Dinner was interesting last night as a microcosm of life in a connected economy. My son (12 years old) happily informed me that since he had forgotten his homework he had usefully employed the time checking out the top iPad apps. By the way, I bought the iPad to experiment with it as a business device and have now concluded it is an entertainment device… with his help obviously. In rank order the top 3 iPad apps last week were: Angry Birds Hallowe’en (the developers have sold out for a lot of money), the McDonalds finder, and the wonder of the last 2 weeks, the app to find a French petrol station with fuel (their sales must have gone up at least 100,000% in the last 2 weeks – see my post on the Camargue.
All of which poses an interesting question… which do you download first, assuming you are somewhere in France amid the denial of demographic reality? If you are in need of food, it’s clearly McDonalds first (depending on how you view fast food). Or do you need the fuel-finder first (to get to McDonalds)? And what happens if you can’t find fuel or McDonalds? That’s why Angry Birds is No.1…
The growth of apps is an interesting – and very recent – phenomenon for business. As a recent perspective from Booz & Co. suggests:
Three years ago, the word “app” was rarely uttered outside of technical circles. But all that changed in June 2007, when Apple CEO Steve Jobs unveiled the long-anticipated iPhone, a device that has sold more than 50 million units and kick-started the global smartphone market as well as an entire ecosystem of associated services and applications that have come to be known simply as “apps.”
Their analysis suggests that by 2014, more than 30 billion apps will be downloaded a year, driving annual revenues of some US$ 40 billion (including downloads, value-added services, and advertising) versus estimated revenues of US$ 5 billion in 2009. As the eclectic mix of top apps my son discovered demonstrates, many businesses are already experimenting with mobile apps across multiple platforms (smartphones, netbooks and more) to build stronger and deeper relationships with their customers, to help customers find and understand their products and services, and to differentiate themselves. As the growth of smartphones and related devices such as netbooks increases, the opportunities to drive such engagement will only increase. Despite the recession, Booz notes that in 2009, global sales of smartphones grew 24%, from 139 million units to 172 million units, and sales are expected to continue to grow by 50% over the next two years, reaching almost 400 million units in 2011. By 2011, this means that smartphones will account for 30% of global mobile phone sales versus 14% in 2009, with the penetration much higher in the developed economies.
The gateways to the apps and related revenues are app stores, of which Apple’s iTunes and Google’s Android Marketplace are probably the best known, but there are many more springing up, and Booz suggests the market will only get more crowded. While OEMs and mobile phone operators are all expected to get involved in developing their own app stores (and some such as Verizon and Vodafone are already doing so), Booz suggests that over the next two to three years it will actually be the retailers and e-tailers such as Amazon that will become customers’ trusted advisors and the key gateways for apps.
So what are the implications for businesses who want to connect with and engage their customers via apps? First, you will need to build deep insights into why and how customers/consumers are using apps, then to translate this into app opportunities which can deliver real value both to the customer and the business. As with many social media efforts, apps are a new way to engage and it is important to understand the “rules of the game,” bearing in mind that apps are the topic of many social media conversations. Your efforts will be scrutinized by these key shapers and influencers – just type “apps” into YouTube and you will find around 187,000 results. Second, you need to understand how the app store landscape is shifting because ultimately these gatekeepers will have significant influence on your route to your customers, so building strong relationships with key players is critical. Finally, bring in the voice of the users – your younger staff members (as well as your children) – to help innovate and create, and do it fast. The world of apps has exploded from nothing in just three years and will continue to morph and grow – how can you create real value through this channel?