developer”. Then, the true innovation potential of the Internet of Things will be unleashed. Indeed, developer interest in the Internet of Things is picking up fast. Already, 53% of mobile developers are involved in IoT development. This data point from our Q1 2015 Developer Economics survey of 4,000+ IoT developers implies that there are well over 3 million IoT developers active today. All of those people are looking for new and interesting innovations. 45% of them are professionals, seeking to build or grow a business out of IoT. The platform that succeeds best in empowering developers and connecting them with users will be more powerful than any single killer IoT app or product. That platform will have a solution for every need, and will therefore unlock consumer demand beyond its wildest dreams. Because every user and every developer will look at that platform first to find or market a solution – the much lauded network effects – it will be impossible for other platforms to compete. [tweetable]A winner-takes-all outcome – that’s what’s at stake in the Internet of Things[/tweetable]. We can get even more specific. We predict that by 2020, Apple, Google or both will have built a dominant IoT platform that makes head-on competition impossible. Established technology companies like IBM, Cisco or GE, and incumbent IoT specialists like Jasper, PTC or Sierra understand the enterprise IoT market very well. But they are not specialists in connecting developers with users. Google and Apple on the other hand have built ecosystem empires with well over 5 million developers combined. Already both companies are active in every major IoT vertical. Our survey shows that their nascent platforms are the most popular and attractive to developers. For Apple and Google, IoT is an extension of their current efforts, not the creation of an entirely new business. This puts them in pole position at the start of the IoT platform race. #developer #internetofthings #IoTdeveloper

This may be the year when the mobile web apps finally go mainstream. Or, at least, their hybrid cousins will. Not because the technology will finally be ready. For most apps, it already is. Rather, the web will finally hit the big time with mobile apps precisely because we’ll talk about it less and use it more. Time for HTML5 Oh, sure, there are good reasons for the mobile web to finally hit its stride. Sencha’s Nick Harlow offers five: High quality WebViews are now available on most platforms (and getting dramatically better thanks to Apple’s new WKWebView in iOS 8). While low-quality WebViews persist within the Android device base, on balance things are looking up; Broad platform support is only economically feasible using web tech; Web tech bridges the desktop-mobile divide; Using web tech helps to simplify application management and security; and Device fragmentation is accelerating. The web helps developers keep up But before we herald the future of hybrid, it’s worth pointing out that some believe that future is already here. As EmberJS co-creator Tom Dale tells me, “”The dirty little secret of native [app] development is that huge swaths of the UIs we interact with every day are powered by web technologies under the hood.” While Dale may be getting ahead of himself – [tweetable]the reality is that the web still has a long way to go to achieve mass-market app adoption[/tweetable], and maybe constitutes 10% of apps within the app stores – the trends do point toward more hybrid apps, especially among the enterprise set. VisionMobile’s own survey data shows that today 30% of developers are using some kind of cross-platform tool, of which 60% are using PhoneGap. This is great, but it doesn’t obviate the need for the mobile web to get better to erase complaints about performance. And it will. Getting better all the time Summarizing the Google Chrome Developer Summit, Divshot CEO Michael Bleigh says, “Google is doing everything it can to get mobile web to 60fps, which gives you about 16ms per frame to do everything you need to do. It’s hard to even enumerate all the different ways they’re working on this.” Speed will bolster web app performance, perhaps eliminating the “jank” that many associate with web apps. But it’s not just about accelerating the mobile web. We also need to rethink how we approach mobile web apps, as Ionic (based on Google’s AngularJS) and React Native (from Facebook) do. While the latter is not “web technology,” strictly speaking, these frameworks are actively advancing the state of the art for web apps. The result, as Mozilla (and longtime native app) developer James Long puts it, is impressive: It only takes a few minutes playing with React Native to realize the potential it has. This works. It feels like I’m developing for the web. But I’m writing a real native app, and you seriously can’t tell the difference. At the UI level, there is no difference; these are all native UIViews beautifully sliding around like normal. Indistinguishable from native performance… but with a far more accessible development platform. That’s powerful. A question of competence But let’s be clear: [tweetable]if your development team isn’t any good, it really doesn’t matter which development platform they choose[/tweetable]. A bad iOS programmer is going to lose every time to a good HTML5/web programmer, and vice versa. Indeed, one of the primary problems with the web is that it so dramatically lowers the bar to development that virtually anyone with Javascript and CSS skills can build a mobile app. A lame one, that is. Mobile developer Nic Raboy nails this: All my applications, native and hybrid, have mostly positive reviews and if you visit the apps on Google Play, you’ll see no reviews include mention about how the application was crafted. This is an important thing to notice because many haters will attack developers on the idea that hybrid applications do not perform or look as good as native applications. This is simply not true. Native or hybrid, if the developer or designer is no good, the application will suffer regardless. So as fantastic as advancements like AngularJS and ReactJS will be for web app development, they’re not going to be enough if developers underinvest in learning them. There are already exceptional hybrid apps like Instagram that demonstrate what strong developers can do with the web. We just need more of them. Or maybe what we need is better tools. That’s one primary takeaway from VisionMobile’s “How Can HTML5 Compete With Native?” report. As report author Dimitris Michalakos concludes, “The question is no longer *whether* HTML5 can produce quality apps, but *how* easy it is to create quality web apps.” Given that “HTML5 is like driving a car without a dashboard,” the key is to deliver better dashboards, or tools, to make it easier to build great web apps. This involves significant improvements to the debugging, profiling, and memory management tools available, but it’s also something the web frameworks can help with. As such, it increasingly looks like a question of WHEN, not IF, mobile web apps will take off. And the answer to that question is either “now”, if you’re paying attention to how developers actually build apps today, or soon, if you’re waiting for them to start talking about the fact that they’re building with the web. #html5 #mobileweb

We continue with insights from our most recent publication, IoT Developer Megatrends – a short publication on the most important trends for the Internet of Things. In this post, we look at the potential of consumer and enterprise IoT markets. Enterprise IoT (industrial, large-scale applications) are currently the biggest market in terms of revenues, but will that remain so forever? Consumer applications like Wearables and Smart Home are hyped in tech media, but will that translate into a real business opportunity? History and data can provide some answers to these questions. Flashback to 2007. “Five hundred dollars fully subsidized with a plan!” Steve Ballmer laughed as the journalist asked for his reaction to the iPhone launch. “That is the most expensive phone in the world and it doesn’t appeal to business customers because it doesn’t have a keyboard. … Right now we’re selling millions and millions and millions of phones a year; Apple is selling zero phones a year. In six months, they’ll have the most expensive phone by far ever in the marketplace. … Let’s see how the competition goes.” Who would buy an overpriced phone that doesn’t appeal to business customers, indeed! From a latecomer to the market with no experience in mobile telephony, nonetheless. Except for one small detail. The demand for expensive iPhones (and later for Android) did not come from business users who wanted faster-better-cheaper. It came from consumers craving the millions of apps available on these devices. Not only was Windows Mobile overtaken by iPhone and Android, but these new products ultimately undermined the enterprise market that Microsoft and Blackberry owned. In 2014, iOS and Android accounted for 97% of new mobile device activations in enterprises, while the latter two were obliviated. The new normal: consumers first As it happens, the pattern we saw in smartphones is not the exception, but the rule for most recent computing technologies – Software-as-a-Service, social media, and even PCs. Likewise, IoT will find large-scale adoption in consumer markets first. After that, consumer technology will proceed to displace its supposedly superior enterprise equivalent. This might surprise you, as enterprise solutions comprise the bulk of the IoT market today. Isn’t all the money in large enterprise projects then? [tweetable]Unlike in days past, the technology underlying the IoT is relatively cheap and ubiquitous[/tweetable]. It doesn’t require large government or enterprise budgets to fund so it is accessible to experiment and iterate with. Just like with mobile apps, innovators can take existing technology into countless needs and niches, most of them unimaginable today. (As opposed to inventing new technology to realize an existing vision.) The enterprise market caters to straight-forward, well-understood business needs and grows at a moderate pace. Meanwhile, for consumers without long procurement cycles, the plethora of use cases unlocks new demand – things we didn’t realize we needed – which grows the market at incredible speed. Finally, enterprise technology is overtaken: if I can have this fantastic, cheap, powerful consumer technology at home, why am I stuck with old, clunky tools at work? It should come as no surprise then, that [tweetable]the most popular verticals in which IoT developers are active are the Smart Home and Wearables[/tweetable]: distinctly consumer-oriented sectors. The other verticals have a B2B orientation, requiring developers to sell their work to enterprises or partner with big companies to get their products to consumer markets. As a result, they are much less attractive to developers, and innovation will be slower there. The Connected Car market offers us an interesting view in what happens when a sector “consumerizes”. Up until now, developing car apps required partnering with car makers. Apple’s CarPlay and Android Auto enable – for the first time – a direct-to-consumer model for developers. Immediately we see an uptick in developer interest. Market reset IoT is a greenfield market. When new use cases lead to new demand, this new demand is fair game for everyone. The rules of the current market will not apply. New players can appear out of nowhere and overtake incumbents (as Apple and Google did in mobile). New business models can emerge, some of which disruptive to incumbents. Some newcomers might give for free (or at zero profit) what incumbents sell, in a model that boosts demand for their core product. History shows that it will be nigh impossible for incumbents to react effectively. [tweetable]We predict that by 2020, new players with new business models will dominate IoT[/tweetable]. Most incumbents will be bankrupt, acquired or uncompetitive. #data #developers

In our latest Developer Economics report, we discussed the rise of e-commerce as the most lucrative of revenue models, expected to account for 2.5 times as much revenue as the rest of the app economy put together in 2015. Using the ‘Key Developer Metrics’ dashboard on DataBoard, our new, interactive dashboard service, we found that developers in the mature markets of North America and Western Europe had a weaker preference towards e-commerce as compared to the developing markets. Underlying reasons include high fixed line broadband and desktop PC penetration in North America and Western Europe, coupled with the maturity of the local e-commerce markets. Consumers are more likely to stick with their established desktop-commerce habits, while strong motivations would be needed to divert usage from web to mobile. At the other end, developing markets leapfrogged directly to mobile, skipping the web-only maturity phase that North America and Europe underwent. In Asian markets, mobile-commerce is in many cases perceived as the only alternative to offline shopping and is therefore picking pace rapidly. In India alone, m-commerce went up from about 10% to 50% of online transactions during the last 12 months and is expected to reach 70% in 2015. This poses a significant opportunity for m-commerce apps, especially in the markets where there is weak competition from established brands. App developers prioritizing the Mobile Browser (16%) have significantly higher adoption of e-commerce than iOS and Android. This is explained by the ease of porting an existing web e-commerce app to mobile and leveraging the popularity of existing e-commerce apps. On the other hand, [tweetable]iOS and Android, have a similar level of e-commerce adoption (11%)[/tweetable], though for different reasons. The former because of the established spending patterns of their consumers, and the latter because of the wider reach to consumers, prevailing in the regions where e-commerce is growing fastest. Native apps in this case are not expected to replace web apps, but rather co-exist to address a different need: One-off buyers are unlikely to download an app and are better attracted to the service through mobile web. Once loyalty builds up, it makes sense to move into using a native app in order to take advantage of the better browsing experience and lower friction in transactions that native apps have to offer. By using further the DataBoard filters we compared revenue generation between developers who use e-commerce vs. those using other business models per primary platform. Our data on 8,000+ developers indicates that adopting e-commerce makes sense across all platforms, as it increases significantly the chances of $5,000+ monthly app revenues (29%) as compared to all other revenue models (19%). iOS developers building e-commerce apps stand a better chance (+6%) of earning above $5,000 per app per month as compared to their peers who use other business models. For Android developers, the opportunity is far more profound as e-commerce may prove to be the answer to their monetisation problems: The chances of making $5,000 in monthly app revenues are substantially higher for Android developers who build e-commerce apps (27%) than those who don’t (17%). Leveraging Android reach to sell something other than apps, or, in other words using Android apps as a channel, is an excellent opportunity for Android developers who are after app revenues and find it hard to monetise their apps using ‘mainstream’ business models. The next logical question to ask would be on the profile of the app businesses who are successful in e-commerce. Posed differently, what is the recipe for success in e-commerce? Using our DataBoard service you can find out and plan your future strategy on e-commerce.. You can access packages including DataBoard services here.

In last week’s blog post, we said that IoT is breaking free from Internet and Things. That is, Internet of Things is not about how to add a service to my product, but about turning the information generated by all those sensors, devices, things and services into knowledge about the environment and meaningful action. [tweetable]Making sense of data is the core value driver in the Internet of Things[/tweetable]. Let’s explore this idea a bit further. We continue with insights from our most recent publication, IoT Developer Megatrends – a short publication on the most important trends for IoT. Adding connectivity and services to existing products and machines often leads to a “one device, one app” situation. This proliferation of apps quickly becomes unwieldy to manage. A basic improvement would be to combine multiple devices into one user experience. Most of the emerging Smart Home solutions (e.g. Ninja Sphere, ImperiHome) focus on the ability to control all your devices from one place. But why stop there? Services that create knowledge and drive meaningful action by mashing up multiple data sources are on the rise. Not all those sources have to be sensors or devices. A good example is the Nest Learning Thermostat. To intelligently adjust the temperature in your house, the thermostat uses a lot more info than just the current temperature. It detects your presence with sensors. It talks to other appliances from Nest itself (smoke detectors), Whirlpool (washers), August (locks), Automatic (car adapters), Hue (lights) and others. Nest even works together with electricity companies who pay users to automatically turn down cooling during peak times on the electricity grid. The possibilities to make Nest smarter by pulling in more outside data are endless. Other good examples are health & fitness platforms like Apple HealthKit or Google Fit. They pull together data from all your wearables, smart scales, apps and more into a full picture of you. That data could also be shared with medical professionals – the birth of a new type of medicine? It’s easy to see that using more sources of information creates more opportunities for innovation than just connecting a single device, or even than listing multiple devices in a single service. By combining devices in one service, you add up their functionalities. By mashing up data, you multiply possibilities. However, combining data from different sources presents some tough engineering problems. It comes as no surprise to see the rise of data-centric platforms and tools that help developers to pull together and mash up information. Examples include Samsung’s SmartThings and Apple’s HomeKit in the Smart Home; Dash and Mojio in the car; Validic and Jawbone’s UP platform in health. A single platform for the Internet of Things? The insight that mashing up data provides more opportunities for innovation will help us to answer another question that’s on many people’s mind. [tweetable]The Internet of Things is not one market, but a collection of many diverse verticals[/tweetable]: from Smart Home and Wearables to Smart Cities and Industrial IoT. Will a single platform cater to all these verticals, or will sector-specific platforms win out? At this moment, both types of platform exist. In our IoT Developer and Platform Landscape 2015 report, we list 50+ vertical platforms and a similar amount of general purpose ones. In these early days of the Internet of Things, vertical platforms probably have the advantage: it’s easier for them to create beachhead markets in specific verticals from which to expand. But will this focus hurt them in the long term? If combining more sources of information leads to more opportunities, then limiting platforms to a single vertical is an unhelpful constraint, not a useful focus. If your car pings your thermostat when you’re about to leave from work, is that a Smart Car scenario, or a Smart Home scenario? Both, and neither. It’s a Smart Life scenario. At some point, [tweetable]IoT platforms will have to cross vertical boundaries to reach their full potential[/tweetable]. Already, key players like Google, Apple and Samsung are active in all key verticals concurrently. We predict that the top IoT platforms in 2020 will be cross-vertical. Sector-specific platforms will be niche or in decline. #iot

It seems that if your company doesn’t have an IoT strategy nowadays, you might as well quit. But not just any strategy will do. Let’s look at some of the hot topics in IoT today that are unlikely to make a dent in market adoption. Here are some insights from our most recent publication, IoT Developer Megatrends – a short publication on the most important trends for IoT. Here’s what everyone knows about the Internet of Things. It’s going to be enormous. We’ll have tens of billions of devices by the end of the decade. This is a multi-trillion dollar opportunity over the next years. All the major players in consumer electronics, mobile, cloud, factory automation, enterprise IT and more will be fiercely competing for a piece of that pie. All this information shouts: [tweetable]if your company doesn’t have an IoT strategy you might as well quit[/tweetable]. Not just any strategy, of course. The history of technology is littered with great concepts and engineering feats that never became mainstream products. It’s worth looking at some of the hot topics in IoT today that are unlikely to make a dent in market adoption. What IoT is not A lot of the buzz in the media and on industry forums is about the Internet of Things technology itself. Standards. Security. Privacy. Whether to use Bluetooth, Wifi, cellular or mesh networks. If history is any guide, all of these important questions will get solved over time, but none are an actual roadblock to market adoption. iOS and Android didn’t depend on app standards to revolutionize the smartphone industry, for example. Meanwhile, product designers have discovered IoT and are adding connectivity (internet) and services to their products with blazing speed. Washing machines, socks, ovens, shoes, cars, door locks, toothbrushes and even flower pots are becoming “smart”. The problem with this “product with an app” approach is that all those disconnected, individual apps will soon become impossible for users to manage. The Internet of Things isn’t even so much about things. For example, companies like Google-owned Waze achieve better traffic intelligence by crowdsourcing smartphone data rather than through an extensive network of road sensors, typical for a Smart City project. True smart cities have taken note, and are starting to use Waze’s data. Waze literally never shipped a thing. Breaking Free of Internet and Things Here’s an uncontroversial, but often forgotten truth. [tweetable]The value of IoT products doesn’t come from the technology or the internet or the things[/tweetable]. Value is created in IoT by making sense of data, turning it into knowledge and meaningful action. It’s not the parking sensor that matters, but finding a free parking spot quickly and without frustration. This perspective on the Internet of Things has some interesting implications. We predict that the most interesting IoT applications in 2020 will use data that already exists today, rather than new sensors. Why? Value is created by making sense of data, and many data will have more than one possible source (like in the Waze vs traffic sensor example). New devices will be more expensive to build, install and maintain than solutions that mine existing sources of data. When a solution can be found that doesn’t require new sensors or hardware, it will prevail. Already, companies like Cellint use data from mobile network operators to monitor traffic jams in cities. Internet of Things is not about how to add a service to my product, but about making my product work with every other service. It’s about how all those sensors, devices, things and services can be integrated into the user’s digital lifestyle. IoT is breaking free from Internet and Things. #iot

From ad networks to customer support, developer tool startups have been popping up in the last few years to help app developers write less code, reach the right users and monetise. 2014 was a year with a wealth of M&A activity with over 30 transactions in the developer tools space. Developer tools consolidation [tweetable]There are more than 1,000 developer tools available in the market[/tweetable], with many of them popping up from one day to the next and (some of them) quietly disappearing after a short period of time. That means there’s one developer tool startup for every 1000 apps! Ad networks, user analytics, and cross platform tools feature prominently among dev tool startups acquired in 2014. The acquirers were typically large companies, such as Yahoo, Apple, Google, Facebook, Twitter, Unity and Microsoft, who are building up Mega SDKs with comprehensive developer tool portfolios. The majority of dev tool startups cannot survive on their own for long and are seeking VC investment or buyouts by the larger players in the field. Developer tools need a long period of seeding the market with free products, before they can hope to see conversion to a premium tier – let alone figure out what developers are willing to pay for. In 2013, it was backend-as-a-service tools that were a must-have developer offering and the subject of acquisitions, most notably with Facebook and Parse. [tweetable]In 2014, it was ad networks that were the prime acquisition targets[/tweetable], and with cutthroat price competition and complex landscape this is only bound to intensify. We’re also starting to see an evolution towards UI technology as a developer differentiation, with the acquisition of Form by Google which was subsequently released for free in less than 3 months. In the table below we’ ve tracked 33 developer tool acquisitions in 2014 (let us know if there are any we ‘ve missed?) Developer tools acquisitions of 2014:CompanyProduct descriptionAcquired byDateAcquired forSense NetworksMobile location advertisingYPJan 2014–Little Eye LabsPerformance analysis and monitoring tools for AndroidFacebookJan 2014$10-$15MInsightsOneCloud-based predictive analytics solutionsApigeeJan 2014–SparqMobile marketing platformYahoo!Jan 2014–GetJarIndependent app storeSungy MobileFeb 2014$50MBurstlyBeta testing, user analytics and monetizationAppleFeb 2014–CloudantDatabase-as-a-service for web and mobile developers.IBMFeb 2014–ApplifierUser acquisition SDK with video ads and game replay SDKUnityMar 2014–AdMobiusMobile Audience Management PlatformLotameMar 2014–TesthubApp testing servicesApplauseMay 2014–Mocean MobileMobile Ad networkPubMaticMay 2014–DistimoApp store analyticsApp AnnieMay 2014–CapptainPush notifications and user feedbackMicrosoftMay 2014–TapCommerceMobile ad retargetingTwitterJun 2014$100MAppurifyMobile testing platformGoogleJul 2014–FlurryUser analyticsYahoo!Jul 2014$200MMobileDevHQApp marketingTuneAug 2014–5RocksUser analytics for game developersTapjoyAug 2014–Mongoose MetricsCall tracking technologyIfbyphoneSep 2014–FeedHenryCross-platform toolRed HatSep 2014$82MPlayHavenMobile gaming monetization platformScience MediaSep 2014–MopayMobile paymentsBokuOct 2014–DucksboardDashboard visualisation technologyNew RelicOct 2014–FirebaseBackend as a serviceGoogleOct 2014–TelerikUI frameworks and cross platform toolsProgress SoftwareOct 2014$262.5MMobFoxMobile ad networkMatomy Media GroupOct 2014$17.6MTap for TapPromotion exchange for app developersPretio InteractiveOct 2014–Corona Labs2D game engineFuse PoweredNov 2014–AppifierMobile App BuilderAppMakrNov 2014–AppiaUser acquisition platformMandalay Digital GroupNov 2014$100MTapticaMobile user acquisition platformMarimediaNov 2014$13.6MNexageMobile ad networkMillennial MediaDec 2014$107.5MHockeyAppApp performance management and beta distribution serviceMicrosoftDec 2014– Even though the pace of acquisitions was down slightly in 2014, as indicated by the graph below, it still remains high compared to the 2011 and 2012 levels. As our research demonstrates, developer tools are correlated with both developer experience and revenue – and as such are becoming the competitive arsenal of those that want a fighting chance in the app stores. M&As accross the 2011-2014 period: In 2015 we expect to see the levels of developer tools M&A continue unabated, as larger players – from ad networks to media companies – leverage developers and their apps as a user acquisition channel. And with dev tool startups competing globally for a pool of 5.5 million app developers, the cost of developer acquisition is only going upwards, and not many startups will be able to afford it.

Our 8th Developer Economics survey has once again achieved an industry-leading scale, including responses from more than 8,000 app developers and 143 countries. Their collective insight shows us an app economy that’s beginning to mature. Platform mindshare and priorities are fairly stable and developers are increasingly turning to cross-platform technologies to deal with the multi-platform reality. Tool adoption is gradually increasing and a shift in focus towards enterprise app development is underway. You can get a copy of the full report here – it’s a free download. The big changes on their way are in development languages and the Internet of Things. Apple’s new Swift has had an impressive level of uptake but C# and JavaScript are also growing in importance. Meanwhile mobile developers are showing a very strong interest in the next wave of connected devices. Platform Wars The platform wars have ended in a stalemate. [tweetable]Apple have an increasing lock on the high-end with iOS and Android dominates everywhere else[/tweetable]. Windows Phone is still growing, now at 30% mindshare, but not generating enough sales to break through the app-gap. The split of developer platform priorities amongst full time professionals best illustrates the stalemate. Android has 40% of developers, iOS has 37%, whilst Windows Phone and the mobile browser have just 8% and 7% respectively. Although not yet a priority the mobile browser has also bounced back strongly from an all-time low in terms of mindshare 6 months ago, with 25% of developers now supporting it. With the massive growth of mobile apps it’s important to remember that the desktop and mobile web combined is still the most important digital channel for the majority of businesses. [tweetable]The web is definitely not dead[/tweetable]. The Rise of Swift Our development language rankings show absolutely unprecedented growth for Apple’s new Swift language. [tweetable]20% of mobile developers were using Swift just 4 months after it was introduced[/tweetable] to the world. For comparison, Google’s excellent Go language doesn’t make it onto our new top chart for server-side programming languages, having reached just 5% mindshare amongst mobile developers after more than 5 years. [tweetable]Amongst the first wave of Swift adopters, 23% were not using Objective C[/tweetable], a sign that Swift may succeed in attracting a much wider range of developers to build native iOS apps. Revenues Growth in direct revenues from the app stores is slowing. As these direct revenues are preferred sources of income for the Hobbyists, Explorers and Hunters that make up around 60% of the mobile developer population, competition for them is becoming more intense. 17% of developers who are interested in making money generate no revenue related to apps at all. A further 18% of developers make less than $100 per month and the next 17%, bringing us to a total of 52%, make less than $1000 per month. Those low revenue earners are not at all evenly distributed across platforms. Of those that prioritise iOS, only 37% are below the app poverty line, making less than $500 per month on iOS. On the opposite end of the revenue scale, 39% make more than $5,000 per month on the iOS platform. Rather surprisingly, the revenue distribution for Android-first developers is not much different than for those targeting BlackBerry 10 or Windows Phone. In fact, developers that go iOS first actually earn much more revenue on Android than those that prioritise the platform. Internet of Things Despite the relative immaturity of IoT platforms, mobile developer interest is high. A massive [tweetable]53% of mobile developers in our survey were already working on some kind of IoT project[/tweetable]. Smart Home was the most popular market with 37% of mobile developers working on IoT projects targeting it. Wearables were a close second with 35% mindshare. The majority of these mobile developers involved in IoT development are doing it as a hobby (30% involved at this level) or side project (just under 20%), whilst working on mobile apps in their day job. This is expected at this stage of the market where revenue opportunities are still limited. Tools Tool awareness is increasing. The fraction of developers not using any third party tools at all has fallen to an all time low of 17%. The second most popular category of tool is ad networks, with a 31% adoption rate. Unfortunately this is the one category of tool that’s negatively correlated with revenues. Cross-platform tool adoption is on the rise. The percentage of developers using these tools has grown from 23% to 30% over the last 6 months. While cross-platform tool use was previously uncorrelated with revenue it’s now a positive revenue indicator. We don’t believe this is due to a significant improvement in the tools, rather it’s because of their disproportionate use in enterprise app development. Enterprise vs. Consumer The enterprise app gold rush is now well underway with 20% of developers primarily targeting enterprises, up from 16% in Q3 2014. This shift in focus is paying off. [tweetable]43% of enterprise app developers make more than $10K per month[/tweetable] versus 19% of consumer app developers reaching the same revenue level. Amongst consumer app businesses, the majority of the revenue is coming from free-to-play games. A typical game is giving a third of gross revenue to the app store provider as a cut of in-app purchases and spending half of what’s left on ads to acquire new users. These game developers are starting to look more like typical fast moving consumer goods businesses, with significant benefits from scale. Despite overall revenues from the stores still rising, life is getting much harder for the small independent developers that try to serve consumers. The good news for consumer app developers is that 3 of their top 5 favourite categories are common with enterprise app developers. It’s definitely not too late to re-focus on B2B rather than B2C sales. Also, the skills developed building consumer apps are in greater demand than ever now that more and more businesses are taking mobility seriously. This is a trend that will keep running for several years yet. Want more? Download and read the full report #developereconomics