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.

Gone are the days consumers choose mobile phones based solely on their features and functions. New research by GfK[1] shows that smartphone owners in key global markets buy into the ‘experiences’ created by the mobile ecosystem and the majority (56%) are ‘keeping their options open’, when deciding their next smartphone purchase.

Every quarter brings new reports of rapid growth in smartphones sales but a key question left unanswered is what is actually driving purchase in the high end smartphone category? Understanding drivers of purchase is naturally a complex subject due to the sheer number of factors that influence consumer decision making. Looking back as little as 3 years ago, the primary focus for many consumers was acquiring a well designed phone packed with the latest technology such as Wi-Fi, GPS, high resolution camera and so on. In recent years, however, development in mobile hardware has slowed and is arguably becoming less important. Of course, consumers still want good looking handsets with the latest technology, but with so much choice and less differentiation the mobile handset is potentially becoming a more commoditised purchase.

Smartphone operating systems (OS) have become arguably ‘the’ most critical factor in the mobile device market in recent times. Whilst obviously being crucial to the functional capabilities of a mobile device, they are now also seen as the cornerstone of its revenue potential. This has brought about a fascinating battle amongst the biggest names in the mobile and Internet markets, all looking to ensure their OS is the market leader. The result of this battle is likely to have a significant influence on who will dominate these markets during the next few years.

Phones with advanced operating systems now account for approximately 70% of the contract market in the UK*. This has led to a significant market share decline for Symbian, which has for some time been the most prevalent OS in the market, and increased competition amongst the four key operating systems at the higher end of the market – RIM’s BlackBerry OS, Apple’s iOS, Microsoft’s Windows Mobile, and the newest OS to the market, Google’s Android.

In the PC market, Microsoft’s Windows OS is as common as the mobile phone in your pocket. However, Windows Mobile has struggled to capture the imagination of both consumers and businesses. In fact, with a rapidly declining 5% [1] of the global smartphone market it’s fair to say that relatively speaking Windows Mobile has been a horrible failure. But that’s all about to change.

Recent research by GfK NOP [2] shows that interest in Windows Phone 7 (the catchy name given to the successor of Windows Mobile 6.5) is strong. Almost one in five (18%) of UK mobile phone owners say they would consider a Windows Phone 7 (let’s go with WP7 from here on in) handset (available on HTC and Samsung devices among others) when they next come to renew, upgrade or buy their next mobile phone. Of course current smartphone owners display much higher levels of interest (32%). What’s more, Microsoft will be pleased to hear that of all smartphone owners, those using Google’s Android will be most interested (41%) in WP7. So what’s changed?

Apple is a leading force in the smartphone market because they simplify services and enable people to fit their world in their pocket.

Yesterday, Steve Jobs announced the latest iPhone 4 at WWDC but what struck me was the way he structured his presentation. Jobs focused early on about the success of the App Store for both consumers and developers. There is now 225,000 apps available, 5 billion downloads and Apple has paid out $1 billion dollars to developers. Apple has created a vibrant market place for mobile apps and services with more big brands to launch later this year. That is success unrivalled by anyone.

To cover all this first was smart because Jobs was focusing on the services and the benefits of owning (or developing content for) an iPhone. After all the device features are becoming less important over time whereas services and content is increasingly driving consumer demand in the smartphone (as opposed to the feature phone) market.