Mobile App Internet: Making Sense Of The 2011 Mobile Hysteria

Starting with CES in early January and through the Mobile World Congress last week in Barcelona, the mobile industry has been in a feeding frenzy of announcement activity. At CES, it was centered on Android-powered tablets. During the Mobile World Congress, it was about the big Microsoft/Nokia deal and vendors scrambling to differentiate their Android handsets.

But behind all these announcements, there is a broader shift going on to what Forrester calls the mobile app Internet and the accompanying broader wave of app development and management. We have just published a report that explores the different vectors of innovation and sizes the mobile app Internet from an app sales and services opportunity.

The report looks at the three factors beyond hardware that will drive the market:

  1. Even at $2.43/app, the app market will emerge as a $38B market by 2015 as more tablets and smart phones are sold and the number of paid for apps per device increases due to improvements in the app store experience.
  2. A perfect storm of innovation is unleashed by the merger of mobile, cloud, and smart computing. I see innovation coming from the combination of apps and smart devices like appliances and cars, improved user experience around the apps by better leveraging the context from the sensors in the devices, and enabling the apps to take advantage of new capabilities like near field communications (NFC) for things such as mobile payments.
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Looking At The Nokia Microsoft Deal From The Mobile Apps Perspective

Today’s deal between Microsoft and Nokia acts as a temporary lifeline for both companies. It gives Microsoft access to the largest handset provider, and it allows Nokia to defray some of its operating system development costs. I have just finished a report, “Mobile App Internet Recasts The Software And Services Landscape,” that will hit the Forrester site on Monday, February 28.

In the report, Forrester states, “The explosion of app innovation that started on the iPhone and then spread to Android devices and tablets will continue to drive tech industry innovation and have far-reaching pricing and go-to-market implications for the industry. Three different vectors of innovation that have been percolating under the surface will combine over the next 3-5 years. Mobile, cloud, and smart computing together will foster a new set of 'intelligence everywhere' apps.”

And based on that research, I believe that deal does not address the biggest issue for both companies – attracting apps and app developers. For Nokia, it now sends the message that Symbian and MeeGo platforms are no longer the long-term app focus. For Microsoft, it creates an eight-to-twelve month void/pause as developers wait to see what the new Nokia hardware looks like.

At the current rate that Apple and Android are recruiting third-party and enterprise app developers, this could mean a gap of 100,000-200,000 applications by the time the first Nokia Windows Phone device ships. This is likely a lead that even the combined resources of Microsoft and Nokia could not bridge.