Mobile Apps 2.0 Agenda: Growing More Profitable and Sustainable Ecosystems

The Mobile Apps 2.0 Agenda, designed for those at the cutting edge of developing, distributing and marketing apps, covers: Best-App Store Strategies and Business Models; Marketing, Merchandising and Monetising apps; and Future Mobile Industry Requirements; Connected TV’s; and Out Appling Apple.

Mobile Apps 2.0 is a dedicated stream at our New Digital Economics Executive Brainstorms in Palo Alto – April 5-6, London – May 11-12, Singapore – 22-23 June 2011), and a key focus for Telco 2.0’s Research Programme.

Here is the Mobile Apps 2.0 agenda in detail, covering our key hypotheses and questions for industry strategists, marketing, commercial and technical leaders developing or assessing strategies in the Mobile App ecosystem, and including details of the Mobile App 2.0 Executive Brainstorm sessions and planned research outputs in the Telco 2.0 Apps and Appstores research stream.

Executive brainstorm & developer forum agenda
Introduction – The Explosive Growth of Apps

The Apple App Store has been a key component in the growth of the ‘mobile internet’ over the last two years. It has provided a single location for iPhone users to download, and developers and brands to distribute, applications and content. Since Apple set the benchmark, other players – device manufacturers (e.g. Nokia on mobile, Acer on the laptop), operators (e.g. Vodafone), industry bodies (e.g. WAC) and independent players (e.g. GetJar) – have all entered the mobile content and the app store market in earnest. Consumption and use of mobile content and mobile apps has continued to grow but, fortunes for individual app stores and different players in the ecosystem, have been mixed.

Despite the odd blockbuster (think Angry Birds), few developers make much money from applications that are not developed for a fee (for example for a brand). Similarly, analysts are agreed that none of the independent app stores are making money.

At the same time, there is increasing emphasis on tablets and connected TVs as new sources of growth for applications with strong belief from many that there is a need for an integrated experience between the mobile, the tablet and the TV.

Mobile Apps 2.0 Objectives

In the Mobile Apps 2.0 sessions at the H1 2011 Brainstorms, we will be exploring where areas of opportunity for CSPs exist, and how to create value with and from the mobile App ecosystem.
We will also be looking at the interaction between Apps and other elements of the Telco 2.0 agenda, notably developer communities, subscriber data, and Augmented Reality.
In addition, in our Apps and Appstore research programme, we will be analysing and benchmarking the most successful and innovative strategies, particularly among CSPs.
There are three Sessions in the morning of the Mobile Apps 2.0 stream:

Session 1: Best App Store Strategies & Biz Models;
Session 2: Marketing, Merchandising & Monetising Apps;
Session 3: Industry Requirements for future success.

The Mobile Apps 2.0 stream then joins the related afternoon plenary sessions on ‘The Connected Home’, and ‘Out-Appling Apple’, (we will post more on these soon) and In the evening there is a special AppCircus developer showcase/forum and a major networking event.

The rest of this article details the sessions and outlines our planned research outputs.

Session 1: Best App Store Strategies & Biz Models

Three major players have developed new app stores in the last eighteen months. Google, with Android Marketplace, Microsoft, with Windows 7 Phone (designed to supercede Windows Marketplace for Mobile), and Blackberry, with App World, have launched and joined the early players – Apple and Nokia (Ovi).
The Telco community too has attempted to overcome its fragmentation by launching the Wholesale Application Community (WAC) which allows developers to write applications for multiple operators.

Session 1: Objectives

In this session, we will explore the best strategies and business models for app stores and seek to uncover the strategy for each of the ‘big six’ app store players mentioned above.

Tablet, set-top box and TV manufacturers, as well as broadcasters are all seeking to develop a ‘control point’ into the home. How important are applications and app stores in this battle and how will they go about delivering a seamless user experience?

Session 1: Telco 2.0 Hypotheses:

  1. Scale economies mean that there will be pressure to consolidate in the app store market with a one or two players coming out on top.
  2. App store players do not need to make money from the app store but are using it to drive value in their core business – devices, advertising or telecoms services. It is differences in these core businesses which will drive different strategies from the major app providers. For example, those such as Google that have an advertising-driven core business will be more open than players such as Apple and Nokia that are motivated by device revenues.
  3. Business models, including revenue distribution models, differ between the key app store providers and these differences will be critical in determining the winner and losers.
  4. App stores serving the burgeoning tablet market will become much more important during 2011 and players than can integrate their propositions across the PC/Tablet, TV and mobile environments will have a considerable advantage.

Session 1: Key Questions to Debate

  • Can the market sustain six big providers (and a host of independents) or will we see consolidation in app stores?
  • What are the best strategies for success in this marketplace?
  • What are the most appropriate business models for distributing value across all ecosystem players?

Session 2: Marketing, Merchandising & Monetising Apps

The volume of apps and content in the major apps stores continues to grow: 10,000+ in Blackberry App World, 80,000+ in Android, 300,000+ in the Apple App Store. Similarly, usage is rising with Nokia OVI announcing in November 2010 that consumers were downloading 3 million apps a day. But how can applications and content best be marketed so that the appropriate offer is made to a consumer and what are the best revenue models?

Session 2: Hypotheses:

  1. As with Amazon and other merchants, the number of items ranged will be a key driver of consumer traffic to app stores.
  2. App stores that offer developers, content owners and advertisers the best overall ROI will be able to range the largest volume of apps and content.
  3. The best overall ROI for ecosystem players will not only be a function of consumer traffic on an app store, but also of the marketing support and revenue model adopted for the app and the ‘pay-out’ offered by the app store. For example, developers have experienced several shortcomings with Android (such as limited distribution of Android devices in some geographies) but, overall, the generous revenue share model (with 70% going to the developer and 25% going to the carrier) has fuelled rapid growth in both developed apps and distribution of Android devices.
  4. The overall success of an individual application will be a function of the quality of the associated marketing strategy (and its execution) and the revenue model selected (sponsored or ad-funded apps will generate higher downloads but may have low app usage whereas paid-for apps will be downloaded in lower volumes but are likely to have greater longevity). Getting the marketing approach and revenue model right will be a key concern of developers, content owners and advertisers.

Session 2: Key Questions to Debate

  • What are the respective roles of the developer, content owner, advertiser and app store owner in delivering apps to consumers?
  • When should different revenue models (freemium/paid-for, sponsored, ad-funded) be deployed?
  • How can momentum be created for an application – what marketing strategy is most effective and how important are new marketing methods, such as social media, and new platforms, such as tablets and TVs ?
  • What are the benefits of understanding user behaviour beyond the app store and using this to provide more relevant apps within it? Google is seeking to do this with Google Accounts and Amazon will integrate the Amazon recommendation algorithm from its website into with its forthcoming Android App store. How important are such strategies and what will drive their success?
  • What are the benefits and risks of a multi-platform/app store approach for developers, content owners and advertisers and how might aggregators such as WAC reduce risks?
  • How important is a social media marketing strategy for driving the success of applications?

Session 3: Industry Requirements for future success

As the ‘application and content industry’ continues to grow (and grow up), what needs to be done by individual companies and collectively by all players to ensure continued and sustained success? Everyone has a role to play but how should those roles evolve for app store owners, developers, device and OS companies, advertisers and operators? How should healthy competition be encouraged and necessary collaboration also fostered? How should existing ecosystem players work with new ones – set-top box, tablet and TV manufacturers, broadcasters and web players such as Amazon?

Session 3: Hypotheses

  1. As the industry matures and growth levels come down, so competition and consolidation will intensify
  2. Some players will be forced out of the market (or be subsumed by more successful players)
  3. Action should be taken now to best position both individual companies and the overall industry for the future. This will help ensure that healthy growth is maintained and the industry develops a firm footing with which to tackle future challenges.
  4. New players from the TV and PC industries and online retail will create new sources of opportunity and threat and need to be successfully integrated into the ecosystem

Session 3: Key questions to debate:

    • What actions are required by players – developers, app store owners, device and OS companies, advertisers and operators – to build on the industries early successes?
    • How can operators add value to existing app stores and to WAC?
    • How should existing players manage relationships with new players: set-top box and TV manufacturers, broadcasters, tablet manufacturers, online retailers? Where are the threats and opportunities?
    • Where should players work together commercially and technically to accelerate value creation for the overall ecosystem (including consumers)?
    • What can we learn from recent best (and worst) practice? How should these lessons be applied in the future?

Presenters, Panellists, and Developer Forum

There will be short stimulus presentations x 3 (from representatives from the Communications, Media and Technology industries), followed by debate with participants using our ‘Mindshare’ interactive technology, followed by a panel discussion.
There is also a Developers Forum at each Brainstorm.

Telco 2.0 Recent and Planned Research

  • Augmented Reality: Is there a valuable role for telcos?
  • Apps and API/Data Strategy – what is the strategic value of Apps?
  • Executive Brief: A review of Apps and Appstore Strategies for CSPs

Next Steps

Follow these links to learn more and join the H1 Telco 2.0 Executive Brainstorms and Research programme:

  • Americas Executive Brainstorm, 5-6 April 2011;
  • EMEA Executive Brainstorm, 11-12 May 2011;
  • APAC Executive Brainstorm, 22-23 June 2011;
  • Telco 2.0 Research Programme