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Dana Gardner: Hi, this is Dana Gardner, Principal Analyst at Interarbor Solutions, and you're listening to BriefingsDirect.
Today, we present a sponsored podcast discussion on the rapidly changing and fast-growing
opportunity for more businesses to reach their customers and deliver their services via mobile applications.Over just the past two years, the demand for mobile applications on more capable classes of devices, such as smartphones and tablets, has skyrocketed. Now businesses of all sizes are seeing a step change in how they can get into the action.
The means to deliver low-cost applications to these newer devices via app stores and communities also makes the case for small and medium-size businesses (SMBs) to reevaluate their application development and end-user access strategies. This goes for reaching employees, as well as partners, users, and customers.
Perhaps the most impactful element of this shift is that the skills required to put these applications on these devices and distribute them widely is moving from hardcore coders with mastery of embedded platforms and tools to more mainstream graphical and scripting-skilled workers, more power-users than developers.
We're here to discuss how mobile application development and the market opportunity are shifting, and how more businesses can quickly get into the mobile applications game and build out new revenue, share more data, and provide better direct customer access in the process.
Please join me in welcoming our panel on discovering some new opportunities for mobile computing. We're here with Roger Entner, Senior Vice President and Head of Research and Insights in the Telecom Practice at the Nielsen Co. Welcome, Roger.
Roger Entner: Thank you, Dana.
Gardner: We are also here with Wayne Parrott, Vice President for Product Development at Genuitec. Welcome back to BriefingsDirect, Wayne.
Wayne Parrott: Great to be back.
Gardner: Roger, let's go to you first. What is a salient difference now with mobile applications than just a couple years ago? How has this really changed in your eyes, and in your practice?
More computing power
Entner: Well, the devices that we call now smartphones are little computers that today are as
powerful as laptops a few years ago. I always say that this little thing you have in your hands, a smartphone, has far more computing power than was used by NASA to put men safely on the moon and bring them back alive.So, it is the Internet and a computer in the palm of your hand. This really has opened up the whole universe for app development, because you have now all three components. You have the right devices with the ability to provide the right services on the right networks. You have lot of power on the device, a large screen, a good way to input it, and the programming capabilities to do something really neat with the networks to provide a really fast connection.
This is a very nice confluence of factors that have led to this explosion in the palm of your hand called the smartphone.
Gardner: I suppose the form factor here is also changing the very nature of the applications. We're not simply re-purposing desktop applications for these devices. We're actually creating new ways that people can relate to business processes, discovery of data and information, and then join that with such aspects as location services.
Entner: Absolutely. A few years ago, it was a stamp-size screen, and people were trying to pack a 16, 18-inch experience from the laptop or from the computer onto that. It just fell short. It was a recipe for disaster, and people were simply not using it, and you can't blame them for it.
One of the biggest innovations Apple brought was addressing the elasticity of demand.
Now, we have 3- and 4-inch screens that are actually readable. We're not just merely replicating a desktop experience, but actually tailoring it to the device and working with the strengths of the device rather than with the weaknesses.
Gardner: I'm also impressed too with how the business model has shifted so rapidly. People used to want to make money off the application. Now, we're seeing through app stores with Apple devices and Android devices, as well as Microsoft upgrades to their new operating system on the mobile device, a premium model, where [enterprises and smaller businesses] either give-away the app or charge quite a low amount. So, that’s sort of increased this viral uptake of these apps.
Entner: One of the biggest innovations Apple brought was addressing the elasticity of demand. On feature phones today you're still paying $3, $4, $5, $6, $7 for an application, and it has an inferior experience than the one that companies are selling on the iPhone. To no surprise, they actually make a lot more money through the iPhone, because of a lower price point and better experience. A lot more people are buying it than those with an inferior experience.
Gardner: Do you have any studies at your fingertips? We've seen a lot going around recently around these projections of growth for mobile. In many cases, it's really a shift away from PC. A lot of developers are saying, "Wow, I can make a better living making these mobile devices and having that high volume opportunities." Are there any numbers, any projections?
Entner: We're quite active in the mobile applications arena. We just launched our second edition of our Mobile Apps Playbook. But to quote numbers from there, year-over-year second quarter '09 to second quarter '10, smartphone penetration in the US went from 16 percent to 25 percent.
About 50 percent of all devices being sold in the US right now are smartphones. We expect smartphone penetration to be at about 50 percent by the end of next year. Almost 60 percent of smartphone owners are actually using applications. That’s a huge percentage.
At the sweet spot
We're now at that sweet spot, where it makes a lot of sense for businesses to have applications
both for their consumers and their employees alike, because there is enough of an addressable base there.Gardner: The interesting part too for me is that this can scale down as well as up. That is to say, individuals, small businesses, maybe even departments within large companies can start thinking about making their own apps for their own services, because the economics have shifted so dramatically.
Entner: Absolutely. Apple, Google, Microsoft, and the others, have software development kits (SDKs) out there that make app development a lot easier than it has ever been.
If you have a talented developer or a talented person in your department, he might be able to build that internally. Or, there are now myriad development shops out there that have the capabilities to build applications and charge only a few thousand dollars -- and that's single digit thousand dollars -- to have a capable usable application.
There are a lot more people who know how to program these things, and have good ideas of applications. There is a really good market out there to put the two together.
Gardner: Wayne, Genuitec has been focused on development and the developer community for a number of years. Is there anything from what Roger has been telling us that you don’t see? How are you at Genuitec seeing this shift in developer community and interest around mobile apps?
Parrott: We’re seeing a big move toward interest in mobile at the development side. Back to
your original question of what are the factors that’s really led to the explosion of mobile apps, is not only the smartphones and their capabilities, but we also look at the social changes in terms of behavior.People more and more have a higher reliance on their smartphone and how they run their lives, whether they are at work or on the move. The idea is that they are always connected. They can always get to the data that they need.
Basically, we're taking their lifestyle away from their desktop and putting it in their pocket as they move around. More and more, we see companies wanting to reach out and provide a mobile presence for their own workforce and for their customers.
The question they ask is, "How do we do that? We already have a web presence. People have learned about our brand, but they can't access this through their smartphones, or the experience is inferior to what they’ve come to expect on the smartphone."
We're seeing a big growth of interest in terms of just getting on to the mobile -- having a mobile presence for the SMBs.
Gardner: I forgot to consider that if you could become adept with consumer and entertainment applications, they'd want to start seeing that same opportunity for mobility in their business applications. It's almost as if business needs to rapidly catch up to where the entertainment side or even gaming side is. Let's talk a little bit about some of the technologies that support these user interfaces (UIs).
Roger, any sense of any game changing technology shifts? We're certainly talking about the skills moving. I am aware of HTML5 and some other SDK activities. What strikes you as sort of in an important technology shift that is now going to help bring together these communities and this interest?
Trend on both sides
Entner: Well, you have a trend on both sides. One is HTML5, which is slowly but surely approaching. There has been no finalized HTML5 standard [from the W3C], but a lot of web browsers, and even mobile web browsers, have now some HTML5 capabilities. And, it will really help in the development cycle for basic applications.
If we take one little step back, one of the genius things that Apple has done is turn the bookmarks into an application. About 60-70 percent of all applications on the iPhone or an Android are actually glorified HTML ports. So, it's not that difficult or that demanding on the application side.
Where HTML5 will not to be able to help us, at least right now, is when we try to take advantage of location-based services because there is no standard yet. They're still arguing about this one, and especially high performance graphics. But, on the standard application, HTML5 will take us miles forward and diminish the difference between the desktop and the mobile environment.
Then, we have a multi-platform development environments. Adobe Flash is probably the most well-known, and that helps to reduce development time as well. At the same time, all of the SDKs are getting more powerful and more user-friendly. So, it's moving toward a more harmonized and more rapid development environment.
Gardner: Wayne, how about that harmonization process? It doesn’t seem that long ago that mobile development was really hard. It was highly fractured, with many different platforms, many different toolsets, and concerns about network compatibility. The problem was that you had to target specific OSes, and therefore one app wouldn't run somewhere else, or the graphics wouldn't quite fit. So this harmonization and standardization seems to me a fairly big deal?
You still see a strong fragmented programming model base, different operating systems, and different hardware capability. It's still a mess.
Parrott: Absolutely. If you take a look at the current state of native mobile app development, it's really not much better than it was five years ago. You still see a strong fragmented programming model base, different operating systems, and different hardware capability. It's still a mess. You pretty much have to pick a subset of devices that you want to focus on.
What's much more viable now, as Roger was talking about, is the HTML5 standard, which is still in development and emerging. There is enough core already emerging that we could start to program to a subset of that spec and treat it as kind of a common run-time that you would program across pretty much all of the new emerging smartphones as we look forward.
Gardner: Maybe we should back up a sec for our listeners who are in SMBs and who aren't coders or developers. HTML5 is a web-type mark-up language, something that they would be familiar with looking at through their browser. What's changed? What does this mean now for going to a hand-held tablet mobile device of some sort? Wayne, maybe you could take a first stab at that.
Parrott: Prior to HTML5 talking about mobile web was pretty much a joke. Mobile web was an afterthought in the phone market. You had these small, dinky displays. Most of them couldn't even render most standard HTML.
With the advent of the smartphone what you really saw was pretty much the Internet, as you experience it on your desktop, now on to your smartphone, but with even more capability.
Part of it is because HTML5 has stepped back and looked at what the future needed to be for a web programming model. To become more of a common run-time, they had to address some of the key gaps between native hardware, APIs, and web. Much of those have really centered on one of the biggest digs that mobile web had in the old days, when you were doing something, were connected, and then you lost your connectivity.
Out of the box
HTML5, right out of the box, has a specification for how to operate in an online, offline, or disconnected type mode. Another thing was a rendering model, beyond just what you see on your desktop, that actually provides a high-end graphics type capability -- 2D, 3D types of programming. These are things that more advanced programs can take advantage of, but you can build very rich desktop type of experiences on the laptop.
Then, they went beyond what you're used to seeing on your desktop and took advantage of some of the sensors that these phones have now -- accelerometers, location capability, or geolocation. APIs are now emerging as a companion to HTML5, which is a spec that will span across your desktop to the mobile phone. It's a very capable specification.
In addition, there is the movement in terms of the standards body, especially the W3C, to address mobile device API. You will eventually program in a standard way and talk to your contacts list, your cameras, video, recording devices, and things like that. That will soon be available to us in a web programming model.
What used to be exclusively the demand of the hardware API guys to do really low level, high performance bit twiddling is now going to be available to the general web programming masses. That opens up the future for a lot more innovation than what we’ve seen in past.
Gardner: Roger, you pointed out that this HTML5 is not fully baked, but there are some very powerful big players involved who are supporting it. That would include Apple and Google. Is this a question of if HTML5 becomes dominant or pervasive, or is it a matter of when?
HTML5 will come, and the excitement that you see is expressed by so many companies.
Entner: It's only a matter of when and a little bit around the edges of how. HTML5 will come, and the excitement that you see is expressed by so many companies. Apple and Google are at the forefront and are already launching websites and services in it. You can get HTML5 YouTube, HTML5 Google, and even Yahoo mail access. You can have the Apple website in HTML5. It just depends on what is fully supported right now.
Some browsers support it, and some don't yet. On the mobile side, it also fully depends on what is supported. If you have the WebKit engine at the core of the browser that your device is using, HTML5 is pretty widely supported. If your browser uses another engine, it's a little bit more difficult.
We're at the moment of emergence of this, and so the implementation is not fully baked, but there is so much excitement that people want to get going rather than wait for the standards to be finalized.
Gardner: I think it's important with these devices and their interfaces, especially the tablet. People are looking to video and full media as a way of doing more than simply watching the news. This is really becoming part of our culture, the way people relate, taking steps from social media. The thing with HTML5 is that it supports that video without the plug-ins, without worrying about compatibility. This kind of levels the playing field on the full media. Is that your take as well, Wayne?
Parrott: Absolutely. Definitely.
Innovative model
Gardner: So, the goal here is to make this available to more people and more companies. There is a very interesting, innovative model potential here for small companies or, as I said, divisions within companies, branch offices, perhaps by geography. You don't have to go through IT and get into a long line waiting for development of an application. The office, perhaps in another geography or language environment could go out, create their own mobile app, and reach their customers very quickly that way.
Let's get back to this notion of simplified creation, design, and deployment. Wayne, what have you been doing with MobiOne in Genuitec, in particular, to try to hasten this to take advantage of this need in the market?
Parrott: We've been watching HTML5 and the whole movement -- the social desire across a number of small businesses to be on the mobile web, to have a web presence out there. As we've talked to more-and-more of our SMBs, one thing that stands out is that they don't have a lot of resources. They don't have a huge web department. Their personnel wear a number of hats. Web development is just one of n things that one of the individuals may do in one of these organizations.
At Genuitec, we developed a product called MobiOne Studio. The target user is anyone who has an idea or an vision for a mobile web application or website. MobiOne is geared to provide a whole new intuitive type of experience, in which you just draw what you want. If you can develop PowerPoint presentations, you can create a mobile web application using MobiOne.
You lay out your screens, you pane them all up, and then you wire them together with different types of transitions. From there, you can then immediately generate mobile web code and begin to test it either in the MobiOne test environment, that's an emulated type of HTML5 environment, or you can immediately deploy it through MobiOne to your phone and test it directly on a real device.
One of the challenges you have right now with HTML5 and the mobile web programming model is that it is typically not accepted in most of the app stores.
Gardner: And, Wayne, how would that then work toward some of these app stores and particular devices? How do you take that added step particularly, as you point out, these organizations are without a lot of resources? How would they get this out into the mainstream? What's the distribution and deployment next step?
Parrott: Well one of the challenges you have right now with HTML5 and the mobile web programming model is that it is typically not accepted in most of the app stores. Let's just talk about the Apple's App Store as an example. Mobile web applications in their straight HTML5 form are not accepted yet in the app store.
We expect to see that relaxed in the future, but at this point in time, you really are restricted. So, the iPhone App Store is not available to you. It's really restricted, so that you have to jump through some hoops that Apple has set up in the past.
With HTML5, you can go directly to your customers. You can market to them directly. It depends on your way of interacting with your customers, but we have seen a number of novel approaches already from some of our customers. When any customer is in your store, you make it very easy for them to access your site, to make them aware of your mobile capabilities, lure them in, and get them connected that way.
But looking beyond the restrictions you have right now, with MobiOne Studio we recognized that the first thing that most companies want to do is just mobilize, just get a mobile presence, mobilize their websites, and have that capability. As Roger said a while ago, a lot of the apps you see out there are really glorified mobile websites and are packaged up in a binary format.
Second phase
In MobiOne Studio's second phase, once you design and you like what you have, you have a progressive step that you can go from a very portable form to compile it down -- or cross-compile -- from HTML5 to whatever the native requirements are of that particular target app store. So, Google will have their app store, and Apple and RIM each has their own model. They are all fairly different models.
One last thing that we are keeping a really close eye on is the mobile widget standard. It basically specifies what a mobile web app looks like and what the packaging model is. That's already respected by RIM and some of the other smartphones out there. Apple doesn't support it yet, but, fingers-crossed, they'll join the masses at some point, and we'll have a standard packaging deployment model in the future for the iPhones as well.
We're keeping an eye on it and we're filling those gaps based on what your target app store is.
Gardner: We’ve already discussed how we've come a long way in reducing the fractionalization within the mobile side, but it sounds as if we're looking to join a bit more of what happens in the web experience on a full-fledged PC with what happens in the web experience on a mobile device.
Back to you, Roger. Do you see this actually merging in some way? One of the guesses out there at this point is that iOS is going to be a bit more compatible, that is to say, your experience on the desktop and the mobile device become more common. Is it your future outlook that these things are going to start not only to consolidate in the mobile space, but consolidate across all types of devices connected to the web?
Entner: Yes, because when we look at fourth generation networks, LTE or WiMAX, they are flat IP networks. When you look at that, it basically allows you to have the same service. Your user experience only changes with the terminal you added at the end and the speed of the connection.
With mobile it's mobility and location awareness, whereas with the PC, it will always be raw speed through fiber and storage capability and screen size.
What we're seeing now is this increasing trend of a harmonization or at least integration capability of different OSes with their mobile counterparts. Then you can have everything from the Internet -- and we've seen it already today -- to applications, even like IPTV, streamed to your device. Only the speed changes or impacts how quickly you get it and what kind of resolution there is. If you look at Uber’s mobile from AT&T, it is already providing that.
We're seeing this congruence that’s happening. You try to play to the strength of the device that you have. With mobile it's mobility and location awareness, whereas with the PC, it will always be raw speed through fiber and storage capability and screen size. You're going to increasingly tailor to the strengths of the devices, rather than do one size fits all.
Gardner: Back to you Wayne. This is an interesting outlook for the future, because as we have that congruence and harmonization between web experience across multiple devices, this really also simplifies what can be done by developers and designers in terms of exploring new innovative business models, intercepting business processes and data based on that, the optimum part of a process timeline or more milestones, rather than where you happen to be, where you have to be at certain device or to intercept.
That’s a long-winded way of saying, can we start to see designers and UI-focused developers or scripters now having much more of a role in how business applications and processes can be designed and even improve iteratively over time?
Back to the desktop
Parrott: Yes. The influence that we are seeing already from the smartphones back to the desktop. The expectation, the experience, in the past has been a desire to have kind of that rich feel user type of experience moved back over to the desktop. So, we're seeing some influence there already.
Also, if you look at what HTML5 presents, not only is it becoming a common runtime on the smartphones, but it also represents a very viable development model on the desktop as well.
It's a portable standard. It wasn't originally designed for smartphones -- smartphones just embraced it first. We're definitely expecting to see a lot more influence by parties in the past that were really more kind of downstream, when they were being brought in upfront to talk about what's possible, when you start looking at the flow and the interaction with users, because things are becoming much more about the user experience.
To keep users engaged on the desktop in the past, you could take your workforce, lock them down, and give them some kind of boring app. But, we're seeing the temperament change now, as people have learned what’s possible. We’re asking what’s possible on the business side as well.
Gardner: I can see where this could really flip the development market altogether, because I might want to primarily design and develop and target mobile classes of devices, and then make it easier for me to then support the full-fledged PC through an HTML5 browser.
We think HTML5 is really the entry point to changing and moving everybody over to pretty much a web ubiquity.
I also might start developing on the server as a more sophisticated, say Eclipse-level Java developer, and start making sure that I output in HTML5, almost primarily. Then, I can cut across these different environments, reduce complexity significantly, and start to maybe get more agile, more swift, in how I do my server-side development as well. Any thoughts on that, Wayne?
Parrott: Definitely. That’s one thing we expect to see down the road. Again, it’s going to take a while for it to run it's course, because there are so many other competing technologies that have the incumbent technologies, Java or Microsoft’s desktop technologies, but companies for a long time have wanted to see a more capable portable web type model. It’s just got so many more benefits and we think HTML5 is really the entry point to changing and moving everybody over to pretty much a web ubiquity.
It’s going to be all by HTML5 in the future, at least when you talk about the client side, the UI that users are going to interact with as we move forward.
Gardner: I am afraid, we have to wrap it up. This brings this full circle back to how dynamic this marketplace is. Last word to you, Roger Entner. Thinking about the opportunity here, is now the time for these small businesses, almost any kind of business, to rethink how they relate to their environment, their end users, and perhaps get a bit more aggressive in thinking about mobile as a real important part of their business.
Entner: Yes. Now, 25 percent of wireless users have smartphones in their hand, and that’s basically increasing to 50 percent by the end of 2011. Now we have that critical mass that allows companies still to have an early move or advantage. If the companies wait another year or two, they will be laggards in the market and their competition will probably have put something out already and gained a valuable lead over that. So, it’s now where they still can show that they are leaders in their segment, if they haven’t done anything yet.
Gardner: Wayne, if folks were interested in trying to learn more about HTML5, the difference between different devices and web development to ameliorate the complexity, MobiOne Studio, and some other technologies Genuitec is working on, what would you suggest they’re doing to get started?
Parrott: Yeah, I would suggest, visit the Genuitec.com site, you can find all about MobiOne, download it, try it out, it’s very intuitive, you just install it to spin it up. You immediately are in the process of building HTML5 mobile app that you can then test and deploy, send it to your friends.
Gardner: What’s your pricing model, do you have a premium model on that? How does that work?
Parrott: Right now it’s priced right at $99 per user.
Gardner: Very good. Well, we’ve been talking about mobile application development and the market opportunity and how that’s all shifting, and how more businesses can quickly get into mobile applications and start building out new revenue, data sharing, and business process values to just about any user, just about any place nowadays.
I want to thank our guests. We’ve been here with Roger Entner, Senior Vice President and Head of Research and Insights in the Telecom Practice at the Nielsen Co. Thanks so much, Roger.
Entner: Thank you for having me.
Gardner: We’ve also been joined by Wayne Parrott, Vice President for Product Development at Genuitec. Thanks, Wayne.
Parrott: Great being here today. Thank you.
Gardner: This is Dana Gardner, Principal Analyst at Interarbor Solutions. You've been listening to a sponsored BriefingsDirect podcast. Thanks for listening, and come back next time.
Listen to the podcast. Find it on iTunes/iPod and Podcast.com. Download the transcript. Sponsor: Genuitec. Learn more.
Transcript of a BriefingsDirect podcast on using the latest HTML standard to provide a richer user experience on smartphones. Copyright Interarbor Solutions, LLC, 2005-2010. All rights reserved.
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