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[As we launch the Developer Economics 2013 online survey, Senior Analyst Andreas Pappas introduces Developer Economics 2013, the fourth in our series of developer research reports. This time we’re benchmarking the building blocks of the app economy, from analytics tools to voice APIs. Join us in Developer Economics 2013, take our online survey and win great prizes.] Back in June 2012 we launched Developer Economics 2012, the third in our series of reports that focused on app ecosystems, developer segmentation, platform economics and global app trade routes. Today we are embarking on the evolution of our developer research: Developer Economics 2013 focuses on the best practices for the tools, services and APIs that developers use to build, market and monetise their apps. Take the survey, have your say on your favourite tools and win prizes, including an iPhone 5 and a Samsung Galaxy SIII. The survey will soon be available in Chinese, Russian, German, French, Spanish, Korean. Developer Economics 2013 is sponsored by AT&T, Mozilla, Nokia, BrightCove, BlackBerry and Telefonica. A service economy develops around app ecosystems The mobile development landscape has undergone a massive transformation since the early days of the iOS and Android platforms. In the early stages developers faced a limited supply of tools and services to assist them with crossing platforms, beautifying the UI, bridging fragmentation, integrating with ad networks or analysing user behaviour. They had to create most of the building blocks from scratch using their own means. As mobile application development continues its growth from 100,000s to millions of apps, the rush for gold has sparked a rush for spades. Across the developer journey, there is now a tool for (almost) every developer need, from app testing to ratings management. The app economy is evolving towards a service economy where developers can pick from a range of tools and services to assist them along the plan – develop – market journey. But best practices are yet far from clear. Third-party developer services, ranging from user analytics, location APIs, bug-tracking tools, app-store optimisation services, and cross-promotion networks are, today, vying for mindshare among developers. Developer Economics 2013 aims to identify the most popular developer services among these and measure their Developer Mindshare. Furthermore we aim to understand the reasons developers choose the services they do and how they rate them across range of key performance indicators (KPIs), such as reliability, availability across platforms and ease of integration within an app. The right tools for building an app business Developer Economics 2013 is benchmarking best practices in a variety of developer tools sectors:Ad NetworksAdColony AdMarvel AdMob AdWhirl AirpushApple (iAd) Burstly Fiksu Flurry InMobiInneractive JumpTap Lead Bolt MillenialMedia mOcean MobileMobClix Nexage mopub Smaato warp.lyBack-End as a ServiceACS Applicasa Apstrata Buddy CloudMineCloudyRec Deployd FeedHenry iKnode Kinveykumulos mobDB Parse ScottyApp sencha.ioStackMob Usergrid (Apigee) Trestle (Flurry) QuickBloxBug TrackingAirbreak ApphanceBugSense CrashlyticsCrittercism Hockey AppTestFlight UsermetrixCross-Platform ToolsAdobe AIR Appcelerator AppMobi BrightcoveCorona Marmalade MonoMoSync PhoneGap QtRunRev Sencha UnityCross-Promo NetworksadDash AdDuplex AppCircle (Flurry) Applifier AppFlood (Papaya)Chartboost clashmedia Fiksu G6PayGreatPlay Network Jampp maudau RevMobSponsorPay Tapjoy W3i Wavex (6waves)User AnalyticsApsalar Bango DistimoFlurry Google LocalyticsMobClix mopappTestflight Live (Burstly) UserMetrixVoice ServicesAT&T Deutsche Telecom FonYou GetVocal HarQenHoiio Ifbyphone IOVOX Jaduka MicrosoftOneAPI Sendflow Skype Telefonica TelekuTringMe Tropo Twilio Verizon Vivox Which tool should you use and which one should you trust? These sectors are becoming increasingly crowded with new entrants while merger & acquisition activity is changing the landscape almost on a monthly basis. The tools and services benchmarked in this survey are becoming the building blocks of modern apps and Developer Economics 2013 aims to establish best practices for the key developer tools sectors across the developer journey. Developers are often at a loss when it comes to selecting the right tool or partner among the hundreds of services available to them. Cost is just one variable in the selection process but quite often, it is not the most crucial. The reliability of a service, the regional reach, key metrics (such as eCPM or fill rates), as well as the flexibility to adapt to the developer’s needs are sometimes more important than cost, particularly when developers invest time, money and resources to integrate a third-party service with their apps. Developer Economics 2013 aims to assist developers with the selection process by benchmarking a number of third-party tools and services across a range of KPIs. We are also helping third-party tool and service providers receive valuable information on how developer rate their services and their key decision criteria when selecting a service. If you’re a tools vendor being benchmarked, now is the time to spread the word to your developers. If you are a developer your input into this research is very valuable to us and we’d like to invite you to take the survey. Feedback welcome, as always – Andreas #developereconomics #ios #developers #Android #Blackberry #html

VisionMobile’s Business Partner, George Voulgaris will be sitting on a panel about Cross-Platform Innovation at the Smart Cities Summit in London taking place 25-26 September 2012. If you’d like to meetup, get in touch.

[Is Amazon’s Silk an elaborate attempt at avoiding privacy concerns? VisionMobile Product Manager, Stijn Schuermans, examines Amazon’s strategy and argues the reasoning behind a Kindle smartphone and the likely plans for licensing Silk] The second in a series of articles where we expose the innovation frameworks behind Mobile Innovation Economics, this issue highlights the trend of of the Kindelization of tablets: specifically, Amazon’s Silk browser. As in our previous article, we believe that our analysis still holds true almost a year after its original release in December 2011. The Kindle Fire and Silk are important developments that hint to the future of online retailing. The Kindle introduces new techniques to drive foot traffic into Amazon’s retail properties by subsidizing devices, rather than paying for search advertising. In turn, Silk is used to generate deep customer insight and expand shelf space. We expect Amazon to extend the Silk shelf space by licensing this browser to other tablet and smartphone makers, turning handset makers into Amazon Associates. You can also download the full, 5-page report in pdf format here. The Story On November 15th, Amazon launched the Kindle Fire tablet. As we showed in our “Kindelization of Tablets” Mobile Insider part 1, the Kindle Fire is device optimized for a specific use case – media consumption – and designed to drive foot traffic to Amazon’s core retail business. Amazon is much more than a bookseller. In Q3 2011, it derived only 40% of revenues from “media,” which includes books, music, movies, games, software, and digital downloads. Meanwhile, it derived more than half its revenue from “general merchandise“, in more than 10 categories ranging from electronics to groceries and garden tools. Amazon is a fully diversified online retailer. Amazon’s website generates the bulk of its sales. To drive traffic there, it spent over $1 billion in advertising during the first three quarters of 2011. Of that figure, it spent nearly $120 million, or about 11%, on search advertising with Google in the US alone. The Kindle Fire uses Amazon’s Silk browser, with so-called “split browser technology”. As explained by the company at that time, Silk browser software resides both on the device and on the massive server fleet that comprises the Amazon cloud. With each page request, the Amazon cloud processes, caches and optimizes pages for viewing on a smaller, mobile screen. This technique is claimed to shorten the load time of the website and to reduce bandwidth usage. The split browser concept is not new. It is also used by RIM in its BlackBerry browser, in the Opera Mini browser and by Nokia in its Asha range. Has Amazon entered the browser wars? Glad you asked! Intelligence about user behaviour is what drives Amazon’s core business. Routing the Silk browser’s traffic through its own servers allows Amazon to collect click streams — and not just when the user is shopping on Amazon. Such streams are a source of extremely valuable data — theoretically including the prices others charge for products the user is interested in! Deeper customer intelligence allows Amazon to target customers more effectively, maximize margins, and improve customer conversion (and thus increase sales). We now know that Amazon is indeed actively using data from this platform. User intelligence from the Silk browser is used to deliver a new feature (launched September 2012): “Trending Now” webpages, as Techcrunch reports. We also believe that the browser can become part of Amazon’s retail shelf space. Amazon could use Silk to deliver targeted Amazon ads within the browser UI, potentially saving hundreds of millions of dollars in search advertising expenditures. Silk leverages Amazon’s core technological strength: its cloud computing platform. At the same time this new cloud application pushes the company forward on the technological learning curve. This is similar to Amazon’s earlier move to productize their cloud infrastructure as the Amazon Web Services (AWS). Avoiding privacy concerns From a user perspective, the split-browser technology’s value is perceived rather than real. The Kindle Fire’s processor is good enough to render webpages just fine by itself. Furthermore, bandwidth usage is not an issue on a WiFi-only device. Were Amazon to offer 3G or 4G in the future, well… there are already options, like the freely downloadable Opera Mini, for users who really could benefit from split browser technology. Taken all together, it’s hard for the cynics among us to avoid seeing Silk as a slick way for Amazon to slide up a little closer behind unsuspecting consumers. By spinning Silk as a user experience feature, Amazon may simply wish to avoid privacy concerns — which can be significant where user data mining is concerned, as the recent Carrier IQ debacle showed. A new, asymmetric business model. We believe that a new business model is emerging where telecom products and services are used as a complement to retail. By driving the price of telecom products down using subsidies, demand for retail traffic will be stimulated. Commoditizing telecom products will put the traditional telecom players in a losing situation. Let’s see an example. Amazon is likely preparing for the next step: a subsidized, Amazon-branded smartphone. Split browser technology may not be too relevant for tablets, but it is important for mobile phones. In that context, Silk would be a significant asset, as operators embrace browsers that save traffic, one of the cornerstones behind Opera Mini’s success.. Amazon already operates as a virtual mobile network operator (MVNO): users of its Kindle 3G e-Reader download e-books via mobile networks, using data minutes leased by Amazon at bulk rates. Offering an Amazon smartphone would be a natural next step to further drive foot traffic. We predict that Amazon will go even further. It would make sense to license out the Silk browser to OEM manufacturers of smartphones or other tablets. The handset maker would then effectively become an Amazon Associate by a classic affiliate marketing mechanism. Amazon extends its reach and can drive more traffic to its retail operations, while the OEM gains an additional revenue stream as a broker of Amazon foot traffic. Meanwhile, Opera and RIM have had split-browser technology in place for years. Why haven’t they been able to capitalize on a similar approach, monetizing customer insights? Don’t forget to download the full, 5-page report in pdf format here. – Stijn @stijnschuermans #amazon #tabletmarket #kindlefire #Android #mobileinsider

[The latest trend in app development is targeting companion screens, as a way to bridge a multi-screen experience. Guest author Peggy Allbright investigates the future of app development on companion screens -and TV apps in particular – and discusses how TV advertising has found a whole new screen to engage users on.] The Future of TV Apps TV applications are opening up a new business frontier for the mobile industry. But we are still in the most nascent phases of the TV app industry’s formation and it needs to evolve on many fronts. Fortunately, early startup activities are revealing some of the roles that devices, apps, developers, merchandising and advertising can play in this industry, as we’ll see in this article. The industry is well aware that consumers want to be engaged with their devices while watching TV and that many consumers are beginning to use mobile devices and apps as interactive “companions” to supplement the TV viewing experience.  New research released by Google in August provides some of the latest data to characterize this trend. Google found that in a typical day, 77% of television viewers use a second device, such as a tablet, smartphone or PC, while watching TV. More than one-fifth (22%) of these consumers are using the TV and their second device in ways that complement each other, even if it is only a simple search related to the live TV programming. The roles of companion devices and apps While it is obviously still very early in the evolution of TV-related apps, the industry is beginning to reveal how it is addressing this emerging market. Communications tools, which give users a way to engage with others in social networking conversations or activities related to a program while it is airing on the TV screen, are the most common types of companion products and the easiest to implement.   For example, yap.TV enables smart phone and tablet users to interact about a TV program via Facebook and Twitter and receive program-specific content feeds. The device and app complement the TV but do not interact with it. TV programming guides that are more user-friendly and feature-rich compared to traditional TV guides represent another role for companion devices. The i.TV app for smartphones and tablets, for example, has an effective programming guide that allows consumers to use their device to search, organize and bookmark their local TV listings and look up background information on TV shows. Remote control applications that can make it possible for a companion device to replace the traditional remote are also becoming available. AT&T in the U.S., for example, has iPhone and iPad apps that enable its U-verse TV customers to use their devices as TV remotes. The set-top box provider Arris has developed an iPad application that will allow consumers to interact with the set-top box, including accessing the programming guide, controlling the TV and scheduling recordings. Apple wants its iPhone and iPad devices to offer remote control features as part of its vision for Apple TV and AirPlay, as an adjunct to these products’ regular functions of streaming content from the web and iOS devices to TV screens. Game console companies are also revealing companion device strategies. Microsoft’s Xbox SmartGlass, for example, enables consumers to connect smartphones, tablets and other devices with Xbox 360 consoles to control what they’re watching on TV, stream media to the TV screen or deliver companion content for videogames, among other functions.  And Nintendo’s next-generation Wii U GamePad, a tablet-like controller, can function as a TV remote or second TV screen in addition to displaying video game content. How developers are building companion apps The role of the TV app and the level of sophistication needed to make it work will depend on its particular use-case. One practical way of looking at this is to characterize the app as serving a lean-back or lean-forward function. Apps that are used in conjunction with a lean-back experience, like movie-watching, complement the viewing experience but don’t distract from it. Apps that are intended to intensify the consumer’s engagement in a live viewing experience, such as a sporting event, will pursue a lean-forward strategy. Fanhattan, a popular video aggregation, movie and TV-show discovery app for the iPad, serves the lean-back scenario. It enables people to conveniently browse actor bios or synopses of individual episodes of serial dramas while the consumer focuses their attention on the TV screen. The AXS TV Fights app for iOS devices, developed by Mobovivo, is a lean-forward app designed to engage the customer in real-time in conjunction with live martial arts events that are broadcast over the AXS TV network in the United States. Consumers can use the app to chat with athletes, fans and event hosts, vote on fight results, and view their rankings on the device leader board, among other activities. Apps can use the TV and companion screens to collaborate in different ways. Interactive apps geared to TV content, such as the AXS TV Fights app, rely on the handheld device for most of the user’s physical interactions so that the TV screen retains its function as the display for the live TV action. Alternatively, apps can use the TV to display leader board rankings or other content while the gaming activity takes place on the device. The level of app interaction with the TV content can vary widely and will impact the effort needed to build the app. Generic apps that have universal audiences, that are aren’t tied to a specific program or TV provider and that put all the functionality on the device, are easiest to develop and distribute, which can minimize risk. Apps that are closely integrated with live TV programs and need to orchestrate collaboration between the two screens will require customization and partnerships with TV companies. Developers pursuing these types of apps will need to acknowledge that the TV program or cable operator will want the consumer more engaged with the TV, not distracted from it, and create their apps with this in mind. Terry Hughes, managing director of AppCarousel, and Alex Gault, vice president of product development and client services of Mobovivo, both believe that the future of these products and services is a complementary one. Hughes emphasized that collaboration between the two screens will be necessary to create really rich user experiences and in doing so it will make TV more engaging. “TV won’t become irrelevant to people but another way for them to consume things they’re already addicted to, like gaming and social chatting,” he said. Gault took the collaborative notion a step further: “As time goes by, applications will be multidimensional. They won’t be just second screen apps, or just TV apps, they’ll work together,” he said. The merchandising and discovery of apps on TV Application developers already know how difficult merchandising and discovery of their products can be in mobile app stores, and any apps based on TV content will be subject to the same challenges. If the app store is hosted on the TV platform, this situation could be much more challenging. Ben Hookway, founder of Etherow, Ltd., believes that the shared nature of TV screens will make app merchandising and discovery difficult to implement from the TV screen because apps are inherently very personal products. “People tend to do personal things on personal technologies, so the preference for consumers will be: I want to find out about apps on my personal device and then have the apps appear on the TV,” he said. Using search tools to look for apps on the TV will also be a challenge, he believes, citing the market’s resistance to using keyboards for TV remotes and the uncertainty surrounding the market’s willingness to use other emerging techniques, like gestures or voice commands, to perform search functions. “Nobody knows what the behaviors will be for undertaking complex search where some sophisticated input is required,” notes Hookway. The advertising flurry around TV apps Advertising has become essential for building awareness of mobile apps and it will be just as necessary for building audiences for TV apps. The TV environment introduces new opportunities for cross-promotions, which is exciting, but it will also unleash new forms of competition for advertising dollars. Advertising a TV-related app on the TV during programs that pertain to the app is a logical way to build an audience and can be expected, especially if the network or TV program is partnering with the app developer on the product.  And TV networks and brands that offer consumer apps can be expected to use the TV medium to promote goods and services to people who are using their apps. Hughes suggested that companies advertising products like automobiles—which are too complicated to explain in detail or price in an ad—could use their TV ads to promote the apps consumers use to configure their cars for purchase. Alan Knitowski, chairman and CEO of Phunware, said his company is making it possible for consumers to use their companion apps in real time to purchase products they see on the TV. Knitowski and Hughes, as well, noted that the consumer’s location data and other analytics generated by the companion device are of great interest to TV advertisers and will be used to deliver very personalized ads to customers who use TV-related apps. Given the magnitude of the TV advertising market, TV apps will become increasingly important as they gain market penetration and sophistication.  Andrew Burke, former CEO of IPTV solutions provider Amino Technologies and former CEO of BT Entertainment, said that growth of the TV apps market could create a shift in the traditional TV advertising industry. He noted that today, TV app developers can often attract advertising revenues traditionally associated with the broadcast programs they address or interact with. If TV advertisers begin to use the second screen app provider for advertising alongside the TV broadcast, Burke said, “We’ll get a redistribution of revenues in broadcast TV.” Burke noted that the opportunity to monetize additional screens through advertising is the reason that BSkyB invested in the social TV platform provider, Zeebox, earlier this year. The move both illustrates and underscores the importance that advertising on TV apps will have in this emerging industry. Given that advertising is the main revenue stream for TV and cable companies, it would be reasonable to expect more deals of this type as the TV audience increases its engagement with companion devices and apps. #crossscreen #tablets #smartphones #tv #tvapps

[Did you think that the Kindle Fire and the iPad are in direct competition? Think again! VisionMobile Product Manager, Stijn Schuermans, disseminates the tablet market and explains why the iPad and Kindle Fire are augmented product offerings, as well as what differentiates them from other tablets and from each other] This is the first in a series of blog articles where we expose the strategic thinking behind Mobile Innovation Economics. This first issue is a retrospective of the Kindelization of tablets, first released as a report in October 2011, but with predictions that still hold true almost a year later. Back then, we wrote that the iPad (Apple) and the Kindle Fire (Amazon) are augmented product offerings, which differentiates them from other tablets and from each other. They are not in direct competition with each other as they support different use cases and operate on opposite business model polarities. Other Android tablets will continue to struggle as long as they are not use-case differentiated. Almost one year later, our predictions still stand true. You can also download the full, 5-page report in pdf format here. The story Amazon announced the Amazon Kindle Fire tablet device on September 28, 2011. Like the iPad, the Kindle Fire is part of a larger content retail and service offering. Android tablets are commodities almost from their inception, as the basis for competition among them is price. Modular, high-quality components are readily available from suppliers. Device architecture and assembly are well within the expertise of previous PC and consumer electronics makers. Google Android provides a cheap, off-the-shelf operating system, software platform and application ecosystem. Is the Kindle Fire, technically an Android-based tablet, able to capture the hearts and wallets of users? Different business models Two metal-to-cloud players. Both Apple’s iPad and Amazon’s Kindle Fire are augmented product offerings. Apple and Amazon distinguish themselves in the tablet market by being complete “metal to cloud” players. Both companies provide integrated user experiences and complement their device with the retailing of content (books, music, video and apps). Addressing different use cases. The iPad and the Kindle Fire differentiate from each other by addressing different use cases. They are not in direct competition with each other, because they have different value propositions and distinct target segments. Polar-opposite business models. Apple and Amazon extract value from these devices using different business models. Both leverage the economic principles of complements, but they are polar opposites in what is the core business and what is the complement, as is evident by comparing the devices’ profit margins. Sustainable competitive advantage For both Amazon and Apple, providing an augmented product offering results in a sustainable competitive advantage. – Only a handful of companies in the world have sufficient content rights, available across multiple regions, technology know-how and retailing experience. It is the combination of all four that creates the value proposition that Apple and Amazon are offering. – The integrated user experience solves the pain of user journey  fragmentation across the steps of discovering, purchasing, downloading and consuming content. – The heavy customization of the Kindle Fire’s software is directed by a specific use case. This differentiates it from other tablets based on the Android OS. The Kindle Fire therefore is not a direct competitor to other Android tablets. – The fact that content sourcing requires negotiation with tens of major content producers and that content rights are localized cause substantial barriers to entry for content retailers aspiring to produce their own Kindle-like tablet. – Cloud storage and synchronization, only available for content purchased from the respective tablet vendor, provides additional customer lock-in. The Kindelization of Tablets The tablet market has space for multiple augmented products, led by use cases (like the iPad and the Kindle Fire), and one cost leader. This is the Kindelization of tablets. – Current generation Android tablets are not use-case differentiated. Therefore they are forced to compete on price and won’t succeed in capturing substantial market share. Tablet hardware and platform features (in particular the Android OS and app ecosystem) by themselves don’t provide substantial competitive advantages. – Possible content types that can fuel use-case based differentiation for aspiring competitors include: apps, media (books, music, movies, etc.), Internet and user generated content (especially in business contexts). – To execute a cost leadership strategy, gaining economies of scale is crucial. At this moment, the dominant economies of scale are produced by the iPad as it dominates the market, pre-empting a cost leader from emerging. 10 months since launch… As expected, the Kindle Fire was not an iPad killer. CEO Tim Cook stated on the company’s earnings call in January 2012 that the Kindle Fire had no impact on iPad sales whatsoever. Cook said that he looked very carefully at Apple’s iPad numbers and he is convinced that Amazon’s tablet didn’t affect iPad sales. As we predicted a year ago, both devices are differentiated and not in direct competition with one another. In the three quarters following its launch, the Kindle Fire has sold an estimated 5 million units (its initial production order), out of a total of over 22 million tablets sold in this period, according to Asymco. In comparison, the iPad sold over 16 million units in the same period, while Asymco estimates other tablets (presumably mostly Android) at 1,5 million units. These figures support the hypothesis that the iPad and Kindle Fire are the only two differentiated devices. Together they dominate the sales of dozens of other devices combined. Amazon meanwhile has announced a new series of Kindle Fires: an 8.9 inch version priced at $299 for the basic version, a new 7 inch model for $199 and a basic 7 inch model (a direct successor of the original Kindle Fire) for $159. CEO Jeff Bezos said in an interview at the launch event for the new models that Amazon won’t lose money on the devices even if customers don’t use them to buy digital content from its online store. However, analysts have confirmed the complementary goods-based business model, where the profit margins on the device itself are razor-thin. – Stijn (@stijnschuermans) #tablet #google #Apple #kindle #ipad #Android #mobileinsider

Strategy Director Michael Vakulenko will be attending Qualcomm’s IQ 2012 conference on 11-12 September at Kosmos in Berlin, Germany. If you’d like to meet up with Michael, get in touch.

Attending Nokia World? Managing Director Andreas Constantinou will be attending this event on September 5 & 6 in Helsinki. If you’d like to meet up with hm, get in touch.

[Championed by Google, WebRTC allows browsers to make calls from your PC or phone – and it’s disupting both telcos and incumbent VoIP players, from Skype to Viber. Guest author Tsahi Levent-Levi discusses Google’s intentions and the trouble ahead for both telcos and OTT players.] It’s been a tough couple of years for carriers (a.k.a. network operators) who have been fighting off competition from over-the-top (OTT) players such as Skype and WhatsApp, offering services such as voice and SMS over the carriers’ own networks. The impact of these OTT players has been astonishing – whether they’re nimble startups like Viber (with more than 90 million users, making over 1.5 billion calls a month and sending over 2 billion text messages), or large corporations such as Apple, whose iMessage  reaches 140 million users, sending 1 billion iMessages every day. But now an even bigger challenge has appeared on the scene: WebRTC. WebRTC is a technology that allows developers to build real-time communication into web pages. And it’s not just going to affect the carriers – it’s the OTT vendors who now face a real danger because WebRTC brings down the subscription walls of different OTT players. Right now, when it comes to OTT services, if I want to communicate with someone in real time, there’s no way to do so without installing a piece of software – plus, you can’t connect across services, e.g. call a Skype user from Viber. WebRTC is going to change everything How? It places the ability to use VoIP applications within any browser as it’s going to be part of the HTML5 standard. You won’t need a Skype ID, phone number, email address etc. – it will all take place through the browser, you won’t need to subscribe to any service, and you’ll have Google to thank for it. Google bought Global IP Solutions (GIPS), which provided and licensed voice and video media engines to anyone who wanted to develop a VoIP application (including Yahoo and Skype), reducing the effort considerably by offering the real-time multimedia parts of the application “out of the box”. Google didn’t stop at acquiring the technology – it is now using it to commoditize its competition in the communication space and drive browser sophistication even further. Here’s what Google did – Google created WebRTC by wrapping GIPS up with a set of Java Script APIs targeted at web browser developers, which means opening up VoIP technology to millions of developers. – Google open-sourced WebRTC, under a permissive BSD license – this made the technology available to reuse, modify and create derivatives; taking it out of the control of real-time media engineers and marginalized competitors like Spirit-DSP – It took the technology to W3C and IETF standards bodies for standardization to make sure it gets adopted and become an ubiquitous and common component in the browser, and in the process, removing any Google-centric connotations from the technology – It ignored the signalling layer, allowing vendors to use WebRTC in any real time communication settings, regardless of the protocol used for signalling call setup The strategy behind Google’s decision This is a classic “economics of complements” strategy that is commonly used by Google and it’s about to change the entire landscape of communication services for both carriers and OTT players. WebRTC is all about real-time communication from within the web browser, and it’s a crucial part of Google’s strategy because it reduces the barriers of developing rich communication applications by having legions of web developers exposed to WebRTC as a free technology. These web developers will take voice and video services into new domains with new use cases, expanding the richness of communication and making it easier than ever before to start your own VoIP service using WebRTC. For Google, this decision is simply about strengthening the Web and the web browser to reduce the gap between native application capabilities, whether they’re on the desktop or in the mobile realm. The real value for Google lies in allowing them to serve more ads and mine more insights out of people’s browser behavior – these are things that Google treasures. Such a move can weaken Microsoft along with its Skype acquisition and hurt Apple’s FaceTime service. The usual OTT business model OTT vendors base their strategy around reaching as many users as possible, offering them a compelling free service, locking them into it and then trying to monetize it via four main approaches: Advertising, done by ooVoo, Skype and others Connectivity to PSTN (Skype make most of their money out of connectivity to PSTN and the carrier’s phone numbering scheme) Value-added services, such as multipoint video calling; (done by ooVoo) Cashing out upon acquisition (which is what Viber is hoping to do) OTT vendors make their money out of mass usage of their system, and for that, they prefer having users work within the boundaries of their service, and not letting them interact with competing OTT offerings: (Just try calling from Viber to Skype. You can’t.) Goodbye, walls – hello to a new way of communicating WebRTC literally tears down the silo’ed walls of OTT vendors by removing the need for a physical client for each OTT vendor and for an OTT user ID (such as your skype ID or email address). Since there is no specific signaling, each vendor can decide whether (and how) to use user IDs. It will change the way we communicate, for example: – Think of a local insurance agent in Paris looking to lure new customers: he sets up a website, invests in AdWords to bring leads into his sales funnel, and then routes these leads to a contact page – or a phone number. With WebRTC, he can close the loop and have the person at home access his website and contact him directly from the web browser – to wherever the insurance agent is. No OTT vendor required. – Or a niche social network website for backpackers, trying to connect people planning a trip with one another. They won’t need to exchange user IDs or phone numbers, or install anything – with a click of a button they get connected through the social network website itself. There are already startup companies offering services using WebRTC. These include Bistri, Cloudeo, FrisB, TenHands and TokBox. As with the current web paradigm of signing in for new services using existing social media accounts, many of the new vendors who will adopt WebRTC technology will also opt for that model, removing the need for a unique service ID. And what about the carriers? Is WebRTC a threat or an opportunity? Well, it’s both – it just depends what the carriers do with it. It does mean that carriers face further disruption to their communication services but in parallel, there are also sizeable WebRTC opportunities. However, in order to seize them, carriers will need to embrace the web developer community and deliver value to WebRTC-based applications and services, curving itself a place in this vibrant ecosystem. Web developers are already looking for WebRTC solutions they can stitch and mesh into their applications. Carriers can actually become a vehicle for innovation vehicle by offering: – Session-based charging for WebRTC. As with any carrier service, they can charge customers for the WebRTC sessions they make: WebRTC communication passing through the carrier’s network can be tracked (through DPI and other means) and then charged for, probably against a bucket of minutes/sessions in the customer’s plan. – Merging RCS with WebRTC. RCS (also known as Joyn), is the carriers’ instant messaging solution. By adding WebRTC to RCS, it can offer out-of-the-box programmable multimedia capabilities with no need to look into additional protocols such as VoLTE. – Quality of service assurance. Need the police? Other emergency services? A business-related call? A carrier can assure the quality of service for that call and make sure it gets the proper priority over its network (at a cost, of course…). – Infrastructure. WebRTC is just a protocol – making a solution out of it requires a lot of additional components, most of which are server-side. A carrier can offer the server-side infrastructure as a service to customers. – PSTN connectivity. Carriers have their own existing voice communication network, along with connectivity to PSTN landline services. They can offer WebRTC termination to PSTN and GSM, bridging the gap between these voice services. – WebRTC signalling. WebRTC offers only the media component with no signaling and you still have to reach a person via WebRTC (which is where the carrier comes in – it provides the connectivity for the users). As much as they might want to, carriers are never going to be able to return to the golden revenue days before OTT players arrived on the scene, but WebRTC will allow them to stop the trend, (and maybe even reverse it a little bit), depending on how fast and how far they’re going to act. AT&T, T-Mobile, Deutsche Telekom and Orange are all examples of major carriers who have been quick to recognize and start to investigate the opportunities that WebRTC presents. The question is… how long will it take for others to follow? #mobileoperators #ott #webrtc

We’re proud to present our latest infographic, The Rise of the new App Economy – presenting some of the key findings and insights from our Developer Economics 2012 research report (which is available for free download here). Among other insights, the infographic presents the most popular mobile platforms for developers (and how they’ve gained or lost Mindshare in the past year). Android and iOS continue to be the most popular platforms, with a Mindshare Index of 76% and 66% respectively, while mobile web takes third place. You’ll also find the most popular screens that developers are currently targeting. Some 85% of developers today are targeting smartphones and 51% are targeting tablets – but, despite the hype, just around 8% of them target the TV screen. The infographic also presents some sad truths about developer monetization – and how 1 in 3 developers are living below the “app poverty line”, uncovers which are the most cost-heavy platforms to develop on on and takes a look at the supply vs. demand of apps at a regional level. Like our infographic? Feel free to embed it (embed urls below) #ios #developer #monetisation #mobileweb #Android #windowsphone #Blackberry #mobiledevelopment

[Apple and Google dominate the app store game – but only in terms of size. Senior Analyst Andreas Pappas discusses the key success factors for app stores, why Google is lagging behind and how Amazon fits in the whole picture] With Amazon challenging Google’s app market and Apple allegedly offering the best monetisation potential, several developers and analysts have put these claims to the test by comparing monetisation data across the three app markets. Differences in app store monetisation potential can have a significant impact on developer mindshare: developers will seek to leverage platforms that will make them more money. According to mobile app analytics firm Flurry, Apple apps lead the revenue table, while Amazon and Google apps generate 89% and 23% of Apple revenue, respectively. Flurry’s analysis only considered in-app purchases for the same app-basket for each platform. However, another report by game developers TinyCo, suggests that ARPU for one of their games is higher on Amazon than on Apple, while Google Play revenue is just 20% lower than Apple. Our analysis aims to explain the differences in monetisation and to identify key success factors in app markets. App stores are key to an ecosystem’s health Apple and Amazon have strong retail DNA and have been building a solid, direct business relationship with end-users for several years. Google has traditionally focused on B2B relationships with little exposure to retail. People associate Google with “free goodies” and not paid products as in the case of Apple and Amazon. Google has limited experience in creating an engaging shopping experience that would be on par with Apple’s and Amazon’s and this is evident across the entire shopping experience: from the storefront to product curation and check-out, Google is outperformed by its rivals. If Amazon and Apple app stores were high-street stores, then Google would be a flea market, although the upgrade to Google Play signals Google’s desire to move away from this model. It may be argued that app stores do not constitute a core revenue source for their owners so Google doesn’t need to be good at this since they still profit from ads. However, such a view is misleading and perilous: providing and increasing monetisation opportunities for developers is vital to an ecosystem’s success. Forget that and you can forget about your developers too. Carrier billing reduces payment friction Frictionless payment is a key element of any shopping experience, particularly so in mobile where establishing a billing account on the spot is a somewhat cumbersome process. Having access to most of their customer’s credit cards, Amazon and Apple have a direct billing relationship with their customers, a key element that Google presently lacks. This places Amazon and Apple in a better position when it comes to converting users to paying customers. If Google wants to increase conversion rates they must establish billing relationships with their customers and credit cards are not the only way. Carrier billing is an alternative method that can significantly reduce payment friction and create new opportunities in emerging markets, where credit cards are scarce. Google has already integrated carrier billing into Google Checkout in several markets such as Japan and S. Korea. In those countries developers offering freemium apps, such as Com2us, are seeing conversion rates of up to 10% while in the US where Google lacks carrier billing integration the conversion rate is only 3%. As smartphone share proliferates in emerging markets, carrier billing is bound to become increasingly important for app monetisation, creating opportunities for platform vendors, operators and developers. It pays off to treat all platforms as equals Developers’ attitudes towards the platforms they develop on have a significant impact on monetisation: the amount of time and effort that a developer spends on each platform will reflect on app quality and user experience. A developer focusing most of their effort on iOS may not be able to provide a similar level of quality for the same app ported to Android. As game developer TinyCo points out, when they were spending most of their time developing for iOS, iOS monetised better than Android. Their Android versions were simply not as good as the iOS versions, hindered, to some extent, by increased Android fragmentation. They managed to change this by building an optimised cross-platform game engine that allowed them to code once for both platforms. As a result they experienced increased conversion rates for both Amazon & Android, on par with Apple figures. In summary, it pays off to invest in each platform you develop on. If you cut corners, this will reflect on your profits. Target the right audience To some extent variations in monetisation depend on demographics: Apple’s high-end device mainly targets high-spenders rather than less affluent emerging markets, while S. Korean teenagers are mad about games. Also, different devices lend themselves to different user experience: a Kindle Fire is likely to attract more in-app content purchases than a Samsung Galaxy Mini. It is vital for developers to identify and target the right market and not expect their apps to monetise uniformly across platforms and market segments. However, before one blames demographics for their app’s poor monetisation on one or the other platform, they should ensure that they have provided a level playing field: is the user experience the same? are in-app purchases easy on both platforms? is one platform lacking some features? As demonstrated in the case of TinyCo discussed above, the target market for a particular app can have a uniform behaviour across platforms if the developer invests the time and effort to provide a consistent user experience. In Developer Economics 2012 we asked developers to assess monetisation of their main platforms and Blackberry came out on top in terms of average revenue per app-month, with 4% more revenue per app-month than iOS. Android revenues were 75% of iOS revenues, which is closer to the figures provided by TinyCo than to those provided by Flurry. However, Flurry’s figures only concern in-app purchases, a revenue model that is much less popular on Android (used by 20% of developers) than on iOS (used by 36% of developers), which could explain the large variance in terms in-app revenues for the two platforms. The discrepancy in the figures presented across different studies suggests that there are several ways to look at monetisation potential. For example, in the Developer Economics 2012 research, while Blackberry topped the table on average revenue per app-month, on average, a higher share of iOS developers earned over $500 per app-month than Blackberry developers, i.e. income distribution was fairer on iOS. (if you’re interested to see how other platforms fare in terms or revenue per app-month, check out our Developer Economics Visualisations – 19 interactive graphs showcasing key data from the research). It is clear, however, that Google Play is lagging behind Apple Store and Amazon in terms of monetisation and there is no evidence to the contrary. If Google and Android developers want to reduce the monetisation gap, they need to address the fundamental issues discussed above: improve the shopping experience, reduce payment friction, treat platforms as equals and target the right audience. #amazon #appstore #googleplay #Apple #mobileapp #Android

Join VisionMobile and BueVia in a Google Hangout (July 23, 8pm GMT) to discuss our recently published Developer Economics 2012 report. The hangout will include VisionMobile’s Andreas Constantinou, BlueVia and developers from around the world. Want to join? Hangout here. Update – You can view the video and slides from the Hangout here.

Join VisionMobile and Red Bend Software in a webinar (July 19, 2 p.m. UK time) about how Mobile Software Analytics will enable mobile operators, device manufacturers and enterprise administrators to uncover valuable trends and insight into application usage and software performance from the perspective of the mobile device itself. Want to join? Register here

[The game of ecosystems is in full bloom, with each player attempting to draw as many developers as possible around their platform. As we finally see some signs of consolidation, VisionMobile Senior Analyst Andreas Pappas, talks about the rules of engagement and identifies the winners and losers in this game of ecosystems in 2012. Also, we’re proud to introduce VisionMobile Visualisations – live, interactive graphs with tons of data from the Developer Economics 2012 research!] Below, we’d like to present a very small sample of our newly-launched Visualisations, depicting how Intentshare varies by the platform developers choose. The sample contains just one variable – for more filters and full functionality, visit visualisations.visionmobile.com INTENTSHARE INDEX Percentage of developers planning to adopt each platform, irrespective of which platform they’re primarily using now. The graph above is just a sample of what our new Visualisations can do – visit visualisations.visionmobile.com for full functionality. Just bear in mind that you need a minimum resolution of 1024 × 768 px to access. Developer Economics 2012 (free copy available here, thanks to the sponsorship by BlueVia) confirmed that reach remains the strongest motive for platform selection, as indicated by 54% of developers. With Android and iOS accounting for 82% of total smartphone sales in Q1 2012, according to IDC, these two platforms can now guarantee near ubiquitous smartphone reach for developers using them. As a result, developers’ mindshare is being increasingly dominated by these two platforms: Android is being used by three-quarters of developers and iOS is being used by 66% of developers. Mobile development market is consolidating but still in early stages This duopoly has resulted in development platform consolidation: in 2012 developers are using 2.7 platforms concurrently compared to 3.2 platforms last year. However, with less than 20% of mobile subscribers currently using smartphones, there are still opportunities for competitors to build up market share in the years to come: Ericsson estimates that the smartphone market will exceed 3 billion units in 2017 so the addressable market for all contenders is significantly larger than the current installed base which is slightly less than a billion. So while developers are adopting the platforms with the highest reach, they are also keeping an eye and hedging their bets on the long-tail of platforms, i.e. those with lower reach but which allow them to extend their footprint to a wider user base or that will allow them to reach niche and underserved markets now and in the future. This is evidenced by Developer Mindshare for mobile web, Windows Phone and BlackBerry and the high Developer Intetshare for Windows Phone. Windows Phone is the new cool: While Windows Phone sales continue to disappoint, a year on, with 2.6 million devices sold in Q1 2012, according to Gartner, interest among developers continues to build up. The Developer Economics 2012 survey indicated that irrespective of which platform they currently use most, the majority of developers who plan to adopt a new platform, plan to adopt Windows Phone (57%). Overall, 42% of developers using iOS and Android indicate that they plan to adopt Windows Phone and while the intention is slightly stronger among developers using mobile web (44%) or other, less popular platforms, intention doesn’t seem to vary significantly by the platform developers currently use. At the same time, seeing as last year’s 32% Intentshare for Windows Phone added only 1% to this year’s actual Mindshare, it becomes clear that converting intention to adoption is not a given. Windows Phone is indeed the new cool, a platform generating increasing developer buzz and anticipation; but to turn the buzz into developer buy-in at the levels of iOS and Android, actual adoption must follow soon or fall flat. To attract more developers into Windows Phone, Microsoft also needs to rethink its tool strategy. At present, developing on Windows Phone 7 requires a Windows PC, which presents a barrier to entry for iOS developers and the many web developers who are using a Mac. Support of WP7 development on a Mac is therefore crucial for reducing the onboarding friction for iOS and web developers. There are indications that Windows Phone sales are picking up in China and the US although the growth is nowhere near the rates that iOS and Android devices achieved in their first years since launch. Survival of the fittest: platforms disappearing into oblivion As with previous Developer Economics reports, we measured each platform’s defection rate, i.e., the percentage of developers who recently abandoned or plan to abandon each platform. BREW and Symbian fared the worst. They do not lack scale; on the contrary, BREW is still strong in the feature-phone segment, and Nokia shipped in four times more Symbian devices than Windows Phone devices in Q1 2012. Yet, both ecosystems lack the ingredients necessary to generate the kind of network effects enjoyed by iOS or Android. BREW, the first mobile platform with an app store (launched by Qualcomm in 2001) is approaching the end of its shelf life. After some initial success attracting carrier attention, BREW failed to compete against low-end Android designs targeting similar market segments. However, developer exodus is a much greater and more measurable testament to the terminal decline of BREW than any other market indicator: 60% of developers now using BREW indicate they plan to stop using it. We therefore believe that Qualcomm is quietly preparing to discontinue or sell the platform. Not surprisingly, following last year’s burning-platform drama by Nokia, Symbian showed the second-highest rate of developer attrition among the platforms in our survey. Developers see little reason to invest time or effort in the platform, given its effective end-of-shelf-life somewhere in 2013. Symbian developer abandonment rate has rapidly accelerated from 39% of developers last year to 52% in 2012. Clearly, developers heeded Nokia when it unambiguously declared it would bet its smartphone business on Microsoft. Despite substantial handset shipments – 11 million units in Q1 2012 – and the promise of a completely revamped BB 10 platform in the second half of 2012, BlackBerry is very close to becoming an endangered species. RIM has had significant difficulties competing with iOS and Android as its USP, based on messaging, is becoming increasingly irrelevant with email and instant-messaging now being commonplace features across all platforms. As a result, RIM experienced a 25% year- on-year decline in shipments in Q1 2012, with investors pressing the company to break up and sell its assets. BlackBerry is being abandoned by a relatively larger number of developers that use it as their main platform (14%), when compared to other major platforms and a large number of developers overall (41%). There are still developers that are loyal to BlackBerry and the platform continues to bring in more revenues on average than any other platform (4% more than iOS and 41% more than Android). Development costs are also significantly lower on BB OS: we calculated that the average development cost for a BlackBerry app is around $15,000 while Android and iOS apps cost around $22,000 and $27,000, on average, respectively. But unless RIM manages to reverse the downward trend in sales, these revenue and cost advantages will soon become meaningless. In yet another sign of industry consolidation, Samsung’s Bada platform is high on the list of platforms being abandoned. Some 49% of developers currently using Bada plan to drop it. Bada is Samsung’s application platform for low end smartphones, with 20 million units sold cumulatively since its launch in 2010. In Q1 2012, Bada shipments grew only 10% year-over-year, reaching 3.8 million devices. This lacklustre growth has developers flocking away to platforms seen as safer investments. Other challenges, for Bada, include its immaturity and substantial bug count, low-end smartphone hardware, and a lack of consumer pull leading to missing “hero apps,” like Angry Birds. The resulting mindshare churn should ring alarm bells at the Korean HQ, since Samsung needs Bada as a negotiating card against Google’s Android. With a weakening developer ecosystem, Bada looks to be niching itself to mostly Korean developers, and Samsung risks losing bargaining power as a result. Mobile development has become commoditised Contrary to popular perception that has developers of different platforms on opposite camps, in practice developers will overcome any barriers (e.g. learning curves, monetisation) and adopt any platform that gives them reach. Amidst the debate over the relative merits and drawbacks of iOS and Android, interestingly, most developers use both at the same time: 72% of developers that use iOS, also use Android, while 64% of developers using Android also use iOS.  With switching costs and learning curves on mobile development being lower than ever, developer mobility across platforms is higher than ever and improvements in cross-platform development will increase mobility even further. In such an environment, platforms that provide reach (Android, iOS) will retain and attract developers as long as they continue to provide reach. However, platforms with lower reach (e.g. Windows Phone) will only attract developers if they extend their reach and at the same time provide additional incentives to compensate developers for the platform’s reach-deficit. In order to do so they need to identify the developers they need to get on-board and find the right incentives to attract them. This becomes an almost impossible task without using a proper segmentation model. However, traditional segmentation models, based on the developer career stage (student vs pro), demographics (income or age), technologies (programming language or platform) or app category (games vs enterprise developers) rarely yield actionable results. An alternative is to take a “job-based” segmentation approach. As Professor Christensen defines it: “A job is the fundamental problem a customer needs to resolve in a given situation.” In Developer Economics 2012, we used both empirical knowledge and quantitative data from our survey of 1,500+ developers to arrive at a definitive job-based developer segmentation. Our segmentation model consists of eight developer segments, divided according to developer motivations, the platform they primarily use and their decision criteria for adopting a platform, tool or API. These are: the Hobbyists, the Explorers, the Hunters, the Guns for Hire, the Product Extenders, the Digital Media Publishers, the Gold Seekers and the Corporate IT developers. We believe that this segmentation model is instrumental for both developers (to understand their own competitive ecosystem) and for companies producing platforms, tools or APIs (to understand who the right developer is and how and where to approach them). #mobileapps #ios #mobileweb #mobiledeveloper #Android #windowsphone #Blackberry

[Why are publishers abandoning apps and betting on the Web? VisionMobile Senior Analyst Andreas Pappas looks into the flight of magazine publishers from native iOS apps to web-based platforms] The Story When the iPad first appeared on the market, publishers immediately saw its potential as a media-consumption device. Indeed they were right: iPad (and tablet) users are more likely to buy content than smartphone users. What they were not right about though was that native apps were the right vehicle to break into this market. A number of high-profile publishers have been recently abandoning native apps in favour of the mobile web. Among these are the Financial Times which moved to mobile web last year and MIT Technology Review magazine which is migrating this year. These moves come after investing significant time & money in developing native apps, and seeing their high-expectations failing to materialise. Native apps are not for everyone Publishers flocked to the iPad thinking that developing and maintaining a native app would be quick, and cost-effective. The reality has been far from this: content providers can rarely support in-house app-development, resorting to expensive outsourced development. They often struggle to support the number of different formats for their content: a version for the web, for the iPad, landscape for the iPad, for Android, and one for small screens. Mobile web offers a lower-cost alternative that can better leverage in-house resources and minimise device & screen fragmentation effects, allowing publishers to reach much further at a lower cost. However, native solutions do exist: native platforms such as Mag+ are purpose built publishing services that lack in flexibility but have a significant cost advantage compared to proprietary native apps. Apple’s gatekeeping function is not always welcome Apple’s role as the gatekeeper in the tablet market affords it considerable bargaining power against publishers. Apple has been leveraging this power to retain control of user data and the billing relationship, maintaining the 30% revenue cut on content purchased on their platform. The move to Newsstand, Apple’s separate distribution channel for publishers, brought some concessions on Apple’s part: they allowed consumers to opt-in for sharing their data with publishers, allowed subscription-based purchases and avoided double-charging for content already purchased through the publisher on independent platforms (e.g web). Nonetheless, the 30% revenue cut still hurts publishers as their profit margins are often much thinner than this rate. As a result some publishers have to either sell Newsstand content at a loss or charge more than they do on other platforms. If their business can absorb the loss, and benefit nonetheless, then it makes sense for them to continue offering their products through Apple’s store. However, as the cases of FT and MIT indicate, this is not always the case and other solutions should be sought. The way users consume content has changed Aggregator services such as Flipboard and Longform are changing the way users consume content. In such an environment publishers struggle to engage users in the way that print publications did, i.e. in reading an issue cover-to-cover. In addition, publishers often cannibalise their content by offering it on a number of platforms, most commonly on the web, and quite often for free, or at least cheaper as in the case of Wired magazine. This dilutes the value proposition for consumers: why pay for the native iPad app when I can get it on the web, which I can also access on the iPad, in some cases at lower or no cost. While native apps can probably provide a better, customised and personalised user experience than web apps, the difference rarely justifies the added cost, but most importantly does not justify the price premium. – Andreas Pappas Looking for more insights? Check out our Mobile Insider series; each issue delves into a single trend and strips it down to its essential components, giving a full report in an easy-to-digest, 5-page format. #mobileapps #publishers #web