iphone apps: new media life cycle analysis

New Media Life Cycle Analysis August 6, 2009

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iPod Apps TooNot only has Apple

changed the mobile landscape with the launch of the application store (or app store), but they’ve brought other ‘connected’ devices into the loop as well.

Even the iPod Touch, which uses a wi-fi connection to access the internet supports many of the applications developed and distributed through the app store in iTunes.

The iPod Touch is almost exactly like the iPhone - without the hassle of monthly charges for cell phone service. However, that doesn’t necessarily mean you can’t make a phone call.

Skype launched an app that allows you to make internet calls right from your iPod Touch. ■

iPhone Apps

The iPhone and Apple’s iTunes App Store have created a whole category for mobile phone applications, commonly called mobile apps.

The concept is simple: allow developers to create applications for the iPhone platform and distribute those apps through a branded content aggregator.

Apps can be sold through the same channel as music and movies and can easily be installed on any iPhone.

The hype for the App Store started in 2007 and the channel for distributing applications through iTunes launched in July of 2008.

Since then, more than a billion applications have been sold through the channel and with the launch of the latest iPhone the search for iPhone apps has seen another meteoric rise. ■

Channel Overview

iPhone Apps: A Category Creator


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Content Potential

As you already know the excitement surrounding the iPhone App as a distribution channel for great content has created an explosion in corporate marketing executives’ desire to play in this space.

However, few corporate apps use the platform to accentuate the capabilities of a connected device.

One standout: Nationwide Insurance’s mobile application designed to help you capture the details in a stressful situation: right after you get into a car accident.

Another branded iPhone application that hits the mark is called Drinkspiration. Absolut

Vodka is behind this one. The concept here is that the context in

which you are ordering a drink should define what you’re drinking. It’s nicely executed and cleverly branded.

The keys to developing successful, branded iPhone applications hinges on these concepts:

• Focused content scope• Use case modeled around a

mobile experience (you’re at a bar and need a drink, or you just got in an accident what do you do?)

• The content already exists, you’re just using a new platform

• Any tool you’re developing has a practical use for a well-defined audience

• If it’s not the best medium to deliver the content - don’t do it. ■Nationwide iPhone application: Get

help in an accident.

Ensuring that Mobile Access is the Focus of Your App

Drinkspiration spices up your drink variety.

Secure Access to your USAA account. Play Scramble $om your phone with your $iends on Facebook.


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As you can see in the life cycle analysis above, mobile applications as a category are in the experimentation phase. The iPhone App Store and the large volume of applications available on a single platform, combined with the ease of use and wide acceptance of the apps themselves have pressured other smart phone manufacturers to enter the game.

Google with their G1 phone running the Android operating system, Research In Motion with their Blackberry phones and Palm with their Palm Pre have all developed their own platforms for the creation and distribution of mobile apps.

Mobile applications are here to stay. Nevertheless, there is a tremendous amount of growth expected in this market as it moves from Experimentation to Adoption.

Blackberry, with it’s wide acceptance and adoption in corporate environments, might be the best place to develop and deploy business to business

mobile applications at the enterprise level. Palm, although it has seen a long term slide in adoption from it’s early dominance in the smart phone category, has redefined their product and introduced the Palm Pre as its latest platform supporting the development of mobile applications. Google’s Android platform showed early promise however, the quality of applications deployed on the Android platform, to date, is low.

Moving forward, developing mobile applications will provide organizations with tremendous opportunities to deliver valuable content right to the palm of your hand.

This category is so new that rushing to develop a mobile application if it is not core to your business might be de-focused and not worth the effort. Waiting by the sidelines and letting the industry evolve is a recommended course of action.■

Medium Overview

Mobile Apps Have A Lot of Growing To Do

Mobile App Interest

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Mobile apps Palm apps Pre apps Blackberry apps Android Apps

Excluding iPhone apps from consideration, neither Palm nor Blackberry have differentiated themselves as an application platform.

Source: Google Insights


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iPhones represent a relatively small percentage of the global sales in mobile phones. Today, iPhone’s represent only 1.1% of the global cell phone market. Blackberry also only captures 1.9% of the market. As a result, mobile application growth will be limited by the growth for the platforms that support them.

As you can see from the New Media Life Cycle above, the iPhone App platform is in it’s Gestation Phase. With each new iPhone released, giant spikes in interest are apparent, however, the overall growth in app adoption remains relatively constant. Without growth in the Mobile Application development market from competitors like Blackberry, Android

and Palm, it is unlikely that iPhone Apps can drive through the escalation phase.

Although the App Store’s monetization model appears to be extremely successful the iPhone’s current pricing structure does not allow for massive market dominance. This monetary barrier to entry will stifle the growth for their mobile applications. Moving through escalation and watching how Apple’s competitors attack the monetization of their mobile applications will define how successful Apple will be in the long term. ■

Phase AnalysisiPhone Apps in Gestation: Limited by Platform Adoption

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Technology Trigger

Path to Inflated Expectations

Superimposed on the Tippingpoint Labs New Media Life Cycle is the Gartner Hype Cycle. As interest in iPhone Apps peaks, people will ask, “what now?”, prompting a sharp decline in the interest of iPhone apps. When that happens, many of marginally successful apps will go out of style. Don’t be a marginal app.

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Gartner Hype Cycle



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If you’re looking to reach a young audience, the iPhone is a great place to be creating valuable mobile apps. Teens, between the ages of 13 and 17 make up about 23% of their users. This is above average for mobile platforms. Meanwhile, 34% of there users are aged 18-34.

Not surprisingly, iPhone users have high household incomes with 28% of their users bringing in more than $100K a year. ■

Audience Analysis

iPhone’s Trend Young, High HHI

53% 47%MaleFemale

28%

31%

25%

16% $0-30K$30-60K$60-100K$100+

14%

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23%5% 3-12

13-1718-3435-4950+

Gender Income

Age

Source: Quantcast


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Platform MomentumApple’s app store has enjoyed tremendous

momentum with the last two iPhone releases. However, without growth in the Mobile Applications category, this momentum will stagnate and adoption will slow down. Unless Apple drops their iPhone prices further, the iPhone may be stuck around 2% adoption in the market.

Competitive ThreatsThe smart phone market is highly competitive

and the only thing holding back Blackberry, Palm and Android from tremendous Apple-like growth is the creation and distribution of high-quality mobile applications developed for their platforms.

ExposureThere is no doubt that the iPhone has garnered

tremendous exposure since it’s debut. The product redefined the category with an easy-to-use interface that captured the media’s attention. However, with that tremendous exposure and the explosion in

applications in the App Store, it’s harder and harder to find high-quality applications that drive long term use. Recent exposure about Apple’s denial of development for the Google Voice app resulted in a large pushback and some negative exposure that showcases their control over the development and distribution of iPhone apps that might have many developers looking for alternative platforms.

User PressureApple has always maintained a loyal following of

fans. However, “jail breaking” iPhones will continue to represent a major threat from a user-base outside of the traditional Apple fans looking to expand the capabilities of the phone outside of Apple’s purvey. ■

Key Forces

Overexposure & Competitive Threats

Channel or Platform

Competitive Threats

• Creation and Distribution of high quality mobile apps

Exposure

• Easy-to-use interface captures media attention

• Apple’s Google Voice rejection

Platform Momentum

• Last two iPhone releases

• Required: Mobile Application growth

User Pressure

• Jail Breaking


TIPPINGPOINT LABS

Apple is unpredictable, however, unless the market for both smart phones and mobile apps grows Apple’s iPhone will only slowly grow.

The iTunes App Store has seen tremendous growth with new mobile apps added everyday, however the plethora of applications has resulted in an over saturated market making it difficult to stand out.

Only the most well-designed, highly effective, platform-centric applications bubble to the top making developing a new iPhone application difficult and wide adoption unlikely.

With a younger, non-corporate audience dominating the iPhone market, corporate applications will have trouble finding an audience in the iPhone user-base.

So far, Palm, Blackberry and Android have had trouble finding the right applications to push growth. This is a direct result of trying to replicate the iPhone’s mass market appeal. Business-to-business applications in the Blackberry market look to be stand out success stories, if they can avoid getting sucked into the iPhone’s momentum.

Forecast Analysis

Stagnant Growth Dependent on Competitor’s Success

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iPhone app interest has flat lined and will need growth in mobile application interest before hitting escalation.



TIPPINGPOINT LABS

Apple’s iPhone is all the rage. There is no doubt about it. However, along with the tremendous attention and momentum it has garnered comes some opportunities to those looking for a break out hit.

High Volume Low QualityWith the tremendous volume of iPhone apps

comes the realization that only a small percentage of the applications are high-quality. It’s very hard to stand out in this environment unless you have a killer application (read high-cost.)

Blackberry & AndroidIt is our recommendation that if you would like

to experiment with the deployment of a mobile application that you look to the Blackberry and Android platforms. If you can create a high-quality application, that either platform can highlight as a tremendous success, you may become the poster-child for these other mobile application channels. With this comes marketing and advertising from major players in the mobile space and the opportunity to grow the mobile application market.

Stay Away Until it MaturesAlternatively, we recommend you stay on the

sidelines while the mobile application market matures. Developing applications for any of these platforms is still risky and each platform has a lot of growing to do.

Recommendations

Look to Other Platforms For Breakout Success


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Glossary

TerminologyMedium - A form of communication. Tippingpoint Labs focuses on New Media. Example: Blo%ing, video on demand.

Platform - a framework for a medium’s application. Example: The iPhone is a platform for the mobile application medium.

Channel - The service provider of a medium. Example: Scribd is a channel for document sharing.

Content - Medium expression. Example: A blog post is content delivered through the blo%ing medium.


Inside This ReportEach week, the analysts at Tippingpoint Labs release a New Media

Life Cycle report designed to help marketing professionals understand the new media landscape.

These reports use empirical data and a sound methodology to help ad agencies, PR firms, marketing consultants, interactive agencies and chief marketing officers make educated and informed new media decisions.

Each report looks at the quality of the content on the channel, the state of the medium, an anlysis of the life cycle and the audiences participating on the platform, the key forces shaping the channel, a forecast for the channel’s future and sound content recommendations for participating by adding value.■

Key Areas AnalyzedChannel Overview

Content Potential

Medium Overview

Phase Analysis

Audience Analysis

Key Forces

Forecast Analysis

Recommendations

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iphone apps: new media life cycle analysis

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