Posts Tagged "Apple"

Today’s news was all about the debut of Google’s mobile phone, Nexus One, and also Apple’s acquisition of mobile ad network Quattro Wireless for $275 million.  The timing of either announcement cannot be coincidental.  Google and Apple appear to be converging on the same opportunity; mobile devices as platforms for advertising.

Yet read between the lines and you could imagine each company’s approach complementing one other very well, providing marketers with a variety of effective and measurable approaches to reaching consumers.

While there is nothing to prevent Google from developing a large screen tablet mobile device such as is expected of Apple shortly, a larger screen should serve as a higher value advertising basis than handheld devices.  This January 4, 2009 article about Nexus One on The New York Times website says as much:

“…some surveys show that users are wary of ads that could clutter the precious real estate on their small cellphone screens.  And phone users seem more willing to pay a few dollars for applications or content than PC users, potentially reducing the importance of advertising.”

Handheld devices lend themselves much better to simple advertisements akin to those seved by Google in association with its search engine or even by recently acquired AdMob.  This article speculates:

“(Apple) could develop ad units and formats that it thinks are way better than the tiny banner ads already on the mobile web.”

Apple’s reputed tablet device may be the ideal basis for such higher value ad formats.  Marketers will soon be faced with having to decide among different approaches for reaching their customers via mobile advertising, but should not neglect the need to engage customers directly using mobile marketing techniques such as those offered by Interactive Mediums.

With advertising focused almost entirely on acquisition and loyalty a constantly moving target, marketers require compelling engagement capabilities to rope customers into fulfilling experiences that encourage consumption.  That’s what Active Customer Engagement is all about.

A couple days ago we speculated a reputed move by Apple to offer free, ad supported iPhones could force Google into the device business.  Yesterday it was reported Google was in fact getting into the device business but with a voice over internet protocol (voip) phone which would access data networks only.  Apple’s recent patent filing may have nothing to do with Google’s plans but it’s hard to imagine this is purely coincidental.

Although the move hasn’t been confirmed by Google, the article notes that “the carriers won’t love this,” no doubt because doing so subverts their immense sunken costs in traditional cell networks.  Even so, AT&T has supposedly lined up to provide data network access, because if they don’t surely another will.  With Google Voice offering phone service over data networks, Google will effectively have a tightly controlled alternative to any other mobile phone, and one that could be given away free if supported by built in advertising – that Google also happens to provide.

Long term, moves like this could render voice networks irrelevant.  On the device side, should Apple and Google move toward free, ad supported devices, traditional makers like Motorola will struggle to manufacture hardware at anything approaching a profit, no matter what operating system is used.

Today I read something I had not heard about previously, speculating on Apple’s strategy for its iPhone and related businesses via analysis of a recently filed patent application.  Today on MobileMarketingWatch.com an article titled, “Apple’s Secret Plans For Mobile Marketing- Ad-Supported Hardware Possible?” describes something called an “enforcement routine,” which when implemented would require users to receive, view and acknowledge advertising messages before accessing a device’s functions.

While that sounds cumbersome and unappealing, the implication is that Apple may be seeking to subsidize in part or fully the cost of iPhones and other devices via “ad supported hardware.”  The article cites recent word that Apple was in discussions with AdMob before it was acquired by Google as evidence the company is interested in moving in this direction.  It’s also tacit acknowledgement that the real money is in advertising, ala Google, as opposed to creating costly proprietary hardware and software.  With ownership of its ecosystem, Apple would seem positioned well to execute on this strategy.

Should this happen, it would be very hard for device makers like Motorola to earn a profit.  You might imagine Google getting into the device business at some point, following a similar strategy.  For marketers, it would offer a much more visible presence on consumer handsets, elevating the value of such advertising to levels seen in the wired web world.

*(Cross-posted with John Wood’s personal blog)*

The mobile industry is exploding. In just a few short years, everybody will have a smart phone. A tiny, internet connected, mini computer right in their pocket. As each month passes, we learn more and more about what the future of this industry holds, and what the mobile handset landscape will look like. If one thing is for certain, it’s that nothing is for certain.

As it stands right now, Apple is king with consumers. Though not the first ones to market with an internet connected mobile device (the Blackberry has been around for a long time, and still holds the majority of the smartphone market share), Apple appears to be the first to really understand what the average, non-corporate consumer wants. A true mini computer. An open device that can play music, run applications, take photos, and provide a pleasant web browsing experience. And they did it in true Apple fashion, making the device extremely easy to use. As a result, the iPhone has become extremely popular with consumers, and is widely considered ”the device to have”.

With the majority of people still without a smartphone, much of the market remains up for grabs. Apple’s competitors are scrambling to catch up, trying to ensure that they they get a piece of the pie. But, one very important question lingers. What can Apple’s competitors offer that would give the average consumer a reason to buy their device instead of buying an iPhone? To me, the reasons are few, and becoming fewer.

(I’d love to hear your reasons in the comments. So please, chime in.)

A comparable feature set

This pretty much goes without saying. Any challenger to the iPhone crown must offer similar features to that of the iPhone. It is very unlikely that a competing device will lure anybody away from the iPhone if it is missing a feature that is now expected to be there. The device must be capable of running apps, taking photos, playing music, etc, for it even to be considered.

A better network

AT&T’s network leaves much to be desired. Having never been an AT&T customer, I can only relay the opinions of my friends and family who are AT&T customers. However, their opinions are one in the same. I’ve not heard a single word of praise when it comes to AT&T’s network. All of my friends and family with iPhones have expressed frustration that the device they love is frequently crippled by a network that is spotty and congested.

It’s no secret that Apple has an exclusive agreement with AT&T, and that agreement has an expiration date. Rumors have been circulating about a jump to another carrier, possibly Verizon, sometime next year. The more wireless carriers offering the iPhone, the less valid of a reason this will become for not purchasing one.

A comparable application ecosystem

Competing devices will need to have an application ecosystem that is at least comparable to the iPhone’s. This is no small task. There are over 100,000 applications in the App Store. Sure, several offer the same functionality, and many are of very poor quality. However, nobody can argue with Apple’s tag line of “There’s a app for that”. There really is an application, in most cases many, for everything you could possibly want to do with your iPhone.

Given their head start, beating Apple at this game will not be easy. Google’s Android OS currently stands the best chance of challenging Apple on this front, with over 10,000 applications already available. The Android OS is open, and capable of running on hardware from any manufacturer. In addition, applications written for Android are capable of running on any device that runs the OS (for the most part). Next year is going to be a big one for Android, with several new devices coming to market from many different manufacturers. Some analysts are even predicting that the number of Android devices in the hands of consumers will surpass the number of iPhones by 2012. This will no doubt attract more application developers to the platform.

However, Android has its own set of challenges awaiting. The fact that manufacturers are free to run Android on devices with very different hardware specifications (screen size, input controls, etc) poses a major challenge for application developers. Perhaps the risk of rendering thousands of existing Android applications useless by releasing a device with dramatically different hardware specs will be enough to convince manufacturers not to do it. Perhaps Google will provide a set of Android APIs that can help application developers deal with this issue. Perhaps a set of best practices will emerge as a guide for developers looking to tackle this issue. Perhaps we’ll see something similar to the PC application market in the mid-late 90′s (and the Blackberry application market today), where only certain devices will be capable of running certain applications. Only time will tell if these issues will prevent the development of the Android application ecosystem.

A killer feature

One wild card that is always in play is the killer feature. Apple’s competitors are only one, innovative, killer feature away from stealing the spotlight for themselves. By “killer feature”, I mean a feature so awesome that when you see it in action, you say to yourself, “I need one of those!”.

Version 2.0 of the Android OS took a stab at this with the introduction of Google Maps Navigation. A fantastic feature, Google Maps Navigation morphs your mobile device into a fully functional GPS unit, complete with a synthesized voice telling you where to go, real time traffic information, and several map overlays showing you the location of everything from ATMs to gas stations. But, is this a killer feature? Frankly, I’m not sure. But, its announcement was enough to cause a significant drop in the stock price of traditional GPS manufacturers, and it certainly has potential.

An incredibly easy to use device

Making devices that are intuitive and easy to use has always been one of Apple’s strengths. Look no further than the iPod for an example of this. Competing devices will need to be as easy to use as the iPhone is to appeal to the average consumer.

How do I get my music onto the device? How to I get the photos I take off? These operations should be simple and intuitive. Motorola’s new Android 2.0 device, the DROID, is seriously lacking in this area. Several steps are required to store data on or pull data off of the device:

For the iPhone, the list of steps is much smaller.

Are the steps required to store data on the DROID too much to handle for an experienced computer user. No, of course not. But, there is still a large percentage of people out there who would struggle with completing those tasks. Believe me, I know. Many are family and friends of mine who I help complete “simple” tasks on their computers all of the time. These people make up a significant portion of the market. If you want them to buy your device, then you have to make it stupid simple to use.

Summary

Apple has set the bar high with the iPhone, very high. While I can think of several reasons why developers and techies would prefer a different device, I can’t think of many reasons why the average consumer would. And, there are a lot more average consumers than there are geeks.

But make no mistake, Apple’s competitors have the iPhone in their sights. The tide can shift very quickly in this market, especially since most people get a new phone every couple of years. Will the iPhone challengers be able make a dent in the iPhone’s market share? Or, will the iPhone be the de-facto standard for smart phones? Only time will tell.

As our hometown Chicago Bears gear up for another season, I am reminded of the now infamous Super Bowl television ad spot which launched the Apple Macintosh computer in 1984.  It was a poignant event in the history of personal computing and marketing more generally.  It also marked the start of a battle Apple would lose not to IBM (the target of this famous commercial) but to Microsoft.  Given all the comparisons between the early internet era and mobile that I read about on an almost daily basis, I thought a look back at what happened in the late 1980s/early 1990s might serve as an indicator of what may occur to mobile.

Back when text screen MS-DOS was the defacto PC operating system and the internet was just emerging, there were bulletin board systems (BBS) where people could exchange information using words.  It was very cutting edge at a time when the term “baud” meant something.  Shortly thereafter as Windows emerged as the PC’s user interface, online services CompuServe and America Online came into being as gateways to online communities, content and messaging, walled gardens of sorts.  These services offered local phone number connections to their communities, and the whole experience was bundled together making it easy for newbies.  Hmmm…text-based communications over a network followed by easy to use online walled gardens — these seem to parallel what we’ve seen already in the mobile space.

Fast forward, and as bandwidth increased, the graphical web emerged (remember Netscape?) and email became the standard for internet communication, everything got big really fast (the number people online, the number of companies involved and the amount of money flowing in and out).  BBS systems and online services are now really just quaint reminders of how it all got started.

Mobile is of course different in that telcos control consumer access to the types of devices, software and network access offered (voice, text, mobile web).  And aggregators provide the keys to the marketer’s car, offering a single route to mobile users over a variety of networks.  Yet, a time is coming soon when broadband internet access via cheap mobile devices with rich graphical interfaces will be commonplace.  Such an event will likely trigger an explosion similar to the 2000 time period because the applications for consumers and businesses will be nearly endless.

In this world, what roles will walled gardens, aggregators, text messaging, and proprietary platforms play?  When consumers have access to rich mobile web experiences without limits on who can see what, including diverse device appropriate web-based applications and services, probably not much.  Telcos will take their rightful place in the world as the utilities they are – large scale services providers.  It’s already happening.  AT&T offers its U-verse service inclusive of television, land line phone, internet and mobile access.  It is not trying to create a gated community for advertisers, it’s focusing on what a utility does best – make access easy and affordable to as many consumers as possible.

What role will Apple play amid an environment of easy access and device choice?  Apple’s current day nemesis appears to be Google and its Android mobile operating system, rather than Microsoft.  If Google executes a Microsoft like plan to provide rich internet experiences on mobile devices without limits, Apple may see history repeat itself except this time it won’t be the Mac which loses, it will be the iPhone.

For marketers, this story has a happy ending as they will ultimately benefit from an interaction channel unhindered by the roadblocks between them and their customers today.  Focus will shift entirely to effective mobile customer experiences, so devices and their capabilities will play central roles in the future of mobile marketing (unlike my prediction in this recent blog post).  It’s a good thing we can learn from our mistakes.  Marketers would be wise to partner with firms that anticipate this day, and are developing innovative approaches to engaging customers in effective mobile dialogues.

FierceDeveloper published an excellent article today titled “Pulling back the curtain on App Store approvals“, which provides some excellent insight into Apple’s App Store approval process. I found the most interesting piece of the article to be the stats that Apple provided to the FCC in response to it’s recent request for more information on the rejection of the Google Voice app:

Let’s do the math: According to Apple, it employs about 40 full-time, trained application reviewers–the App Store receives about 8,500 new app submissions and updates each week, which translates to 212 apps per reviewer per week. Except Apple reports that all apps are subject to approval by two different reviewers, so that number doubles to 424 apps per staffer each week–assuming reviewers work the standard eight-hour day, that means each app is approved or rejected in the span of about six minutes. No wonder Apple admits to making “occasional mistakes” in the approval process, according to its statement to the FCC.

Given the shear volume of applications that Apple reviews on a daily basis, it’s no surprise that developers encounter such varying experiences with the submission and approval process. In our experience, the process has been very straightforward and time expedient. One application was submitted to the App Store and live within seven days. In our opinion, the process works pretty smoothly as long as you follow Apple’s Human Interface Guidelines and code around common issues that apps are rejected for.

Other interesting tidbits:

• In the past year, Apple has reviewed more than 200,000 applications and updates
• 95 percent of all apps are approved within 14 days of submission
• Roughly 20 percent of apps are not approved as originally submitted