Apps are all the rage in the mobile content space these days. Every device OS has an app storefront to go with it, and coalitions like the GSMA-endorsed Wholesale Application Community are aiming to extend the trend to feature phones. Cellcos such as Vodafone, Verizon, SingTel, Maxis and China Mobile have launched apps stores.
Even network vendors are getting into the act - Alcatel-Lucent has been developing an application ecosystem that positions the network as the apps platform, while Huawei Technologies has just launched its "Digital Shopping Mall, a white-label cross-platform store boasting 80,000 mobile apps, as well as music, videos and e-books, for Android, Symbian and Windows Mobile.
But what kinds of apps are driving the phenomenon? For the most part, according to Nielsen, games are by far the most popular category, followed by entertainment-related apps (like Pandora), navigation apps (such as GoogleMaps) and, of course, Facebook. Which is fine, but also a bit predictable.
However, as apps get smarter, devices get more powerful and wireless network connectivity gets faster - and as more people use wireless devices to get online - we'll be seeing new apps categories coming into the mainstream.
This month, Telecom Asia highlights five up-and-coming app trends worth tracking, from social media and automobiles to augmented reality and mobile video calls. Oh, and - yes - adult content.
Auto makers have already been exploring ways to leverage the Broadband Web 2.0 Age, from onboard GPS and telematics to interactive onboard entertainment systems. The rise of smartphones - and the operator pilgrimage to 4G - is set to take things even further.
Smartphones are already capable of interacting with the car beyond hands-free kits and iPod docks. SK Telecom's Mobile In Vehicle solution - unveiled earlier this year, with plans for commercialization in China before the end of next year - illustrates the possibilities of using widgets to transform the phone into a remote control for things like unlocking the car, popping open the trunk and starting the engine, as well as track fuel usage and even alert the owner when the car is being stolen (complete with a GoogleMaps tracker).
Meanwhile, auto makers are already designing their onboard entertainment systems with smartphones in mind. For example, Ford Motor's upcoming MyFord touch system is designed not to simply integrate smartphones into the onboard system, but to create a client/server environment where the car is the client and the device (smartphone, tablet, iPod, etc) is the server.
Meanwhile, the growing use of social networking apps while driving is spurring demand for voice-activated systems, says Anna Buettner, analyst and regional manager for EMEA automotive research at iSuppli.
"Automotive OEMs, suppliers and app developers are realizing that calling, texting and even social networking are part - or will be part - of everyday driving for an increasing number of motorists," Buettner said. "With the proliferation of smartphones, the trend seems irreversible."
Which is why General Motors-owned OnStar plans to introduce an upgraded system that links cars to Facebook and translates text messages to voice, and vice versa.
It's still early days, of course, but ABI Research expects the global number of automotive apps users will grow from just under 1.4 million this year to more than 28 million in 2015.
NEXT: Mobile VoIP + video
Mobile VoIP + video
Cellcos aren't crazy about VoIP, but that may have to change one way or the other. Skype is the biggest brand name leading the charge, determined to work with cellcos, not against them, and touting the numbers from its first cellco partnership (with Hutchison-owned 3 UK) to prove that they have more to gain than to fear from allowing VoIP calls over their networks.
So far, Verizon Wireless and KDDI have announced deals with Skype, while cellcos like SK Telecom are now building mobile data plans around VoIP usage.
They might as well - there are already close to a dozen VoIP apps besides Skype for the iPhone alone, including goober VoIP, Vonage and iCall. Some - such as fring, Nimbuzz and Vopium - leverage popular IM services for added value, connecting users of MSN Messenger, GoogleTalk, Twitter, Yahoo, AIM and ICQ.
One way or another, mobile VoIP will generate an estimated 15 billion minutes on cellular networks this year, and that will grow to 470 billion by 2015, according to Juniper Research.
How well mobile VoIP does will depend on a number of issues, from regulator polices to operator sentiment, but most industry analysts agree that cellcos have more to gain than to lose by embracing it.
Anthony Cox, senior analyst at Juniper Research, adds that foisting mobile VoIP traffic to Wi-Fi is not an advisable option (unless perhaps you own the Wi-Fi hotspots).
"Wi-Fi mobile VoIP is potentially the most damaging of all VoIP traffic as it bypasses the mobile networks altogether," he says. "We forecast that mobile VoIP over Wi-Fi will cost operators $5 billion globally by 2015."
The next stage for mobile VoIP - and one that's already taking root - is video calls. Skype has a video feature for its mobile client, which is only available on the Nokia N900, but the company intends to extend the video feature not only to other mobile devices, but also PCs and TV sets.
Skype isn't the only one chasing that dollar. Apple is keen to drive mobile video calls with its FaceTime app feature for the iPhone 4 (although only iPhone 4 owners can use it, and only over Wi-Fi). But Fring and Tango also offer iPhone apps for video calls. Meanwhile, Yahoo is reportedly preparing a new, free Messenger app for iPhone that will support video calls from mobile to mobile or mobile to PC, and work over Wi-Fi and 3G networks.
NEXT: Social media
BACK: Automotive apps
This may seem like a no-brainer, but to really get the idea of just how big mobile social networking is already note that we've already mentioned that people are checking Facebook as they drive. More to the point, mobile social networking is now more popular than email, according to TNS, which says that on average, mobile users spend 3.1 hours per week on social networks, versus 2.2 hours on email.
Social networking is particularly big in developing markets, says TNS chief development officer Matthew Froggatt.
"We've seen that in mature markets where people have been online for years and where access is ubiquitous, the internet has already become a commoditized item that consumers take for granted," he said. "However, in growth markets that have seen recent, sustained investment in infrastructure, users are embracing these new channels in much more active ways. The digital world is transforming how they live and interact. And online consumers in these markets are leaving those in the developed world behind in terms of being active online and engaging in new forms of communications."
(For the record, the heaviest users of social media live in Malaysia, who use it an average of nine hours a week, TNS says. Russia is second at 8.1 hours.)
Another factor driving mobile social networking growth in developing markets is the dropping costs of smartphones coupled with 3G rollouts, says Analysys Mason, which points to India as a prime example. Driven by 3G, lower handset prices and creative pricing plans, mobile social network users in India should hit 72 million by 2014.
It's worth remembering that there's more to "social media" than Facebook, particularly in Asian markets. According to Gartner, for instance, India's social networking market has been spurred by the popularity of online dating and matchmaking sites. China, Japan and South Korea, meanwhile, have been driven by strong consumer interest in online games.
In fact, social gaming is tipped to be a hot market in itself. A key indicator: last month's news that DeNA - the largest social gaming company in Japan - bought Ngmoco (Next Generation Mobile Company) for over $400 million. The deal makes DeNA the world's largest mobile social gaming company, ahead of competitors such as Zynga.
Ovum analyst Neha Dharia said in a research note that the battle for social gaming is "indicative of the strong growth trajectory expected of this market, but to stand out players will need to cater to regional differences in user behavior and preferences. For instance, the emphasis on virtual personas (avatars) is far greater in the east than it is in the west. This makes it even more important to have local acquisitions with indigenous knowledge of the gaming market."
NEXT: Augmented reality
BACK: Mobile VoIP + video
Augmented reality (AR) apps - which leverage the camera and accelerometer sensor technology in smartphones (as well as the growing processor speed) to overlay computer graphics on live camera images - are already here in various forms, from mobile games to museum guides.
According to social networking blog ReadWriteWeb, there are well over 200 stand-alone mobile AR apps in the iTunes App Store, and over 50 in Android Market. Research firm ARCchart said in a recent report that AR "will impact almost every industry, particularly retail, entertainment, travel and advertising," and forecasts that revenues generated from mobile AR apps will top $2.2 billion by 2015.
The biggest buzz looks to be in games and advertising. Qualcomm is extremely interested in the former - at its inaugural Uplinq mobile developer's conference in San Diego in July, Qualcomm and toymaker Mattel demoed a mobile AR version of the classic Mattel toy Rock'em Sock'em Robots developed using Qualcomm's AR SDK and SnapDragon processor. Qualcomm has also launched an AR gaming R&D center at the Georgia Institute of Technology to develop new application concepts and prototypes using Qualcomm's AR tech.
Meanwhile, AR will start playing a larger role in location-based advertising, according to the Mobile Marketing Association. AR has already been making waves in point-of-sale promotion campaigns, such as the "virtual changing room" campaign for Adidas stores in several Southeast Asian markets earlier this year. Using logo recognition technology from mobile marketing specialists i-POP, shoppers could wave a card with an Adidas logo in front of a "digital mirror" (i.e. a wall-mounted screen with a webcam) and have virtual t-shirts imposed on their image.
The next step is to take the app to mobile devices. Aim your cameraphone at a logo, and the app calls up text info and even a video mapped over the image of the real logo.
More recently, convenience store chain 7-Eleven released an iPhone AR app in Hong Kong to complement its ongoing Paddington Bear Art Jam World Tour Series redemption program. Customers can use the app to find and collect virtual Paddington Bears, which can also be swapped or gifted to friends and family. Collect all nine bears and get a tenth "special virtual edition" of Paddington Bear.
Not surprisingly, there are already concerns over how AR is implemented in regards to privacy. Last year, Swedish company TAT caused a stir with an AR app called Recognizr, which proposed to use facial recognition and tracking to pick out a face in public, match it to images on Facebook or other social networks, and generate an AR profile of that person. TAT said the app would be opt-in only, but critics dithered over the potential privacy implications of such technology, especially when combined with geotagging technology.
NEXT: Adult entertainment
BACK: Social media
Sure, you've heard this one before - adult content drives tech adoption, adult content is premium content, adult content is perfect for personal devices, etc. But while mobile adult content has always been a potentially large market, it has been held back - at least in terms of monetization by cellcos - in part by the success of web-friendly smartphones that make it easier for adult consumers to get their content directly from the web, much of it free (if not mobile-optimized). And despite the traffic surge, leading adult websites are only now beginning to monetize this traffic by offering mobile-optimized content and billing mechanisms, according to new data from Juniper Research.
It arguably hasn't helped that Apple has imposed restrictive content policies banning even bikini models from its App Store - ostensibly in the interest of making iPhones and iPads "family-friendly", particularly for Apple's home market in the US. Apple is just one company in an increasingly competitive apps ecosystem, but it's an influential one. Google and Microsoft have also banned adult content from their respective storefronts - all of which illustrates how gun-shy many industry players still are when it comes to sexy content.
But things are starting to kick in, thanks to the industry's transition from pay-per-download to D2C (direct to consumer) subscription models (following the lead of early mobile adult content pioneers like Cherry Media), which means adult sites can gain traction and traffic by offering a wide range of specialized niche content, Juniper says.
Interestingly, the other big driver for mobile adult content is video chat, says Juniper.
"Video chat service providers have reported a combination of high retention rates and - with services often billed at several dollars per minutes - very high ARPU," said Juniper analyst Windsor Holden in a research note. "Thus, even with a comparatively low user base, service providers can generate extremely strong revenues."
Consequently, despite the apps storefront restrictions and easier access to free web content, adult-related revenues are expected to actually increase from $1.7 billion in 2009 to $2.8 billion by 2015, thanks to video chat and subscription-based services, says Holden.
BACK: Augmented reality
Side bar: It pays to mobile-advertise
One of the big questions for the mobile apps space is whether non-premium mobile content can be subsidized by advertising.
Certainly Google's business model depends on advertising, and its $750 million acquisition of AdMob earlier this year underscores Google's desire to apply the ad model to mobile.
And it appears to be working, if Google's Q3 2010 figures released last month are any indication. Google claims its mobile ad sales were now at a $1 billion "annualized run rate."
What that means in terms of growth rates - in Asia or elsewhere - remains to be seen, but mobile ad network InMobi recently released a survey conducted with ComScore showing mobile advertising has a bigger audience in APAC than advertisers might think.
Among other things, the survey found that over two-thirds of Asians were "comfortable with mobile advertising", and 54% were "ready for customised/personalised advertising". Close to 50% of respondents said they'd benefited from being introduced to new product via a mobile ad while 50% were willing to receive advertising in return for free apps, and 53% in return for a lower phone bill.
There's even more potential good news from mobile analytics firm Flurry: the sale of virtual goods within mobile apps is already worth four times as much as mobile ad revenue É at least for the iPhone.
Whereas a year ago, virtually all revenue via the iPhone iOS platform came from advertising, now the sale of goods from within apps is the dominant source, Flurry says.
Flurry admits the idea that sales of "virtual swords, gold coins and respect points can outperform advertising seems counter-intuitive; however, this phenomenon is neither new nor unique to the iOS platform."
Virtual goods sales already represent the primary source of revenue for social gaming on Facebook, it says.
Flurry's analysis was based on data collected from a sample iOS social networking and social gaming applications, with a combined reach of 2.2 million daily active users.
It quotes figures from Wedbush Morgan Securities that show social gaming has grown from approximately $600 million in 2008 to $1 billion in 2009 and is forecast to grow to more than $4 billion by 2013.
Mobile in-app sales are currently unique to the iOS. Android doesn't support in-game purchases, Flurry notes.
With mobile social game critical mass "now rivaling TV prime time viewership," it predicts strong revenue growth from both virtual goods and advertising revenue from social gaming over the next 18 to 24 months.
- John C Tanner and Robert Clark
Side bar: App-cessorizing your iPhone
Just as Apple essentially created iTunes and the App Store as vehicles to sell hardware, a company called New Potato Technologies is talking a similar approach, offering apps that are free of charge and come with optional hardware add-ons – which New Potato dubs “app cessories” designed to enhance the app experience.
Take, for example, Jackpot Slots, an iPhone dock that looks and works like a slot machine. The app lets you play online, compete in tournaments and – after you win 50,000 credits – earn a chance to win a trip to Las Vegas.
Then there is Pinball Magic, a dock that turns an iPhone into the table component of a pinball machine. Use the plunger to launch the ball and side buttons to control the flippers as you would a normal pinball machine. On the downside, it only works with New Potato’s pinball game app.
Less flashy but no less useful is FLPR, a dongle accessory that, combined with the software, turns an iPhone into a universal remote control for you TV, set-up box, home stereo, lights, drapes or most anything else that uses an IR remote control.
In all three cases, the actual app is free on the App Store. The docks retail at around $40. The IR dongle goes for around $80.
- John C. Tanner