Topic
Smartphone App Riches Linked to In-App Purchases
Source: Mobile Marketing Watch, January 17, 2012 — By Michael
The path to smartphone app riches seems pretty clear. If you don’t possess an in-app purchase strategy, there’s a good chance you’re going to make less money than those who have one.
According to the latest information and analysis provided Tuesday from IHS Screen Digest, the best way to make money in the smartphone apps market is to give the apps away for free-and and then generate revenue on subsequent sales of in-app purchases.
The new projections published today from IHS show that in-app purchases will rise to account for 64 percent of total market revenue in 2015, up from 39 percent in 2011.
Revenue from in-app purchases will increase to $5.6 billion in 2015, up from $970 million in 2011, according to the IHS Screen Digest Mobile Media Intelligence Service.
“Smartphone users overwhelmingly prefer free apps to paid apps, as we estimate 96 percent of all smartphone apps were downloaded for free in 2011,” noted Jack Kent, senior analyst, mobile media for IHS. “In 2012, it will become increasingly difficult for app stores and developers to justify charging an upfront fee for their products when faced with competition from a plethora of free content. Instead, the apps industry must fully embrace the freemium model and monetize content through in-app purchases.”
IHS Screen Digest calculates that 68 percent of the top-grossing U.S. applications featured some form of additional content or functionality available via an in-app purchase.
Do you have as much faith in the business model of in-app purchases as all the analysts and mobile experts do? Please weigh in with a thought or comment below.
How to make money with mobile apps
Our two cents:
It’s important that people understand the four ways to monetize apps:
- Paid downloads
Set a fixed price for your app, customers purchase it, and the transaction usually ends there - Exclusive sponsorships
May establish yourself enough to make your next app a success, but not always economically feasible - In-app purchases
Customers may not pay anything at the beginning (”freemium”), but will have the opportunity to make purchases within the app to enhance the experience - Advertising
Provided you have a good match between app and advertiser and an installed base large enough to support the volume of impressions needed for profit
By Ed Burnette | January 16, 2012, 7:51pm PST, ZD Net
Summary: You too can be a success at building and selling mobile apps. Read Gregory Kennedy’s advice on how to develop a successful app and turn that success into a career.
As director of global marketing at mobile ad network InMobi, Gregory Kennedy has learned a thing or two about helping developers make money with mobile apps. In this Q&A, Gregory offers some advice for app developers of all platforms.
What’s the key to success as a mobile developer?
[Gregory] Focus on providing customers a great value proposition. If you’re making games, they need to take maximum advantage of the mobile experience. Angry Birds is the best example of this. The gameplay is simple and you only need a few minutes to play to the next level. It’s ideal for mobile. Sustaining success in digital media is more challenging, we’ve seen huge companies rise and fall in only a few short years. Being flexible enough to evolve is key, but you also need to develop a strong sense of what works in digital and stick to it.
Once you have an idea that works, then what? How do you turn that into profit?
There are four—and only four—ways to make money with apps. The most obvious is through paid downloads, in which you set a fixed price for your app, customers purchase it, and the transaction usually ends there. You could also seek an exclusive sponsor for your app. It’s not the most economically sustainable method of monetizing, but it might help you establish yourself enough to make your next app a success. Then, there are the increasingly prominent in-app purchases, in which your customer might not have to pay anything at the beginning (”freemium”), but will have the opportunity to make purchases within the app to enhance the experience.
[Read: Survey says: Mobile gamers prefer free games that are full of fertilizer]
And finally, you can sell advertising space within your app. Provided you have a good match between app and advertiser and an installed base large enough to support the volume of impressions needed for profit, this can actually make you more money than you can with a pay-per-download model. I always recommend developers mix and match models to their particular app business. The more monetization strategies you can employ, the more money you will earn.
What about marketing?
With over one Million apps in the world, competition is fierce. You can have the greatest app in the world, but if you can’t get the word out about it, nobody’s going to download it.
Should I worry about piracy?
If you’re developing apps for iOS only, you won’t really need to worry about it. Apple is committed to copyright and has done a good job at protecting the eco-system. But of course Apple isn’t the only player in the game, and piracy is becoming an issue with Android apps. Here at InMobi, we’re actually working on a technology that will still display ads in pirated apps, so that you continue to make money from your advertisers.
If you don’t develop for Android you’re missing out on a huge segment of the market. In a recent Mobile Insights Report, which covered August through October of 2011, we found that 31.1% of mobile ads were displayed on an Android device. Piracy is also not an issue if you focus on ad supported apps. Plus, unlike iOS apps, Android apps are available through multiple stores worldwide, so your potential for exposure can actually be even greater.
Before joining InMobi you spent many years as an artist and creative director. Why did you transition to high-tech marketing?
I was always good at that strategy and concept aspect of advertising. I found my clients responding positively, so after a while it just made sense for me to go onto the business side full-time. I like to jokingly say that a good creative director is 85% marketing manager, 10% high school principal, and 5% creative. When I transitioned, I only had to give up that 5%.
Pushing Mobile Payments
Sprint Nextel Corp. this week tripled the number of smartphones it offers with a seldom-used technology for tap-and-go payments, as the carrier and its rivals try to convince a reluctant public to make mobile payments mainstream.
Sprint, which announced at the Consumer Electronics Show that it will add LG Electronics Co.’s Viper and Samsung Electronics Co. Galaxy Nexus to its lineup, is among those betting big on the idea that people will want to use their smartphones as credit cards. So far customers and retailers have remained tepid toward the technology, called near-field communication, or NFC, prompting Sprint and others at the Las Vegas show to try a different tack: touting NFC’s “side benefits,” which include mobile coupons and digital-key replacement.
“If you’re really going to get consumer adoption, you have to start talking about the capability in terms they can relate to: touching the phone to something and having something happen,” said Kevin McGinnis, Sprint’s vice president of product.
At its booth at the electronics show, Sprint-rival Verizon Wireless was demonstrating how a Galaxy Nexus could be used to release a deadbolt by waving it in front of the lock. Meanwhile, Research In Motion Ltd. demonstrated how drivers can sync their devices to a car’s software using NFC, which can enable hands-free calling and other preferences such as seat and mirror positioning.
NFC “allows the phone to be your mobile key chain, to replace the various keys you would carry and the identification cards you use to get into your office,” said Karl Weintz, mobile access vice president for HID Global, whose technology Verizon used in its demonstration.
Soon, consumers using NFC may be able to wave their smartphones at arena turnstiles in place of tickets; pair their devices with appliances and mobile accessories; retrieve coupons; or link instantly to websites by waving them in front of a reader, said Kevin Packingham, Samsung Electronics Co. senior vice president of product innovation.
Though NFC isn’t a new technology, carriers and device makers have been beset by a lukewarm response from retailers—which are loath to buy new equipment to enable tap-and-go payments—and by a debate over who controls consumers’ financial data. Consumers have also been reluctant to ditch traditional credit cards, which reward them with airline miles and other incentives.
“The challenge is you’ve got to get the infrastructure built and the people out there to use it before it makes sense,” said Charles Golvin, an analyst with research firm Forrester. “People aren’t going to rush out to buy a device with this capability that they can’t use anywhere.”
There are just 100,000 NFC readers in the U.S., said Yankee Group analyst Nick Holland. That compares with near ubiquity for traditional credit-card readers.
AT&T Inc., Verizon Wireless and T-Mobile USA in 2010 formed a joint venture known as Isis to roll out a mobile-payment network that will one day funnel transaction fees back to the carriers. But Isis will only begin trials this year, and AT&T and T-Mobile, a unit of Deutsche Telekom AG, haven’t begun selling smartphones—other than BlackBerrys—with NFC capability.
Google Inc. said it relented in the face of Verizon Wireless’s demand in December that its Google Wallet mobile-payment software not be embedded in the Galaxy Nexus, just as the device was set to launch. Verizon, a joint venture of Verizon Communications Inc. and Vodafone Group PLC, has said the software was incompatible with the network and the dispute wasn’t about its Isis venture.
Central to the rollout of NFC technology is who will pay for the terminals to enable payment and who—among card companies, banks and the carriers—controls users’ financial data. Marc Freed-Finnegan, senior product manager for Google Wallet, said those issues were slowing adoption and it may be years before they are all settled.
Shadman Zafar, a chief technology officer for Verizon Wireless, said he expected it to be at least three years before NFC use for payment is anything more than a niche.
Mr. Zafar said retailers are concerned their transaction fees may rise, though he said they ultimately would benefit through targeted couponing and speedier checkout. Under one scenario, a venture like Isis could absorb those fees in exchange for profit-sharing through the coupons, he said.
Nonetheless, more device makers will be compelled to offer handsets with NFC chips in them, Nokia Corp. Chief Executive Stephen Elop said during a presentation at CES.
Motorola Mobility Holdings Inc. will also enter the NFC fray this year with several handsets, said Christy Wyatt, its senior vice president of mobile devices for enterprise, in an interview at the show. “Customers are asking for it and we’ve got to deliver for them,” she said. “The ecosystem will follow.”
Write to Greg Bensinger at greg.bensinger@dowjones.com
‘Augmented-reality’ windshields and the future of driving
Las Vegas (CNN) — Imagine a future in which icons flash on your car windshield, hologram style, as your car approaches restaurants, stores, historic landmarks or the homes of friends.
Simply point your hand at them, and the icons open to show real-time information: when that bridge over there was built, what band is playing at that nightclub on the left, whether that new café up the street has any tables available. Wave your hand again, and you’ve made a restaurant reservation.
Mercedes-Benz showed off this vision of the future of driving — complete with augmented-reality and gesture-controlled features — this week at the International Consumer Electronics Show.
CES is the world’s biggest technology trade show, and carmakers are becoming a bigger presence here. Visitors climbed into a little cockpit at the Mercedes booth and took a brief, interactive and virtual ride through nighttime San Francisco — with the high-tech windshield as a guide.
The technology is still crude, and at least several years away from finding its way into Mercedes vehicles. But it illustrates how automakers, while embracing current computer innovation such as dashboard touchscreens and voice-control interfaces, also are keeping an eye further down the road as well.
As digital tech — and our expectations for it — becomes more mobile, carmakers are taking notice. Many automotive designers here seem to have taken inspiration from smartphones, with their promise of being always connected and their vast menu of apps for every purpose.
“Cars are becoming platforms to participate in the digital world in a fully networked sense, just like your tablets can and your phones can,” said Venkatesh Prasad, a senior technical leader with Ford Motor Co.’s innovation division. “It’s our job to take those computing services people are used to at 0 mph and make them available at 70 mph.”
Yes, that sounds a little scary. And with escalating concerns about the hazards of distracted driving, automakers must walk a fine line between convenience and safety. Automotive engineers are continually trying to simplify their interfaces to cut down on the precious seconds that a driver’s attentions are diverted from the road ahead.
“All of our technology is voice-powered,” Ford product manager Julius Marchwicki told CNN’s sister network HLN. “So instead of fumbling with your phone … you keep your hands on the wheel and your eyes on the road.”
Sascha Simon, head of advance product planning for Mercedes-Benz USA, agreed: “We determine which apps should be in the car and which shouldn’t. We have these apps integrated in such a way that they’re actually relevant to you.”
For example, say you’re running late to a meeting and can’t call or text while driving. Mercedes’ messaging app will create a menu of logical missives based on your location and your car’s speed — “I’m stuck in traffic,” or “I’m just north of Bakersfield” — and display them on the screen.
You scroll through them and push a button to post the one that fits, instead of having to manually type the words.
Ford this week introduced five new apps for its pioneering Sync hands-free entertainment system, including Roximity, a daily-deals application that provides real-time discounts relevant to a driver’s location. Ford is so committed to morphing its vehicles into digital platforms that the company is recruiting developers to create apps for Sync and plans to open a research lab in Silicon Valley this year.
Meanwhile, Mercedes launched the second generation of its mbrace system, which connects drivers with the Web via customized apps that can be controlled by voice commands or on a dashboard touchscreen. Mbrace is now cloud-based, meaning it’s always connected and its software can automatically update itself.
Not to be outdone, Audi and Kia also have big presences at CES, and both announced updated versions of their Web-based dashboard entertainment systems.
The boldest advancements in automotive tech, however, may be a few years away. All the major car companies are working on systems that would allow vehicles to talk to each other about road conditions, weather and traffic snarls. For example, a car swerving to avoid a tire in the road could send an instant message alerting surrounding vehicles to the hazard.
Ford also is developing technology that takes a more holistic approach to driver safety and welfare. Instead of focusing on preventing collisions, for example, a car could help diabetic drivers by employing wireless sensors to monitor their glucose levels, said Gary Strumolo, Ford manager of vehicle design and infotronics.
Or a car could help allergy sufferers by monitoring for high-pollen areas, then recirculating air within the vehicle instead of pulling it in from the outside, he said.
Kia is testing something called the “user-centered driving concept,” which would emphasize safety by employing an infra-red LED and camera to monitor the driver’s face for alertness. The system would recognize whether the driver’s eyes are opened or closed, safeguarding against an accident caused by the driver falling asleep.
All these advancements may make driving more interesting. Or they may spoil one of modern society’s last refuges from the hyper-connected digital world.
Either way, they are coming soon.
“We’re working on a new generation of vehicles that truly serve as digital companions,” said Dieter Zetsche, head of Mercedes-Benz Cars, in a keynote speech at CES. “They learn your habits, adapt to your choices, predict you moves and interact with your social network.”
iPhone Apps finder – A handy tool for finding the right app
Not only do these guys neatly bucket apps by category, they have reviews of them as well. This is especially helpful for the pricier apps that may be somewhat unproven. They do not accept money for the reviews, but they do have advertising on the site.
Report: Consumer Media Usage Across TV, Online, Mobile and Social
Nielsen, January 6, 2012
Almost one in three U.S. TV households – 35.9 million – owns four or more televisions, according to a new report on media usage from Nielsen. Across the ever-changing U.S. media landscape, TV maintains its stronghold as the most popular device, with 290 million Americans and 114.7 households owning at least one. In contrast, 211 million Americans are online and 116 million (ages 13+) access the mobile Web.
For more insights on usage and trends across TV, mobile, online, and social media download Nielsen’sState of the Media: Consumer Usage Report.
