Apple Surpasses Microsoft

By Barbara Gengler

Microsoft, which has been slow in responding to Apple’s advances, was recently taken by surprise as Apple edged past the software giant in market capitalization.

Recently, Apple emerged with a market value of roughly $222 billion compared with Microsoft’s $219 billion. Apple spearheaded into the second highest-valued American company directly behind Exxon Mobile, which was valued at $278.6 billion.

Enderle Group analyst Rob Enderle says against Microsoft, Apple funded better, executed at a higher level and marketed the benefits of the product more successfully.

“Microsoft actually had what should have been a more attractive service, retailers liked them better and Microsoft had a more robust product, but Apple out executed them on marketing to an incredible level,” Enderle says. “Oh and Microsoft chose to fight Apple on Apple’s turf by bringing out a hardware device and that is always a really bad idea.”

The Mac vs. Windows campaign directly targeted the Vista launch problems, kept them front of mind even after they were fixed, Enderle claims, adding that Microsoft’s failure to market the improvements drove the positive result for Apple.

“Apple’s marketing program took reports of problems with Microsoft Vista and blew them out of proportion in an attack worthy of a first-tier political campaign,” Enderle says.

The Mac vs. PC campaign ran directly into the Vista launch and is recognized as being one of the most effective of its type. Apple not only helped slow sales for Windows, but Vista also never really recovered while Apple tripled their market share, according to Enderle.

Apple competes hard, likely knows more about many internal programs going on in competitors’ firms than related executives do and has the ability to develop and execute a strategy that is repeatedly successful against these competitive threats, he says.

“The iPod, AppleTV, iPhone and iPad were all big risks and only the AppleTV didn’t meet expectations and they haven’t stopped funding or developing it,” Enderle says. “Microsoft, on the other hand, takes few big risks, tends to under resource those it does and then wonders why these smaller risks are unsuccessful.”

He pointed out Mira was ignored, Origami was unfinished and Windows Media Server was crippled and underfunded as was Media Center, Media Extenders, Portable Media Center, Windows Mobile, Zune and Chrome Effects. And while Microsoft has often come up with ideas first, Apple generally executes better and walks away with the benefits.

“Apple enjoys lower customer churn, higher margins and owns the most profitable segment in the PC market,” Enderle says. “When Steve Jobs brought out the iPhone, retained control and drove the same customer focus, subordinating the needs of the carriers to the needs of the phone users, Apple became the most profitable vendor in this segment.”

Microsoft has increased the complexity of its customer mix and often seems unable to differentiate between the conflicting needs of users, IT shops, retailers, OEMs and government buyers, Enderle says, adding the end result is that the related products have a tendency to miss the needs and expectations of all groups because there is no real focus on any one group and users’ needs and expectations are often in conflict.

“If Microsoft wants to move ahead of Apple again, they have to cease accepting failure as an acceptable outcome and either resource efforts to levels where they can’t fail or recognize that if you aren’t going to play to win, there isn’t much point in taking the field in the first place,” Enderle says.

Separately, he gave the example of how Apple actually torpedoed the HP MP3 player by licensing the iPod to HP and then reneging on all of the promises they had made.

“They underpriced the HP product, wouldn’t let HP use any color but white, and wouldn’t allow transcoding even though they had indicated all of these were possible initially to close the deal and the contract locked HP out of doing their own player until Apple had locked up the market,” Enderle says, adding it was “one of the dumbest things I’ve ever seen HP do and one of the smartest from Apple. If Apple were to do something similar today they’d have anti-trust problems up the wazoo (technical term).”

While Microsoft still leads Apple in sales, there is every likelihood that Apple’s income could surge past Microsoft’s in the next few years.

Apple CEO Steve Jobs took the stage during the company’s Worldwide Developers Conference in early June. Jobs previewed the successor to its smart-phone line, the iPhone 4, which features a faster processor and videoconferencing, which the company calls FaceTime and includes a bigger battery and two cameras. As it continues to deliver its innovations, Apple has become the dominant technology company of this decade.

Question for iPad Competitors: Now what?

By James Zipadelli

Now that it’s been a few weeks since the iPad has launched - and the numbers look good - two questions come to mind. First, how can this technology be used to benefit iPad’s competitors?

In this YouTube video, HP has a “Slate Device” concept. HP declined request for comment and would only say that they have “yet to announce pricing, specs, etc. for the device.” HP’s latest products can be seen on their blog. A spokesman from Dell says they have shown some prototypes “but there is nothing in market” that competes with the iPhone. Microsoft directs people to CEO Steve Ballmer’s remarks at the Consumer Electronics Show in January. A Microsoft spokesman says the company plans to release slates and touch screen computers later this year.

The iPad also has some kinks to work out. Israel banned imports of the iPad out of concerns that its network “could disrupt other devices” because local transmitters have a lower power than in the US. Some colleges and universities, such as Princeton and George Washington University, have raised similar concerns. Ashish Chordia, founder and CEO of  Appdiscover.com, thinks that Apple will fix the problem quickly.

“They have the ability to take what is already out there - in some ways they are groundbreaking innovations,” Chordia says, referring to Apple. “Nokia had 800 series device that you could argue was a souped up iPhone. Of course they have great marketing and cult following, but they make it a little bit better and useful for the user. And I’m sure they’ll do more of it in the future.”

Chordia says iPad’s competitors can compete, but they need to have an App store.

“We feel that Apple has a big head start with the apps and the content that is created,” Chordia says. ” HP acquiring Palm will create that competition. Smaller players can be big players by adopting the Android player. There is an India-based startup and their Android based device is called Adam.”

Gartner analyst Angela McIntyre says Apple took the existing technologies that were already out there and brought them together with the iPad.

“The iPad is in between the smartphone and a PC in terms of computing capability,” McIntyre says. “What Apple saw in the market was a gap in the computing spectrum between smartphones and PCs that was starting to close.  Connected consumer electronics, such as e-readers (Kindle) and portable media players, e.g. iPod Touch and Zune, were gaining traction with consumers to fill that gap.  Apple designed a product, the iPad, with a high quality user interface that can serve as a media player, e-reader and has many functions of a mini-notebook (netbook).”

“Their App store and itunes store is second to none,” McIntyre adds. “They have a strong ecosystem of developers and applications that can take advantage of touch.”

Is the iPad an “i-fad” or the future? Rick Singer, CEO of GreatStartups.com, says it remains to be seen, although he added, “I’m sure Apple has five or ten versions planned.”

“I just ordered my 13-year-old son an iPad and he’s fascinated by the latest technology,” Singer says. “The iPad is really in an unfamiliar territory in the sense that, I don’t personally see the fascination with it. It’s really an enlarged iPhone without the iPhone’s capabilities. You don’t even have the ability to connect to an Ethernet cable.”

To be competitive, Singer says that companies need a product with increased battery life over the iPad, less expensive apps, and a cost-effective 3G or 4G network.

Gartner’s McIntyre says that while the functionality of the iPad is high, its high price is a turnoff for some consumers.

“The iPad starts at $499 goes up to $900,” McIntyre says.  “In order for media tablets to be accepted and adopted, they are going to have a price comparable to mini notebooks, which often retail for around $300. The price for a media tablet needs to be low enough that consumers feel they can justify its purchase as another computing device as most would have already bought a PC and a smartphone.”

Sometimes, for business reasons, the alternative to the iPad, is, well, not purchasing the iPad.

Richard Seppala, founder of YourROIGuy.com, does trade shows. When the iPad launched, he thought it would be helpful for his booth. Seppala has an iPhone already, so when he went to CommXperts.com, an Orlando-based company who works with businesses, they suggested a PICO projector. Seppala says it worked very well.

“I plugged (my iPhone) into the PICO projector so I have a crowd of 10 people watching my presentation on the wall,” Seppala says. “I was able to sell 10 clients watching this thing. When the two people side by side are looking at the iPad, the people that can’t see would walk right by. Everyone can see the presentation on the wall with the PICO projector. It’s like speaking on stage in your booth. People from across the room that saw the movie playing walked by the booth and it was a great lead generator. I have the iPhone so I didn’t need something that was larger with the same features.”

Courtney Barnette, President at CommXperts.com, says the projectors are $550, about the same as an iPad, but clients can rent the projectors for the trade show - it costs $200 to rent with a $350 deposit, and clients are refunded the deposit after the show. Barnette says it’s a good value for clients.

“Most businesses have a device that has a video out, and you could just add the PICO projector to it and not purchase the iPad,” Barnette says. “Most people like the iPad because it has a larger service. But if you can connect a PICO projector to an iPhone you can have surface of 200 inches on a wall. It’s really amazing what this projector can do.”

iPushback: Are Apple Developers Getting Restless?

By Ned Smith

When Apple released iPhone SDK 4, its new software development kit for mobile devices, in early April, three lines of legalese in the license that mandated developers only use Apple’s programming tools to create applications sent seismic shock waves through the software community. The reverberations are still being felt.  And Flash functionality is still on the outside looking in.

Lots of sound and fury followed, coupled with rampant speculation that this latest instance of Apple’s control-freak habits would finally send software developers fleeing in droves.  Gene Munster, a Piper Jaffray analyst, told The New York Times that “the risk Apple runs is ticking off developers and causing them to want to develop on other platforms.”

Though some prickly proponents of total developer freedom still grumble and mutter anti-Apple sentiments, it appears that the anticipated backlash has been pretty much confined to bluster and bombast. “Developers don’t like anyone telling them to do,” says Judy Shapiro, chief brand strategist for CloudLinux. “There will be a backlash, no question about it. But I think they’ll get over it.”

They have a good reason to get over it. “We have to build the stuff people want,” says Joe DeSetto, a principal in reallyMedia, a mobile applications development firm that creates games and utilities for the iPhone. And consumers clearly like what Apple offers.

Many believe that the developers themselves are just collateral damage in the Apple/Adobe wars. To parse the latest rules from Apple, you have to look at them from several perspectives, says Scott Schwarzhoff, vice president of marketing for Appcelerator, a platform and services company whose conversion tools help Web developers build content-rich applications for desktop and mobile platforms such as iPhone.

“What is the language?” he says. “What is the intent behind of language? What is going to be enforced? They hold the ultimate trump card in the form of the App Store acceptance/rejection process.”

The answer to the first, Schwarzhoff believes, has been blown out of proportion. “I think it’s a classic example of looking at one clause under a microscope.”

But the answer to the question of intent, he believes, is unequivocal. ‘Our position is that the intent is 100 percent directed at Adobe. This is an Adobe/Apple thing.” He doesn’t believe coincidence accounts for Apple making its SDK 4 announcement just three days before Adobe announced Flash CS5, which includes a packager for iPhone that would give Flash developers to get into the App Store.

“It’s critical for Adobe to get into the iPhone App Store,” Schwarzhoff believes. “Their developers need to get there. That’s where the action is, that’s where the growth is.”

And once you take disgruntled developers and Adobe out of the equation, the end user benefits. “What Apple wants is applications that make the most of their platform,” says Schwarhoff.  “They want applications that show the qualities of what the Apple platform offers. The company wants to showcase applications that make it unique and special.”

Though Appcelerator has not yet received word from Apple in whether its application has passed muster, Schwarzhoff believes that their product is in compliance. But he would like to see more transparency in the process. “To be fair, there’s a lot that could be done to provide more clarity to Apple’s intentions,” he says. “When you actually have to make business and development decisions based on three lines of legal write-up, there’s no way to really give clarity and confidence to a broad developer base.”

There are also ways to end-run Cupertino. “While I don’t begrudge Apple their locked-down approach — nor take sides with those that would rally against it — it’s not the only way to build rich applications for the iPhone,” says Yury Tsukerman, cofounder of Recess Mobile, an SMS and web applications developer. “You don’t have to play in Apple’s sandbox to build rich apps for their devices.”

“We just built a pretty sophisticated cross-platform calendar and appointment scheduling tool that opens in a browser, looks like a native iPhone app, works on Android, Palm, etc. and degrades gracefully to Blackberry and WAP devices,” he says. “To me, that’s ideal for business applications. We got to build it with a flexible, transparent and common toolset — html, JavaScript — the same way we build web applications, and make it broadly accessible, all without Apple’s oversight.

Though he prefers to remain an App Store outlier, Tsukerman concedes that there is merit in Apple’s approach. “I do agree with those who argue that Apple’s vertical integration has resulted in phenomenal, consistent quality that companies like Microsoft or Dell, being all things to all people and faced with maintaining compatibility across such a breadth of hardware, can’t match.”

That consistent quality may also explain why there has been little consumer backlash because of Apple’s restrictive policies. “Microsoft was run over, not because they were a big bully, but because a lot of their products were not up to snuff,” says Shapiro at CloudLinux.

Performance is also an issue underlying Apple’s rule striking out the use of conversion tools to create applications. “At a technical level, the conversion tools are really convenient for the developers but add an intermediate layer, increasing processing load and draining battery life,” says Patrick Tan, interactive director with Famous Interactive, a web portal developer. “Apple has put a lot of effort in to ensure a smooth and reliable experience for the iPad and iPhone user, a major reason for popularity and adoption, and conversion tools pose a threat to this.”

“Finding efficient methods to version software has always been a challenge in the software development world,” he says. “Apple’s announcement has added fuel to this challenge, but they are not the first or last company to be strict with its platform. In the end, Apple cares about the reputation of its brand and products more than it cares to please developers. We don’t blame them.”

Apple’s App Purge Provides Opportunity For Developers

By John Greaves

Apple’s crackdown on redundant and adult oriented apps in its app store has reverberated through the developer community like a 5.0 magnitude quake.  Many developers saw their livelihoods erased overnight and their business models become untenable in the new, stricter rules environment.

However while some bloggers ponder whether developers should fight back and at least one civil liberties group is racing to condemn Apple for what they see as a unilateral and unfair move to restrict developer creativity and autonomy; others are raising the caution flag against castigating Apple for what they see as a positive move.

Alex Moazed, CEO of Applico, has said previously of the iTunes apps store, “For underdog developers, [the] iPhone store is also very crowded.  It’s hard to get your marketing message out there.  You can sometimes spend more on marketing than on development with the iPhone store.”  Moazed sees that as likely to change with Apple’s purge.

“It will definitely decrease the repetitive, the dumb and boring or the simple kind of mindless apps which merely just kind of waste people’s time.  If they download an app and it’s junky, it’s whatever, people are just going to be less inclined to go and get another app after that so from that advanatage it’s good for the Apple store, it’s good for us and our clients who are making the apps that take time and take thought and are innovative,” Moazed said.

Wade Beavers, CEO of DoApp an iPhone development company since the early days of the store agrees with Moazed’s assessment.

“Really as the mobile development platform for these different phones has grown, the maturation has created new requirements, the challenge is every single phone has its unique intricacies, and Apple obviously holding a high standard in design amongst itself is trying to hold that high standard for its developers,” Beavers says.

According to Beavers, while high standard can be a good thing, he understands the concern of some developers who feel the world as they know it has been upended.

“The good part is hopefully that you get better quality apps that come through the store.  The bad part is rules change as you go and then you’ve got to make changes accordingly, which a lot of people don’t account for in their development process and that becomes a big challenge,” Beavers says.

This is hardly the first time Apple has angered developers with its handling of the app store.  Last November in response to a growing developer defection to the Android platform, Phil Schiller, Apple’s senior vice president for worldwide marketing, defended the company’s application approval policy in an interview with Business Week.  At the time, Schiller maintained that most apps were rejected due to technical issues or because they violated either Apple’s or some other company’s trademark or were illegal.

“There have been applications submitted for approval that will steal personal data, or which are intended to help the user break the law, or which contain inappropriate content,” Schiller says.

Now with the iPad’s impending release, Apple is positioning itself as a store people, especially parents can trust.  That meant adult content had to go.

Beavers says, “Personally I’m all for the restriction of some of the requirements of mature audience type stuff, I mean the top five apps were naked women, as a developer you’re frustrated and say well I guess we should just do porn and we’ll make money.  I mean not only am I a developer but I have kids.”

As for the ban on so-called cookie cutter apps, Beavers says he doesn’t think Apple is being quite that drastic.  “I like that some of the requirements they have get through the mud of apps that shouldn’t have even been apps, they’re one page business cards because that’s a lot of white noise especially when you’re talking 200, 300,000 apps how do you weed through them?”

Of course, if one were inclined towards blame storming, it could be argued that Apple built this cookie cutter monster by making the app development process so easy.  Moazed however is quick to refute this idea.

“You don’t want the barrier to entry to be difficult programming, that’s what you see with Blackberry, it’s not necessarily more difficult but it’s got more repetition, it’s not as streamlined as it is on the iPhone, and that’s where you see all of the competition and diversity thrive,” Moazed says.  “You see a lot of cookie cutter apps on the iPhone because there’s such a high demand for iPhone applications.  You still have a lot of template apps on Blackberry and Google.  You just see less of them because the user base isn’t as strong.”

Moazed says developers unwilling or unable to adapt to Apple’s new guidelines may defect to the competition.

“If there isn’t a way for them to adapt, if the app shows nudity or there isn’t a way to get around it and they don’t want to do another app that will be approved; they want to stick with the same concept, they’d probably go to Google because the user base is somewhat similar,” Moazed says.

None of this explains moves like yanking the Wi-Fi detecting applications from the app store and developers wanting to stay with Apple say the company needs to tell them what it wants.

“Until this all gets settled down it’s an uneasy feeling.  There needs to be a best practices guideline,” Beavers says.

Absent such a guideline, Moazed has simple advice.  “Innovative applications which don’t offend people and add value to your customers will ultimately be okay and be approved by Apple.  If you do something well, you put time into it, you don’t offend people you should be accepted.”

Tower of Babel: Developing Mobile Apps for Multiple Platforms

By Ned Smith

Software application developers had it easy in the lazy, hazy, crazy days of the 20^th century. Personal computing was pretty much a platform duopoly with Microsoft and Mac battling for market share and bragging rights. The meteoric rise of mobile computing, fueled by the smartphone eruption, wrote finis to all that. The mobile world today is awash in a sea of competing  platforms.

This poses a dilemma for developers. How do you know where to begin or what platform to focus on? How will the introduction of Apple’s iPad or the opening of the Kindle to outside developers affect the mobile marketplace?

The developers at Where, a mobile search and recommendation service, ran the calculus and decided to cast a vast mobile net.  This service is available on six major platforms — iPhone, Android, Blackberry, Palm, J2ME and WAP — as well as through nine operators and seven OEMs. That approach was driven by bottom-line considerations, according to David Chang, Where’s vice president of product. “It’s a fairly straightforward decision process based on P&L,” he says. “The first component is the overall market opportunity in terms of technology readiness - is the technology market-ready?- and consumer adoption - will consumers buy and use the devices and applications? The second component is the initial cost to develop and the incremental cost to maintain and support.”

And sometimes the decision is made for strategic reasons. “One of the main reasons we developed an application for multiple platforms is that you get a larger footprint of consumers,” Chang says. “It’s more useful when you have other people who use the application. Friends and family members may be on different platforms. In fact, I don’t think I’ve ever meet a family where everyone across the board uses the same phone.”

But there are challenges in developing for multiple platforms, he says. You have to deal with different form factors and the different development languages require different development skill sets.  The devices themselves also have different capabilities. This gives rise to the development of one-off feature sets. “One of our more popular features on the iPhone is the 3-D maps where you can see what’s around you in 3-D,” Chang explains. “That capability doesn’t quite exist on all platforms, so that’s one feature that’s only on the iPhone for us.”

A market fragmented by competing platforms provides a litmus test for the stickiness of new features, says Chang. “You tend to learn things on one platform and figure out whether it’s a platform-specific innovation or whether it’s applicable to more than the consumer base that’s on that one platform.”

Fragmentation also favors larger developers with deeper skills resources. “If you’re a two-person development shop, you probably can’t take advantage of the fact that you can be on all these devices because it’s very distracting to develop to a totally different platform,” Chang says. “We have developers in-house for these platforms, so whenever there’s a fragmented opportunity, we feel we can take advantage of it because of our assets. We can hop on one of those fragmented opportunities right away.”

The fit between application and device is also a key consideration, says Chang. Because of that, he says, Where may be expanding and looking for a spot on the iPad and Kindle dance cards in the near future. “We did actually take a look at both,” he says. “The nature of our application is that it’s really meant for people on the go. We envision the Kindle and the iPad to be much more home devices or stationary devices where there won’t be a pressing need for finding something like the closest coffee shop. You probably already know where it is.”

How users interact with an application is another consideration. NBA Digital is a partnership between the NBA and Turner Sports. They jointly manage the NBA’s digital assets and are extending the league’s reach into the mobile marketplace with 33 paid and free applications across the Android, Blackberry and iPhone Platforms, including its signature, NBA Game Time.  “The key for us is to develop new products for our experiences,” says Michael Adamson, Turner’s vice president new sports products. “We began our mobile app development a year ago. We want to reach the most NBA fans possible. That necessitated a mobile strategy.”

NBA Digital took a look at who was engaging with NBA.com already on a mobile phone and paid close attention to the momentum of the iPhone in selecting the platforms to support. “Video was one of the major challenges in developing across platform,” says Adamson. “We developed with a screen dimension and user experience in mind. All the devices look incredibly similar. We have been very pleased with the results. It’s not intended to be NBA.com; it’s filling in the gaps.”  Given their druthers, says Adamson, fans want to see sports live, not on a small screen.” But life gets in the way.” That’s where NBA Digital comes in.

Adamson says this has been a learning process to find out what works in mobile. “We are trying to learn as much as we can during the 2009-2010 season,” he says.  “Here’s one surprise. The number of fans who engaged us on the Android platform has been much higher than we expected. They’ve become really avid and engaged.”

The fit between the application, device suitability and prior fan interaction with NBA.com lead NBA Digital to home in on developing for the Android, Blackberry and iPhone platforms.

You don’t have to have the deep pockets of the NBA and Turner Broadcasting or the deep skill-set bench of Where, however, to develop cross-platform mobile applications. There’s a way to port without pain.

Appceleartor made its bones by providing a platform that lets developers create native mobile application experiences for iPhone and Android devices using existing web skills like Javascript, HTML, CSS, Python, Ruby, and PHP.  Though the apps created are not true native apps, they’re well beyond good enough, according to Scott Schwarzhoff, Appcelerator’s vice president of marketing.”We’re at 99 percent of native speed,” he says.

Mobile, Schwarzhoff says, is not a mature marketplace. In making the decision about what platform to pick, he advises, a developer should ask,” What’s the market today versus where it will be when I get my app to market?” He needs to get a sense of the opportunity across the market.

Appcelerator, echoing Where’s thumbs-down on Amazon’s device,  is going to pass on making its platform work with the Kindle. “We don’t have plans to support Kindle,” Schwarzhoff says. “It’s a business decision. We go where the opportunity is. The Kindle is not designed from the get-go as an applications platform.”

Not so, though, with Apple’s iPad. “The iPad is not only a new platform,” he says. “It’s a new category.” In a recent survey of 23,000 developers conducted by Appceleator, 90 percent said they were interested in building an iPad application within the first year.

“The principles of the iPad have been proven by the iPhone,” says Schwarzhoff. “People say the iPad is just a big iPhone. Is there anything wrong with that?”

Mobile Apps: A Long-Term Investment

By Rebecca Henely

With 4G/LTE technology looming and more than 140,000 mobile applications currently available in Apple.com’s App Store, mobile apps have become an attractive new venture for companies.

Yet as with any new technology for a new marketplace, the profitability of putting out a new app for a company can be uncertain.

According to a new Forrester study titled the ROI of Mobile by Julie A. Ask, start-up costs for an app encompass more than just the initial creation, and companies must consider a variety of factors when estimating consumer adoption.

“Calculating the ROI of emerging technologies and services that depend on consumer behavior is challenging,” Ask states in the study. “Some may argue that it is part art and part science.”

Ask’s study states apps can be beneficial to a company. They can increase sales and customers not only through purchases via mobile device, but also by guiding customers to brick-and-mortar locations and delivering promotions to increase the amount of purchases per visit. Some company infrastructure costs like facility leasing and maintenance, personnel, costs related to inventory, or material costs may also be cut down company-wide if the app is popular.

Many companies want to have a mobile presence, as well. In a recent survey by R2integrated, 22 percent of respondents named mobile marketing as “very important” to their overall marketing strategy, with 26 percent naming it ”important” and 28 naming it “somewhat important.”

However, Ask states, building and distributing an app can increase costs in other areas aside from the initial cost for building the app and the licensing. These can include service fees, costs of delivering messages to customers, distribution deals with carriers, marketing the app, time spent training or re-organizing personnel to handle support for the mobile app.

“The cost and time to build the apps is greater than anticipated,” Randy Paskal of Moviola, which recently created the

Pro Video Guide app for sale on Apple. “The more time we spend making sure that we are building a quality product the better the results. A fair amount of trial and error has occurred during this process.” Then there comes the question of whether the app will be used.

“With an emerging medium like mobile, it is difficult to forecast consumer adoption and usage,” Ask states. “Benefits such as sales are easily quantified because they go directly to the bottom line. Others - such as increasing customer satisfaction by 0.2 percent - may be more difficult to quantify.”

The article suggests companies must estimate consumer adoption over the next three to five years, but also how often consumers will use the device and how much profit will be earned through usage.

“For a mobile app to be a considerable additional revenue stream, you need to ensure what’s been offered is enticing,” states Marc Edwards, director and lead designer for mobile app development company Bjango Studios. “Also, make sure you do your homework on what’s available. The App Store contains almost 200,000 apps, so most ideas have been done at least once (often badly).”

Edwards, as well as other companies, seem to be following Ask’s advice already. Paskal stated Moviola expects its app to recover its cost within the first year.

The tax-assistance company TurboTax says it sees its SnapTax app, which is available to California residents who want to file a 1040EZ or 1040A form this year, as a test to see if the market for doing taxes on mobile is viable.

“The challenge is how to balance the scope of what you want (or could) cover with maintaining a simple, easy customer experience,” says Colleen Gatlin, manager of corporate communications for TurboTax. “For example, we could consider broadening the reach to audiences with more complicated tax situations but is that the right kind of experience for filing taxes from your phone? Also, is there enough of an audience for the app and in this case, we believe so. [There is] lots of room to expand (other states, other platforms), but important to learn first.”

Developing a partnership can also help, states Ben Kazez, founder of Mobiata, which has created a number of travel apps. ”With our travel partners, we’re able to offer much shorter times till profitability (for companies looking to make revenue through mobile), since the mobile travel platform we’ve built and field-tested enables us to develop apps at a fraction the cost of internal IT teams,” he states. Kazez says the most important thing when creating an app is quality.

An app can’t be poorly designed or badly engineered. “We’ve seen some general digital creative shops getting their feet wet with app development, sometimes for very large clients. Their work hasn’t been tested the way ours has - not just by quality assurance engineers but by real users actually traveling - and we’ve seen several of these apps fall flat during updates from one version to another, or even just during regular use,” he says.

Edwards also says apps can be done for niche audiences, so long as the rate of return isn’t expected to come quickly. “We are looking at the revenue as a long-term investment in the company and our clients, as we design apps for a specialized segment of the professional marketplace and we do not expect big nor quick returns on our investment,” he says.

“The time to invest in mobile is now,” Kazez says, “but the case for particular apps really depends on the financials of the companies in question.”

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