There’s an app for just about everything

‘There’s an app for that’ – with thousands of new smartphone apps being developed every day, this phrase (coined by Apple in 2009) is beginning to seem a reality.  Our research indicates that 80% of smartphone users have experienced downloading and using apps. However, with today’s fast paced technology market, there are signs that apps are already moving into a new phase.

The future is smarter, connected and integrated apps

So far, apps have successfully extended the functionality of smartphones. Instagram is a great example, giving smartphone-camera users a whole new experience when taking photos. Yet apps have their limitations. Most tend to work in isolation and there is currently limited ability to link and connect different apps. The future of apps will depend on their ability to work seamlessly together to provide a rich and integrated experience.

The evolution of messaging

Since the advent of SMS messaging two decades ago, this method of communication has become a solid revenue stream for operators with over 350m SMS messages sent every day in the UK alone[1]. More recently, the rapid adoption of smartphones and the increasing demand for mobile data – which soared fortyfold in the three years leading up to 2010[1] – means a new platform has been created for ‘always-on’ instant messaging. Mobile operators are already experiencing and acknowledging a change in consumer needs with the development of high-speed, 4G networks that will enable and facilitate VoIP[2]. They will also need to brace themselves for a shift in demand towards the enhanced experience provided by mobile instant messaging services.

Voice over IP (VoIP) has gained significant momentum in recent years and now has a prominent place in the mobile ecosystem, forcing mobile network providers to take a different stance towards this technology.

The changing bargaining power

While mobile voice still remains the cash cow for network carriers, in the EU in particularly there are signs of stagnation and growth is now primarily driven by data revenues and the sales of Smartphones. The need to upgrade text and voice users to Smartphones and data plan deals has shifted the balance of power amongst the forces that define the competitive landscape in the mobile sector.

For the last year or so, 3D has been one of technology’s hottest topics, with the success of 3D movies paving the way for TV manufacturers, to the extent that two in five UK adults now express an interest in buying a 3D screen for their home. But what is the opportunity for mobile device manufacturers?

There has certainly been a lot of market activity (e.g. Sharp’s unveiling of a 3D mobile phone display) in anticipation of consumer demand, but will public enthusiasm migrate to mobile phone devices?

A recent GfK Technology survey, found that 12% of mobile phone users were interested in 3D photos and 8% were interested in 3D gaming. It is likely that the latter and any apps that embrace Augmented Reality or which offer the opportunity to enhance user generated content are going to drive most interest.

A recent GfK NOP Technology report shows consumers’ love affair with mobile phone applications has turned from a dalliance into a settled and dependable relationship. With a fifth of smartphone users downloading more apps than six months ago, mobile applications may soon replace browsers as the main gateway to the web for mobile phone users.

To read the full GfK NOP Technology report click here

The launch of the Wholesale Applications Community is potentially a substantial challenge from network operators to the dominance of Apple. Managing consumer demand and the consumer experience are likely to be key.

Recent news that 24 leading network operators are launching The Wholesale Applications Community, a mobile apps store which aims to make it easier for developers to build and sell apps “irrespective of device or technology”, begs the question of how consumers will respond.

It’s certainly a tough market for network operators with recent research by GfK Technology showing handset manufacturers dominating the apps market and indeed, a recent report by Gartner gives the somewhat startling statistic that Apple is responsible for 99.4% of mobile apps sales in 2009.

The four key factors that GfK Technology consider to be critical in driving the potential success of this sort of store are:

We often seem to think that the Apple App Store has a dominant market position for mobile devices helped in no small part by the extensive press coverage it seems to attract. Recent research by GfK Technology (1,000 online interviews conducted in Jan 2010) suggests, however, that the apps store market is in reality more varied with a wide range of stores competing for business.

The Apple Apps Store does indeed lead the market but with 39% of consumers (that downloaded an application for their mobile device in the last 3 months) using it rather than a convincing majority. That’s not to say that they are better than other stores at extracting money from consumers or encouraging repeat visits but in terms of where individuals do their mobile apps shopping, they still have some way to go before taking the majority of the market.