The Future Of Application Stores

Thomas Husson

Apple reinvented the distribution of products and services on mobile phones, opening up direct-to-consumer opportunities for nontelecom companies. The numbers look impressive — more than 5 billion downloads and $1 billion paid to developers in the two years since the launch of the Apple App Store.

However, it also generated $429 million for Apple itself in two years. These revenues are not meaningful to Apple’s core revenues. Due to the limited number of paid apps and their significant concentration among games and navigation apps, it is likely that a significant number of independent developers have not recouped their investments via the current revenue-sharing model. The recent launch of iAd is a way for Apple to maintain the attractiveness of its platform, allowing third parties that provide free apps to develop sustainable business models.

But, despite all the hype around apps, only a minority of consumers download them monthly. A recent Forrester survey of more than 25,000 European adults shows that only 4% of all mobile users and 15% of smartphone users report downloading apps at least once per month. However, the fact that 21% of all European mobile users consider apps to be an important feature when choosing a new mobile handset highlights the large gap between today’s limited usage of apps and consumer awareness and interest.

The application store market is still nascent, but it is evolving quickly. However, in the longer run, few players will be able to address the key factors that will make them a success:

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The State Of Mobile Commerce In Europe

Thomas Husson

I booked my first hotel night via a mobile device a year ago.

I didn’t even think about the fact that it would be considered an “mCommerce” transaction, as I simply booked it directly on the hotel group’s Web site via the browser of my mobile phone. The site wasn’t actually optimized for mobile devices, but it was possible to enter my credit card details via a secure Web transaction. That’s not ideal, so I wonder how many mobile transactions that firm has missed simply because it doesn’t provide a compelling user experience.

 European mobile commerce is still at an early stage. Digital content is still the primary product purchased via mobile devices, but European consumers show growing interest in using their mobile phones for all sorts of shopping activities. I have recently contributed to a new report on the state of mobile commerce in Europe, written by my colleagues serving eBusiness Channel and Strategy Professionals. The report reveals that:

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How Mature Are Your Mobile Marketing Efforts?

Nate Elliott

We're gearing up to write a lot of research about mobile marketing (and mobile content and mobile commerce) in the next few months -- and we'd love your help in benchmarking the state of the industry. No matter how much or how little mobile your organization has used, we'd very much like you to spend a few minutes answering our mobile maturity survey. It'll only take you 10 or 15 minutes at the most, the results will be kept 100% anonymous, and in return for your time, we'll send you a free summary of the survey results. Please spend a few minutes helping us collect the best possible data on this topic!

UPDATE: My apologies, but since the survey doesn't seem to be working properly at the moment, I've taken down the link. Hopefully we'll get it back up and working again soon.

Profiling Your Best Mobile Customers

Thomas Husson

Nine months ago, I wondered if there was a life beyond the iPhone and beyond mobile applications. Recent data gathered by Forrester makes me think that such a life exists!

Bear with me one second. I am not denying the fact that iPhone owners are the heaviest users of mobile services. I am just saying that there are plenty of opportunities in the mobile space on other smartphone platforms and with selected audiences. Mobile is not just about applications or mobile Web sites. Even good old SMS can be powerful depending on the objectives you have set and the audiences you want to interact with.

What’s certain is that iPhone owners can only be a subset of your customer base. Only 2% of European mobile users report having an iPhone as their main mobile phone. Does that mean that there are no opportunities to target more mainstream audiences? Not at all.

A much larger near- and medium-term opportunity exists within other groups — particularly among young consumers, business users, and consumers with flat-rate data plans — as well as, increasingly, with new, competing smartphone platforms. In fact, if you’re not targeting them, you’re neglecting the majority of your customer base — including many consumers who are mobile-savvy but don’t have an iPhone.

Let’s make this even clearer. 96% of European 16- to 24-year-olds do not own an iPhone. Should you avoid engaging with youth via mobile because of that? I don’t think so.

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The New Frontier By Orange -- Conquests 2015

Thomas Husson

Orange announced today its new industrial project, "conquests 2015." After NExT from Didier Lombard, the recently appointed CEO is now communicating Orange's five-year action plan.

One of the main objectives of the plan is the "conquest of employee pride" and the recruitment of 10,000 additional employees (including the 3,500 already announced for 2010) between 2010 and 2012. Following the unprecedented social crisis that took place in France, the company had no other choice than to offer a new management vision and to make sure employees can participate in the future of the company, involving them in such a way that they feel part of a long-term project.

Beyond this initial objective, a couple of other interesting conquests have been announced:

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Help Us Benchmark "Mobile Maturity" — Take Part In Our Survey And Get A Free Executive Summary

Thomas Husson

Like my colleagues who serve Interactive Marketing professionals and are working on a study to benchmark social media maturity in organizations, we’re also conducting a new research project to benchmark how companies define and implement their mobile consumer approach.

Taking a step back, mobile phones have changed the way we live and communicate in the past 10 years. They’ve had a deep effect on society. At Forrester, we believe they’ll change the way companies do business in the next 10 years. Back in 2007, the iPhone created a market catalyst, not only in the way consumers use and perceive mobile phones but also in the way companies engage with their customers in the mobile environment. Since then, a growing number of companies have launched a mobile consumer presence and started to define a road map for their mobile products and services. Some of them are still testing and learning, while many companies are starting to integrate mobile in their corporate strategies, and others have already created dedicated mobile business units and plan to generate millions of €/$ per month in direct revenues. They follow different objectives — whether building brand loyalty, delivering added-value services in a multichannel experience, reducing costs, or acquiring new customers. 

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Back From Italy

Thomas Husson

I spent some time last week in Italy, where I regularly visit clients to discuss mobile opportunities.

I always try to spend a few hours visiting operators' shops and getting hold of some brochures. The ones below from Telecom Italia are very typical of a certain type of Italian ad...

Beyond this, however Italy is a very interesting market to study. It is wrongly perceived as leading in Europe because of its huge penetration rate — more than 140% — which doesn’t mean much, per se. Put simply, it links to the high ratio of prepay phones and to the multi-SIM phenomenon, in which Italian consumers take advantage of the most attractive tariffs. For example, handset subsidies are not common and were introduced by Tre (greenfield operator Hutchison Whampoa), the operator with the highest postpay market share.

However, Italian consumers are starting to demonstrate sophisticated mobile usage. An example: At the end of 2009, 15% of Italian online users accessed the mobile Internet on a weekly basis and more than 10% were interested in receiving contextualized mobile coupons. I see numerous examples of mobile innovation, and many companies (from media groups to banks) are starting to integrate mobile into their corporate strategies. I am, however, surprised by the lack of a cohesive and consistent approach. Few companies have a clear understanding of how their own customers use mobile services and what their attitudes toward mobile are. That's the first step in assessing mobile opportunities. For example, does it make sense to launch an Android application if you don't know how many of your customers own an Android device? Few companies have defined clear and measurable objectives or have a vision of how they want to integrate mobile as part of a multichannel and multimedia approach moving forward.

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The End Of "All-You-Can-Eat" Mobile Data Plans?

Thomas Husson

Following AT&T's decision in the US ten days ago (see my colleague Charles Golvin's take here), there's a hot debate as to whether European operators will follow suite and stop their unlimited mobile Internet pricing schemes.

O2 UK announced no later than last Friday that it will stop it and introduce various caps: from 500MB for the cheapest one (GBP25 with 100 minutes and unlimited texts) up to 1GB for the most expensive (GBP60 for unlimited voice/SMS and 1GB of mobile Internet).

According to the press release, 97% of O2 smartphone customers would not need to buy additional data allowances, as the lowest bundle (500MB) provides at least 2.5 times the average O2 customer’s current use. In short, just 3% of customers will have to pay extra.

Other UK operators as well as KPN in the Netherlands and Orange France have shared indications that they will follow suite and that this pricing scheme is outdated. Here are a couple of thoughts:

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Does Google's 'Sitelinks' Feature Improve Or Hurt Conversion Rates?

Nate Elliott

I don't know about you, but I like the 'extended' search results I sometimes see on Google. I mean the ones where Google, instead of just offering a single link for the top search result, provides you with several deep links into a site. It makes navigation faster, and that's a good thing.

Those extra links almost always show up in organic results, so you may not have known that marketers can actually buy this feature in their paid listings as well. Google calls them 'AdWords Ad Sitelinks.' But -- I'm starting to wonder how well these actually work for marketers. I noticed today that in Google's case study about how Nationwide Insurance used Sitelinks [pdf], Google says the clickthrough rate went up 73% but conversions only rose 60%. The case study isn't clear on whether that's conversions per click or overall conversions -- but it certainly sounds like overall conversions. In which case, the clicks Nationwide got from Sitelinks actually converted at a lower rate than the clicks they got from traditional paid listings.

Now, this is just one example -- and as I said, it's based on my reading of the case study. But if Sitelinks really did drive conversion rates down rather than up, surely that'd be a concern.

I'm curious -- have you used Sitelinks? If so, what did you think of the program's performance -- especially the conversion rates? Let us know in the comments below.

Now Accepting Entries For The 2010 Forrester Groundswell Awards

Christine Overby

[Originally published by Josh Bernoff on the Groundswell blog.]

We first started the Forrester Groundswell awards in 2007. What a great run! We've seen applications like the one that the amazing Pete Williams used to raise a million dollars for recovery from Australian brush fires and the one that remade the rules for NASCAR. And for the people who created these award-winning applications, the awards have given them the recognition that helps them justify the great work they do.

This year, we're expanding them to match up to the expanding role that social applications play in business. It also means you have more ways to win.

We've got:

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