Why Amazon and Facebook will be disruptive forces in 2012: Forrester

Amazon Appstore for Android

The Amazon Appstore for Android

Amazon and Facebook could disrupt the mobile landscape in 2012 becuase of their potential to challenge the existing app stores, according to a new report from Forrester Research.

One of the key trends in mobile this year will be the arrival of several newcomers who are likely to challenge the incumbents that want to hold onto or gain share in their categories, according to Forrester's 2012 Mobile Trends for CPS Professionals, report. For example, Amazon and Facebook, by taking advantage of their strengths in using social recommendations and personalization to create new tools, could facilitate app discovery and pose a challenge to the established app stores.

  “Both companies have the ability to create an ecosystem platform play, leveraging their key assets - cloud-based capabilities and ability to personalize content for Amazon, massive mobile audience and experience in working with web developers to distribute content virally for Facebook,” said Paris-based Thomas Husson, a senior analyst at Forrester Research.

“They will increasingly compete with existing app stores to facilitate mobile services’ discovery,” he said.

“Such a trend is likely to accelerate for Amazon in 2012 with the Amazon Appstore for Android and to start for Facebook, but scalability will be linked to the development of HTML5 in the years to come."

Limited NFC growth 
Amazon and Facebook both already have some of the pieces in place to create an ecosystem platform for delivering content.

However, Forrester does not expect Amazon will be successful at replicating its Kindle approach in the crowded smartphone space or that Facebook will make a hardware play.

Amazon could leverage its cloud-based capabilities and its ability to personalize the user experience on top of its existing application store approach while Facebook could leverage its audience of 425 million mobile users to become a mobile distribution platform.

There are likely to be disruptive forces at work in the payments space as well, with new digital wallet business models emerging, according to Forrester. The battle to control those digital wallets has already begun among telcos, card networks, banks, and Internet pure players such as Google Wallet or PayPal.

However, NFC is not expected to live up to the hype, with the growing, but limited, installed base of NFC devices barely moving the needle on usage in 2012.

Limiting growth for NFC will be a poor out-of-the-box experience, lack of consumer education and NFC infrastructure.

As a result, NFC will mostly be used in the near term for peer-to-peer sharing and content distribution — which can also be accomplished without expensive infrastructure.

In the short term, Forrester recommends companies consider alternatives technologies such as QR codes for prompting interactions between consumers and the real world.

The emergence of a third major mobile operating system this year or soon after could be another disruptive force. However, Forrester does not expect Microsoft’s Windows Phone 7 to establish itself as the third platform in 2012.

Mobile fragmentation will continue to be an issue for companies in 2012, making it a challenge to decide where to invest their development dollars.

Need for innovation
Large corporations and, increasingly, small and medium-size businesses recognize the growing importance of mobile.

However, while mobile is generating both substantial Web traffic and revenue for consumer-facing companies, mobile remains a small fraction of overall revenue.

As a result, engagement will continue to be the initial focus for many companies in mobile.

Companies need to develop a scalable approach for delivering mobile services as increasingly more parts of the organization will want to tap into the potential of mobile.

Organizations will also need a strategic approach to spreading institutional knowledge, governance for the development of mobile services and to define key performance indicators to measure the success of mobile initiatives.

While many companies have replicated the offerings of their competitors in mobile, companies must also increasingly look to differentiate themselves in mobile.

Companies should quantify the convenience of their services and make sure they reduce barriers to usage while maximizing consumer benefits in order to provide differentiation.

“According to a survey we conducted among 240 executives in charge of their company’s mobile strategy, 38 percent still consider ‘appearing as innovative’ as one of their top priorities for their mobile strategy,” Mr. Husson said.

“Now that most brands have started to define a mobile presence, the challenge to me looks less as willing to appear innovative and more so to scale mobile consumer opportunities and to measure the ability for mobile to increase customer engagement and satisfaction,” he said.

Final Take
Chantal Tode is associate editor on Mobile Marketer, New York

News Editor Chantal Tode covers advertising, messaging, legal/privacy and database/CRM. Reach her at chantal@mobilemarketer.com.