Mobile Web users are ready for enterprise development
Enterprise companies are wasting too much time and development expense on mobile applications, while potentially missing a larger brand opportunity ? a device-agnostic mobile Web experience.
Development of commercial applications, as we know them today, will soon be dying. Many companies just do not know it yet.
How is this possible when applications are being downloaded at an increasing pace nationwide?
The general purpose of applications across all mobile and mobile Internet devices is to enable a PC-like experience. As the penetration of smart and super phones rapidly grows, device capabilities still outstrip on-deck functionality. Applications meet consumer needs, but only in small bursts.
This is not a new plotline.
When residential Internet was in its infancy, a major component of the appeal was the enablement of freeware downloads and try-before-you-buy software. Eventually the experience itself, beyond enablement, became the primary driver of home usage.
Mobile phone capabilities have increased significantly over the last few device generations, with customer adoption of smarter phones with operating systems such as Apple and Android dramatically outpacing the more modest offers from Nokia, BlackBerry and Palm.
This next generation of phone is more stylish and faster, with bigger screens, more memory and better ease of use.
Apple?s iPhone was the initial catalyst for this change, driving users and usage which, in turn, inspired competition from other device and OS manufacturers.
Carriers are incentivized to deliver smartphone devices at low price points, as the monthly voice and data average revenues per user ? ~$30-$50 ? justify only so much upfront subsidies of manufacturing costs.
Current U.S. smartphone penetration rate is approximately 25 percent. It is expected to grow to 50 percent by the end of 2011, excluding tablet devices such as the iPad.
We believe mobile applications are a stop-gap solution for early smartphone adopters.
While smartphones are capable devices, they have delivered a lackluster mobile Web experience.
Apple, enabled by strong iPhone device sales and a massive iTunes customer base, enhanced the value of its phones by encouraging third-party application development and distribution. Google, Palm, Samsung, Microsoft and other application stores emerged soon after.
These stores continue to generate revenue.
A 2010 AdMob Mobile Metrics Survey shows that of users who pay for applications, Android users average $8.36 and iPhone users average $8.18 monthly.
These two groups also combine for an average of around 80 minutes per day of application usage.
Free application downloads, however, dwarf paid applications at roughly 7 to 1 for both Android and iPhone.
The implication is that most users desire enhancements to their mobile experience beyond the on-deck tools to the tune of $2 billion in 2010, according to Parks Associates.
So why is this model likely to be unsustainable for enterprises?
Although it has been a long time coming, the mobile Web is finally nearing a ready-for-prime-time state. This will not entirely displace mobile applications.
Applications continue to provide a consistent delivery of functions across operating systems.
With newer smartphones, users are downloading enterprise applications as high-end mobile bookmarks, enabling one click access for common tasks.
For instance, Starwood has applications on the iPhone and BlackBerry devices which allow users to access travel information, check their Starpoints balance and get door-to-door directions to hotels. This is a consumer friendly, one-off solution.
But heavy traveling users require a multitude of applications for all of their travel needs occupying significant real estate ? Marriott, Hilton, Thrifty, Delta Air Lines, Travelocity, AirTran, Continental, Diners Club, Orbitz, Avis, United Airlines, Southwest Airlines, Visa, USAirways, Ritz-Carlton, MasterCard, Choice Hotels, American, Hyatt, Expedia, Hertz, Holiday Inn, Ruth?s Chris, JetBlue, Kayak, Courtyard, Amtrak, BoltBus, DoubleTree. You get the picture.
The good news for mobile consumers is that the mobile Web experience is getting significantly better and more consistent across operating systems and devices.
Mobile browsers, particularly those that support the HTML5 standard, are more capable of delivering a PC-like Web experience. This standard includes many improvements over previous Web standards.
Most notably, video can be embedded directly into Web code without third-party applications such as Adobe Flash or Microsoft Silverlight.
The new HTML5 standards yield better Web site rendering for different screen sizes from mobile phones to televisions and support geo-coding for embedding location-specific content and often do not require the use of a mouse.
Without HTML5, mobile Web display is challenging, often wholly unsupported by the carrier or device manufacturer.
In short, Web sites created in the HTML5 standard are designed with mobile in mind.
The development switch is already underway.
The most popular applications across all operating systems currently are Facebook, Google Search, Google Maps, The Weather Channel, Pandora, ESPN and YouTube.
Each of these applications, including streaming content such as Pandora or YouTube, can and will be replaced by the mobile Web experience as users migrate back to their mobile browsers.
For corporations, developing applications across five major operating systems is no small feat.
Companies looking to leverage the mobile space to further their brand should focus on creating a device-agnostic mobile Web experience rather than on application deployment.
To ensure a successful future mobile roadmap, organizations should begin to focus on creating a better and ubiquitous Web experience from PC to mobile which will bring more brand value than deploying an occasionally downloaded, under-used mobile application.
Eric M. Pizzi is an associate at Marconi Pacific, a Chevy Chase, MD-based strategy consulting and venturing firm focused on telecommunications, media and technology. Reach him at .