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.”
Wired Magazine Shows Off Its Planned IPad Edition
By: adage.com
NEW YORK (AdAge.com) — As the Apple iPad and countless other devices approach, many magazine publishers are working furiously to make sure they can play on the new platforms.
Apple vs. Adobe: Flash Developers Getting Impatient
By Lee Simmons
By now, the debate between Adobe and Apple over incorporating Flash on the iPhone is well known in technology circles. Apple has blocked Adobe from the device, with reasons ranging from Flash’s memory intensiveness and battery draining potential. For its own part, Adobe has addressed most claims and created a product that is just about market ready for launch on the iPhone.
While the debate may rage on, mobile Flash developers aren’t willing to wait much longer for the clouds to clear. Adobe’s Creative Suite 5 (CS5) promises to translate Flash apps to iPhone-compatible apps. That could be a potential boon to the estimated 2 million mobile Flash developers working today (compared to 125,000 iPhone developers).
Mobile Flash developers offer differing views on the Adobe-Apple fracas, but most agree on at least one thing: the debate won’t stop Flash from revolutionizing mobile apps.
“I’d rather be active than passively waiting for something that may never happen,” says Dave Yang, founder of Toronto-based Quantumwave Interactive, a mobile and new media development firm. “For a lot of developers, the iPhone market is potentially a great income source. But with the tight control by Apple, there are pros and cons developing for it.”
Control, Performance Issues
Launched in 1993, Quantumwave develops a variety of Flash apps for mobile, including weather, news, photo galleries and shopping apps. The proliferation of smartphones made mobile a logical target market for Yang’s business. Yang points to a couple of main drivers behind the latest disagreement between Adobe and Apple: revenue control and performance issues.
“It’s a combination of who has control over app revenue, and potential performance issues of the previous generation of the Flash Lite player,” Yang says. “The Apple App Store is the only official method to get applications, and Apple has full control over it. If they allow Flash to run on the iPhone or iPad, users can get a lot of content - games, video, applications, etc. - without paying Apple anything.”
The theory that Flash apps create performance issues on mobile devices - particularly that Flash Lite is slow, CPU intensive and drains battery life - is a common misconception, Yang adds. He has noticed no significant issues in his own development.
Meanwhile, Adobe has made a lot of improvements in its next generation of Flash Player for mobile devices, including hardware acceleration. The advances are promising for mobile app development, Yang says, and he hopes Adobe and Apple can reach some agreement in the near future.
“As much as Apple likes to say their devices provide the best Web experience, a lot of Web content uses Flash for not just video or games, but enterprise applications as well,” he says. “Without Flash, the Web experience on the iPhone or iPad is frustrating to say the least.”
Mariam Dholkawala, founder of Mumbai-based IGameStudio, a mobile game developer, likewise sees Apple’s restrictions against Adobe as more of a strategic decision than a performance one.
“I would argue and say that if other OEMs combat CPU usage on their handsets, why single out the iPhone?” Dholkawala says. “Flash content, if made open on the Web, might threaten the content on the App Store. Eighty percent of Web games are Flash-based and over 75 percent of the Web is video.”
Beyond the Debate
Mobile Flash developers like Yang and Dholkawala aren’t content to take the wait-and-see approach with Apple. The easiest solution is CS5, which translates Flash content into native Objective C iPhone apps.
“As the product evolves over time, I’m certain that we’ll see a lot of developers using Flash to create content for the iPhone/iPad market. However, there will always be a need for Objective C when these solutions cannot provide the adequate result of performance,” Yang says. “I’m open to all possible solutions and potential markets to achieve the best balance between ease of development and performance. It’ll be interesting to see how Apple reacts to more complaints that their most popular devices cannot play Flash content.”
Dholkawala similarly sees opportunities in CS5. “This tool would help us compile our Flash Actionscript into native iPhone code for application distribution on the App Store,” she says. “I would like to get my hands a little dirty with the tool and see what Flash is capable of with the iPhone OS on mobiles. Besides that, I feel that Apple and Adobe should work out their differences and have a real plug-in running on the phone.”
Lee Simmons is a writer in Austin, Texas.
Is Kindle Lighting a Fire Under iPad?
By Sarah Jaferi
For the past two years, Amazon has welcomed authors and publishers to directly upload and sell content in the Kindle Store through the self-service Kindle publishing platform. Recently, Amazon announced that it is inviting software developers to build and upload active content that will be available in the Kindle Store later this year. The new Kindle Development Kit gives developers access to programming interfaces, tools and documentation to build active content for Kindle. Developers can learn more about the Kindle Development Kit and sign up to be notified when the limited beta starts in March.
In an interview with DMB, Apple spokesperson Colin Smith refused to comment when asked if Apple is worried that the Kindle Development Kit and other technologies will be competition for the iPad.
“We’ve heard from lots of developers over the past two years who are excited to build on top of Kindle,” says Ian Freed, vice President, Amazon Kindle. “The Kindle Development Kit opens many possibilities - we look forward to being surprised by what developers invent.”
The Kindle Development Kit enables developers to build active content that leverages Kindle’s unique combination of seamless and invisible 3G wireless delivery over Amazon Whispernet, high-resolution electronic paper display that looks and reads like real paper, and long battery life of seven days with wireless activated. For example, Handmark is building an active Zagat guide featuring its trusted ratings, reviews and more for restaurants in cities around the world, and Sonic Boom is building word games and puzzles.
“As the leading worldwide publisher of mobile games, EA Mobile has had the privilege of collaborating with many dynamic and innovative companies in bringing exciting gaming experiences to new platforms,” says Adam Sussman, vice president of Worldwide Publishing, EA Mobile. “Working with Amazon, we look forward to bringing some of the world’s most popular and fun games to Kindle and their users.”
Starting next month, participants in the limited beta will be able to download the Kindle Development Kit, access developer support, test content on Kindle, and submit finished content. Those wait listed will be invited to participate as space becomes available. The Kindle Development Kit includes sample code, documentation and the Kindle Simulator, which helps developers build and test their content by simulating the 6-inch Kindle and 9.7-inch Kindle DX on Mac, PC and Linux desktops.
Sarah Jaferi is a newspaper reporter with more than 15 years experience in journalism. She currently writes for The Times of Trenton in New Jersey.
Google Exec: We’re Here to Help Newspapers
By: adage.com
NEW YORK (AdAge.com) — Devices like Apple’s iPad may help newspapers and traditional publishers, but only significant evolution will save them, Google’s chief economist, Hal Varian, said in a talk with journalism students at UC Berkeley.
Is the IPad Publishing’s Savior? Pro and Con
By: adage.com
This week’s iPad launch brought publishing’s future back to many media minds; we asked two agency thinkers to argue the pros and cons of the device’s potential for reviving a sagging industry. Arguing pro is Hill Holiday’s Greg Winter; con is Hill Holiday’s Ilya Vedrashko.
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