Mobile applications, RIP

Summary: The business of making native apps for mobile devices is dying, crushed by a fragmented market and restrictive business practices. The problems are so bad that the mobile web, despite its many technical drawbacks, is now a better way to deliver new functionality to mobiles. I think this will drive a rapid rise in mobile web development, largely replacing the mobile app business. This has huge implications for mobile operators, handset companies, developers, and users.


The decline of the mobile software industry

Mobile computing is different from PC computing.

For the last decade, that has been the fundamental rule of the mobile data industry. It was the central insight of Palm Computing's "Zen of Palm" philosophy. Psion came up with similar ideas, and you can hear echoes of them from every other successful mobile computing firm: Mobile computers are used differently from PCs, and therefore must be designed differently.

We all assumed this also meant mobile devices needed a whole mobile-specific software stack, including an operating system and APIs designed specifically for mobility, and native third-party applications created from the ground up for mobile usage.

That's what we all believe, but I'm starting to think we got it wrong.

Back in 1999 when I joined Palm, it seemed we had the whole mobile ecosystem nailed. The market was literally exploding, with the installed base of devices doubling every year, and an incredible range of creative and useful software popping up all over. In a 22-month period, the number of registered Palm developers increased from 3,000 to over 130,000. The PalmSource conference was swamped, with people spilling out into the halls, and David Pogue took center stage at the close of the conference to tell us how brilliant we all were.

It felt like we were at the leading edge of a revolution, but in hindsight it was more like the high water mark of a flash flood. In the years that followed, the energy and momentum gradually drained out of the mobile applications market.

The problem wasn't just limited to Palm; the level of developer activity and creativity that we saw in the glory days of Palm OS hasn't reappeared on any mobile platform since. In fact, as the market shifted from handhelds to smartphones, the situation for mobile app developers has become substantially worse.

That came home to me very forcefully a few days ago, when I got a call from Elia Freedman. Elia is CEO of Infinity Softworks, which makes vertical market software for mobile devices (tasks like real estate valuation and financial services). He was one of the leaders of the Palm software market, with a ten year history in mobile applications.

I eventually moved on from Palm, and Elia branched out into other platforms such as Blackberry. But we've kept in touch, and so he called recently to tell me that he had given up on his mobile applications business.

Elia gave me a long explanation of why. I can't reproduce it word for word (I couldn't write that fast), but I've summarized it with his permission here:

Two problems have caused a decline the mobile apps business over the last few years. First, the business has become tougher technologically. Second, marketing and sales have also become harder.

From the technical perspective, there are a couple of big issues. One is the proliferation of operating systems. Back in the late 1990s there were two platforms we had to worry about, Pocket PC and Palm OS. Symbian was there too, but it was in Europe and few people here were paying attention. Now there are at least ten platforms. Microsoft alone has several -- two versions of Windows Mobile, Tablet PC, and so on. [Elia didn't mention it, but the fragmentation of Java makes this situation even worse.]

I call it three million platforms with a hundred users each (link).

The second technical issue is certification. The walls are being formed around devices in ways they never were before. Now I have to certify with both the OS and with each carrier, and it costs me thousands of dollars. So my costs are through the roof. On top of that, the adoption rate of mobile applications has gone down. So I have to pay more to sell less.

Then there's marketing. Here too there are two issues. The first is vertical marketing. Few mobile devices align with verticals, which makes it hard for a vertical application developer like us to partner with any particular device. For example, Palm even at its height had no more than 20% of real estate agents. To cover our development costs on 20% of target customer base, I had to charge more than the customers could pay. So I was forced to make my application work on more platforms, which pushed me back into the million platforms problem.

The other marketing problem is the disappearance of horizontal distribution. You used to have some resellers and free software sites on the web that promoted mobile shareware and commercial products at low or no charge. You could also work through the hardware vendors to get to customers. We were masters of this; at one point we were bundled on 85% of mobile computing devices. We had retail distribution too.

None of those avenues are available any more. Retail has gone away. The online resellers have gone from taking 20% of our revenue to taking 50-70%. The other day I went looking for the freeware sites where we used to promote, and they have disappeared. Hardware bundling has ended because carriers took that over and made it impossible for us to get on the device. Palm used to have a bonus CD and a flyer that they put in the box, where we could get promoted. The carriers shut down both of those. They do not care about vertical apps. It feels like they don't want any apps at all.

You can read more of Elia's commentary on his weblog (link).

Add it all up, and Elia can't make money in mobile applications any more. As he told me, "Mike, it's time for you to write the obituary for mobile apps." More on that later.

Although it's a very sad situation, if Elia's experience were an isolated story I'd probably just chalk it up to bad luck on the part of a single developer. But it mirrors what I've been hearing from a lot of mobile app developers on a lot of different operating systems for some time now. The combination of splintering platforms, shrinking distribution channels, and rising costs is making it harder and harder for a mobile application developer to succeed. Rather than getting better, the situation is getting worse.

I've always had faith that eventually we would solve these problems. We'd get the right OS vendor paired with a handset maker who understood the situation and an operator who was willing to give up some control, and a mobile platform would take off again. Maybe not Palm OS, but on somebody's platform we'd get it all right.

I don't believe that any more. I think it's too late.


The mistake we made

We told ourselves that the fundamental rule of our business was: Mobile is different. But we lost sight of an even more fundamental law that applies to any computing platform:

A platform that is technically flawed but has a good business model will always beat a platform that is elegant but has a poor business model.

Windows is the best example of inelegant tech paired with the right business model, but it has happened over and over again in the history of the tech world.

In the mobile world, what have we done? We created a series of elegant technology platforms optimized just for mobile computing. We figured out how to extend battery life, start up the system instantly, conserve precious wireless bandwidth, synchronize to computers all over the planet, and optimize the display of data on a tiny screen.

But we never figured out how to help developers make money. In fact, we paired our elegant platforms with a developer business model so deeply broken that it would take many years, and enormous political battles throughout the industry, to fix it -- if it can ever be fixed at all.

Meanwhile, there is now an alternative platform for mobile developers. It's horribly flawed technically, not at all optimized for mobile usage, and in fact was designed for a completely different form of computing. It would be hard to create a computing architecture more inappropriate for use over a cellular data network. But it has a business model that sweeps away all of the barriers in the mobile market. Mobile developers are starting to switch to it, a trickle that is soon going to grow. And this time I think the flash flood will last.

If you haven't figured it out yet, I'm talking about the Web. I think Web applications are going to destroy most native app development for mobiles. Not because the Web is a better technology for mobile, but because it has a better business model.

Think about it: If you're creating a website, you don't have to get permission from a carrier. You don't have to get anything certified by anyone. You don't have to beg for placement on the deck, and you don't have to pay half your revenue to a reseller. In fact, the operator, handset vendor, and OS vendor probably won't even be aware that you exist. It'll just be you and the user, communicating directly.

Until recently, a couple of barriers prevented this from working. The first was the absence of flat-rate data plans. They have been around for a while in the US, but in Europe they are only now appearing. Before flat-rate, users were very fearful of exploring the mobile web because they risked ending up with a thousand-Euro mobile bill. That fear is now receding. The second barrier was the extremely bad quality of mobile browsers. Many of them still stink, but the high quality of Apple's iPhone browser, coupled with Nokia's licensing of WebKit, points to a future in which most mobile browsers will be reasonably feature-complete. The market will force this -- mobile companies how have to ship a full browser in order to keep up with Apple, and operators have to give full access to it.

There are still huge problems with web apps on mobile, of course. Mobile web apps don't work when you're out of coverage, they're slow due to network latency, and they do not make efficient use of the wireless network. But I believe it will be easier to resolve or live with these technical drawbacks in the next few years than it will be to fix the fundamental structural and business problems in the native mobile app market.

In other words, app development on the mobile web sucks less than the alternative.

Here's a chart to help explain the situation. Imagine that we're giving a numerical score to a platform, rating its attractiveness to developers. Attractiveness is defined as the technical elegance of the platform multiplied by how easy it is for developers to make money from it. The attractiveness score for native mobile app development looks like this over time:



This is why mobile app developers are in trouble. Even though the base of smartphones has been growing, and the platforms themselves have become more powerful, the market barriers have been growing even faster. So attractiveness has been dropping.

Now add in mobile web development:



Based on what I'm hearing from mobile developers, the lines just crossed. The business advantages of mobile web development outweigh its technical limitations. More importantly, if you look at where the lines are going, the advantage of mobile web is going to grow rapidly in the future.

I'm not saying all native mobile development is dead. In fact, we're about to see the release of Apple's native development tools for the iPhone, and as Chris Dunphy just pointed out to me, they are sure to result in a surge of native development for that platform. But I think even a rapidly-growing base of iPhones can't compare to the weight of the whole mobile phone market getting onto a consistent base of browsers.


What it all means

If you're a mobile developer, you should consider stopping native app development and shifting to a mobile-optimized website. That's what Elia did, and he said it's amazing how much easier it is to get things done. Even mobile game developers, who you'd think would be the last to abandon native development, are looking at web distribution (link; thanks to Mike Rowehl for pointing it out).

See if you can create a dumbed-down version of your application that will run over the mobile web. If the answer is yes, do it. If the answer is no, try to figure out what technology changes would let you move to the web, and watch for those changes to happen.

There are exceptions to any rule, and I think it makes sense to keep doing native development if your app can't work effectively over the web, and it's a vertical application so popular that you can get about $50 or more in revenue per copy. In that situation, you probably have enough resources to stay native for the time being. But even you should be monitoring the situation to see when you can switch to the web, because it will cut your expenses.

If you're a mobile customer, make sure your next smartphone has a fully functional browser that can display standard web pages. And get the best deal you can on a flat-rate data plan; you'll need it.

If you're an operator or a handset vendor, get used to life as a dumb pipe. By trying to control your customers and make sure you extract most of the revenue from mobile data, all you've done is drive developers to the Web, which is even harder to control. You could have had a middle ground in which you and mobile developers worked together to share the profits, but instead you've handed the game to the Google crowd.

Congratulations.


Oh, about that obituary...

In loving memory of the mobile applications business. Adoring child of Java, Psion, Palm OS and Windows Mobile; doting parent of Symbian, Access Linux Platform, and S60; constant companion of Handango and Motricity. Scared the crap out of Microsoft in 2000. Passed away from strangulation at the hands of the mobile industry in 2008. Awaiting resurrection as a web service in 2009. In lieu of flowers, the family asks that you make a donation to the Yahoo takeover defense fund.

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Geotagging Integrated into N82 on Next Firmware Update

According to S60 Blogs, the next firmware update of the N82 should include Geotagging integrated into the camera settings. No firm date was offered, but the update is on course to be released during Q1.

The post also says:

Work on Location Tagging is progressing well, some other new features are also being added (that I can't talk about yet).

I wonder what those features will be?

I'm reading: Geotagging Integrated into N82 on Next Firmware Update

Get Together in London

WOMWorld is a website where you can find listed in one place chat about NSeries phones. They scour the internet and link to discussions on forums, posts on blogs and general news stories about specifically the Nokia NSeries range. I've found many an interesting post and blog via their site.

The guys from WOMWorld, friendly bunch that they are, have decided to get together in London one evening early next month, to share with like minded NSeries freaks (I mean that term in the nicest way, including myself under that description) to share a chat over a beer about the greatest mobile products in the industry.

Also, during that evening, Ryan Gallagher from Camera Toss is going to be passing through as part of his excursion on the Nokia NSeries Urbanista diaries, and he will give a demo of 'Camera Toss' (Something I could *never* see myself doing!). I hope everyone is keeping up to date with the excellent Urbanista Diaries project, you can find more detail here.

The WOMWorld event will take place on the 5th March, at the Crown Pub in London which is just a three minute walk from Holborn Tube station. A map is linked here.

The WOMworld crew will be there from 6.30ish onwards, so if you are up for a lively evening and will be in the area, pop in and meet the guys.

I'm reading: Get Together in London

N78 Advertising

From AAS, this ad for the N78. It has to be said when I first saw the N78 I was far from impressed. Now I'm starting to change my mind. It could actually be even a more popular handset than the N96.

I'm reading: N78 Advertising

What would you like to ask the mobile OS companies at CTIA?

I've been invited to moderate a panel on mobile operating systems at the CTIA conference this April. No doubt this will be the highlight of the entire conference ;-) , so make your travel reservations early.

Participants tentatively will include Symbian, Microsoft, Access, RIM, and several others.

Here's the session description:

Operating Systems, User Interfaces and Browsers: Where is the Technology Going?

Mobile phones are plagued with interoperability issues, making it difficult for applications to run properly on all handsets, hurting both consumers—who find their handset incapable of running the desired application—and applications developers—who have to develop multiple versions of the same application. What are the pros and cons of open versus closed handheld operating systems? This panel will address the likely outcome of the openness rage should it move to the handset, including the long-term effects of this possible technology shift.

Should be a fun conversation.

The panel will consist of brief presentations followed by Q&A, so I wanted to give you an opportunity to participate. If you'll be at CTIA, please come by the panel on April 2 at 2:30. If you won't be there, let me know what questions you'd like to see asked. Just post a comment below, and I'll see what I can do. I'll also post a report after the session.

(By the way, if you'll be at CTIA and want to chat, drop me a note at the address here.)

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Nokia N95 8GB - First Impressions

So, now the N82 has been returned, I've had to look across the market to see what phone I should get next. Normally, I go back to the N73, but I'm finding that is now becoming just that bit old now, despite being one of the best NSeries phones, ever.

So, not wanting the N73 again, I've looked to see what took my fancy. There's not a lot on the market right now, really. The new NSeries, N78 and N96 are still a while off, and really anything other than a smartphone just doesn't cut it. I considered the Sony Ericsson W960, and also the Nokia E51, but ultimately decided on the N95 8GB. I've owned the N95 a couple of times in the past, but this is the first time I've owned the 8GB version.

This phone just looks good. Huge screen, easy to use navigation keys, comfortable keypad, and nice black colour.

A few initial thoughts on the phone. It is sold as coming with the Spiderman 3 film, but if you want to keep it functioning don't upgrade your firmware. I backed up before upgrading last night but despite this, the film now no longer works. I can't understand why Nokia don't carry through this functionality on a firmware upgrade, is it really that difficult? A quick scan of the Nokia discussion boards shows a lot of dissatisfied users who've lost the film after upgrading their firmware, some backed up, some did not because, as a brand new handset they didn't think there was anything too back up. Surely it isn't hard to rectify this issue?

Another point, that mini USB cable is just too short. My phone barely reaches my desk from the PC, it is that short.

Minor points really, but annoying enough to mention them. Overall I'm very happy with the phone and I'm sure it will last until the Black N82 hits the market.

I'm reading: Nokia N95 8GB - First Impressions

Iconic Handsets

There have been some iconic mobile phones, over the years. Handsets that have really stood out, and stood the test of time. The reasons a handset becomes part of mobile folklore will usually be either because of a classic design, or outstanding features. Take the Motorola Star Tac, for example. Feature-wise nothing special but it is a real design classic of a mobile phone. Or who could forget what popularly became known as the Motorola Wings, the Motorola V3688. This handset was tiny, and just felt great to use, despite being absolutely useless for anything other than calls. The V3688 even sucked at SMS, with poor message input and early handsets had no link to the phonebook, so unless you knew the number you didn't know who messages were from. Great keypad for such a small phone though.

Moving on from the Motorola design classics, we come to another iconic handset, the Nokia 6310i. Certainly not a popular handset because of its looks, this is one of the most sold handsets Nokia have ever produced, it sold in its millions. It was such an easy phone to use, simple in layout, it had Bluetooth and GPRS back in the day when this was important and new. I know people now who still insist on their 6310i and won't swap. There is a roaring trade on 6310i refurbs on Ebay. This is one phone that will run for a few more years. A friend told me he is taken with the simplicity, whilst at the same time of course, there is the legendary 6310i battery. That thing just goes forever!

Personally, I just the iconic status of my handsets by the amount of time I buy one. It works something like this. I buy a phone, use it, like it, buy another, but the replacement doesn't cut it, either in usability, or design, or features, so I purchase another of the model I had previously. It's like my little vice, I don't drink, smoke or gamble, I do buy lots of phones! Over time phones like the V3688 and 6310i have been iconic handsets in my phone ownership history. Also the Nokia 7650, the first camera phone in the UK, the first Symbian phone, the handset that got me hooked on S60 in general, became an iconic handset. The 6600 after it, the N73, all iconic handsets.

A few months ago, I was invited to the launch of the Nokia N82, with a few other bloggers, and we were given a live handset to take away with us and put it through its every day paces. A fantastic opportunity to get real hands on with the latest S60 product, and really find out how it performs. I cannot recommend this handset enough. In the three months I've used this phone it hasn't failed me. Recently I purchased an 8GB memory card so storage was never an issue, the N82 has a great camera, WiFi, HSDPA, easy email to setup and use, an excellent web browser, the acceleromator, GPS, a handily placed 3.5mm audio jack on the top of the phone, a great bright clear screen, all in my favourite phone shape, the classic candybar.

The trial period with the N82 is now at an end, and the handset is going back. It is the only time I've ever trialed a handset that I really didn't want to give back, the N82 is that good.

I am going to by another N82. In my mind, the N82 has achieved the level of an iconic handset, to me personally. However, I am going to wait until I can get my hands on the black version, I've seen one in the flesh, so to speak, and it really is nice. In the meantime I will use an N95 8GB which I haven't owned since they came to market, but I've had the N95 previously and the N82 to me is a much better handset, even if just for the form factor.

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