Mobile Internet Forum 2009: Is there a place for mobile applications?

At the Mobile Internet Forum in Vienna this week, I attended a panel discussion called Users Don’t Download Apps! The topic is something that’s been on a lot of people’s minds of late – do native apps have a place when the mobile web browsing experience is coming closer and closer to the on-line web? Sergio Falletti, Commercial Director of Future Platforms, with Saadi Hussain, Head of Commercial Propositions, BT Global Services and Roland Pickl, CEO, IP Square had a lively debate about it, chaired by mobile advertising evangelist and blogger Andrew Grill.

Saasi: I deal with the enterprise sector, so I’m focused on the business end of mobile apps rather than the consumer end. At BT we’re seeing much more use of web-based solutions than apps. Web-based services have a better audit trail,and better scalability. For the enterprise sector we’re looking at many more apps where you access it from the web rather than downloading it. Enterprise sector wants apps that perform a function on a handheld, but with all the backend stuff being done in the cloud.

Roland: IP Square is focused on creating web-based apps. Most users primarily think of their handheld as a device for communications from person to person. The problem with smartphones is that without being online, a lot the communications functions on the device don’t work. All the most popular apps we can think of are either for entertainments value or have to be somehow connected to the net to work. If those apps are already connected, why not just use the browser? We think that the best way of geting apps out to the public is by providing a standard website where they people can access their apps on line.

Sergio: At Future Platforms, the work we tend to do is for consumer markets, so we’ve been paying close attention to where the audience is. It’s strange, because 18 months ago everyone was saying that apps were dead, and that everything was going to be browser-based from now on. Then the iPhone arrived, and everyone is talking about apps left right and centre. Now with Bondi coming along, and APIs being opened up, we’ll probaby see more of a shift towards the browser.

At this point, Andrew asked how many people in the room used an iPhone. Out of more than one hundred people, only 3 people in the room had iPhones!

Andrew: Are app downloads a normal user experience?

Saasi: In BT we have seen a lot of wariness from consumers when it comes to app downloads. They ask questions like “is this thing I’ve downloaded full of bugs?”. Then there’s data tariffs, which is a real deterrent. People are used to downloading games and ringtones, they’ve been doing it for years. With downloading apps it’s still a new market. There are security issues, and whether or not something comes from a “trusted service” becomes very important.

Roland: When talking about things like security and backend services, I think the best approach is to open those interfaces to the browser, like on the fixed web. As long as the trust issues are there, there will be problems.

Sergio: Why is it that 90% of the mobile audience don’t know about apps? Compared to the size of the audience, they are not common knowledge. There are a couple of reasons for this. One is the “rest of the world vs. the West”. In the West, users are not desparate enough to get over the barriers in the way. In Indonesia or India, where the on-line web is very rare and the mobile Internet is the primary experience of the net, they will go much further out of their way to get involved with apps. In the West the biggest problem is discovery, not security. Trying to find an app on a Nokia handset is much more difficult than it should be.

Andrew: So do we need better discovery? Have app stores become the new walled gardens?

Sergio: The problem is that there hasn’t been enough access to the market. We’ve been working for 2 or 3 years with a UK company called Trutap. They tried to launch for a few years, but got no traction. But only a few months after putting their app on GetJar for free, they got hundreds of thousands of downloads… mostly from developing countries. Moving to an open platform really worked for them.

Saasi: One of the only ARPUs that is going up at the moment is mobile downloads. So, of course, the operators are moving in there. It’s in their interest to create a walled garden and protect that revenue. If they can stop you from creating something using “security” as an excuse to keep you out, that’s in their benefit.

Andrew: With consumers now in control of what they download, is there any point in trying to restrict them?

Roland: The only thing necessary for consumers to start accessing apps in a big way, is for operators to realise they don’t NEED walled gardens. Things like payment authentication and LBS are good services - you can charge the users for this if the app is GOOD, and they will happily pay. So long as it has sustainable value for the customer, they will pay.

Saasi: The most important thing is for the operators to be a trusted service integrator. What we really don’t want is for users to have such a bad experience that we destroy our own the market for the next 5 years. So that means we need strong standards for apps. We don’t want bad apps driving people away.

What we think?

It was a very interesting discussion to attend. The overall impression was that while there is a market for mobile applications, it may not be in the West! Security issues, coupled with the fact that Western users are far more used to the on-line web, are major barriers.