The apps landscape itself is constantly shifting as devices get smarter and technologies advance to create new capabilities - and as old platforms give way to new ones. Telecom Asia looks at the biggest trends shaping the apps business
Mobile OS landscape
The goalposts keep changing for developers. Also, even Alibaba has one now
The fragmented mobile OS landscape that apps developers must navigate is in flux, as existing OS platforms are being combined and even abandoned and new ones keep popping up.
This year alone we've seen HP abandon its WebOS platform, while both Nokia and Intel have abandoned the MeeGo OS project. Intel is now backing Tizen, a new open-source OS from the Linux Foundation and the LiMo Foundation that recycles some components of MeeGo and is based on the Samsung Linux Platform that LiMo uses for its open-source mobile OS.
Meanwhile, speculation about the fate of WebOS - and the possibility of companies like Facebook and Amazon taking it over - highlights the desire by content-driven companies to gain more control of the mobile OS platform rather than ride on top of someone else's.
ABI senior analyst Aapo Markkanen says Facebook needs its own OS because of the growing ubiquity of mobile social networking. "A huge problem for Facebook is that while on the web it is a platform, on mobile it's just another application."
Other web players are already doing just that. In July China's Alibaba Cloud Computing unveiled its own cloud-based mobile OS - dubbed Aliyun OS - as well as the first device that will run on it, the K-Touch Cloud-Smart Phone W700. Aliyun supports Android apps, web apps and cloud services such as email, search, weather updates and mapping/navigation tools, though the ultimate goal for Alibaba is to develop a smartphone strategy for its e-commerce business.
Also in July, Mozilla revealed plans to develop an OS called Boot to Gecko, which will be based on the Gecko engine that drives its Firefox browser. Development projects for Boot To Gecko include new web APIs linking OS and device capabilities like text, cameras, Bluetooth and NFC chips to content.
The good news is that there is some unification of sorts in progress, most notably Google's Android 4.0 - a.k.a. Ice Cream Sandwich - which brings the smartphone and tablet versions of Android into a single version.
"By creating a single version of Android, Google is making it easier for developers to modify their apps and take advantage of the larger screens of tablets, which should stimulate the creation of apps designed for Android tablets," Nick Dillon, devices and platforms analyst for Ovum, said in a research note.
RIM has done something similar with the recent launch of its new flagship BBX platform, which merges the BlackBerry 7 smartphone OS with the QNX OS for its PlayBook tablets. BBX will support BlackBerry cloud services and both native and HTML5 developer environments, as well as BlackBerry Runtime for Android Apps.
The bad news for developers, says Ovum chief telecom analyst Jan Dawson, is "the adoption of QNX across the entire line in the coming months and years also means that RIM is leaving its traditional BlackBerry developers high and dry." Dawson says existing developers will have no choice but to start from scratch with an entirely new development environment.
Web apps
HTML5-enabled cloud apps won't kill native apps or kill app stores
Native apps are the de facto format for the current apps boom, but that's expected to change with the development of web apps - apps hosted in the cloud that run on the browser and, thanks to features within the HTML5 standard, can function like native apps even when the device is offline. Indeed, web apps are at the heart of Google's long-term mobile ambitions - so much so that its commission fee for apps developers is a paltry 5% (compared to Apple's 30%).
The appeal of web apps is dead simple: they're OS-agnostic, which means apps developers can reach a much broader base of users without having to write separate apps for iOS, Android, BlackBerry, WP7, Bada, LiMo, etc. How broad? Let's put it this way: according to ABI Research, over 2.1 billion mobile devices will have HTML5 browsers by 2016, compared to 109 million last year.
Even though the World Wide Web Consortium (W3C) says the HTML5 standard won't be finished until the end of the decade, 25 HTML5 features currently in development will be in wide use within the next three to five years, says ABI senior analyst Mark Beccue. "We expect HTML5 features in categories such as graphics, multimedia, user interactions and data storage to be widely adopted sooner rather than later."
But that doesn't mean web apps will be competing with those platforms, or with native apps in general, Beccue adds. "HTML5 adoption is going to accelerate because it will be a key differentiator in the smartphone OS war. I believe that Apple will be the key driver of HTML5 and consequently a primary benefactor as well."
Ovum's Nick Dillon adds that the rise of web apps won't spell the end of either native apps nor the app storefront model. "App stores offer a familiar environment for consumer to discover, download and purchase apps, and we anticipate that the majority of app stores will list a mix of both HTML5 and native applications in their catalogues in the future."
Apps for feature phones
2.3 billion feature phones in 2016 = major apps opportunity
The apps phenomenon has been limited to smartphones, and more recently tablets, for fairly obvious reasons. But for all the talk about increasing smartphone adoption as lower-priced models hit the shelves, feature phones will remain the largest handset segment for some time. Ovum forecasts the number of feature phones worldwide to reach 2.3 billion in five years, which will account for 63% of the market.
That's a huge untapped market for apps developers limited to smartphone OSs, and demand is such that Ovum predicts the feature-phone apps revenues will top $1 billion by 2016.
Part of that growth will come from larger handset manufacturers, operators and third parties offering improved distribution channels for feature phones, which have been lacking until recently, says Nick Dillon of Ovum. Also, developers will leverage existing software options like JavaME, Nokia web widgets and Opera Mini widgets to develop simple web apps before moving on to HTML5 as more feature phones ship with compatible browsers (see Web apps).
Meanwhile, there's the ongoing work of the WAC (Wholesale Applications Community), which opened shop in February with eight operators and 12,000 apps. WAC is creating APIs aimed at runtime environments and browsers with the goal of building an OS-agnostic wholesale storefront, ecosystem and billing platform that can bring feature phones into the apps ecosystem.
WAC has been quiet since its February launch. But last month, WAC CEO Peters Suh said in a blog post that "a number of WAC member operators in Asia are on track to launch services in Q4 2011 across a range of devices and a number of application storefronts."
Suh also said that WAC is developing its suite of operator supported network APIs (starting with in-app payments), "which are currently being implemented by a select number of developers with the aim of opening this up to a wider audience over the coming months." Suh said WAC's network API service offering would be available in early 2012.
WAC's network API for in-app payments is well-timed. According to app marketplace analytics firm Distimo, in-app purchases account for a whopping 72% of iPhone app revenues (compared to just 28% a year ago). Close to half of those in-app payments were via free apps. More remarkably, less than 5% of all iOS apps even offer in-app purchases.
Augmented reality
Today: cool but glorified QR codes. Tomorrow: gesture recognition UIs
Augmented reality - apps that use a mobile device's sensors, GPS chip and camera to overlay interactive computer graphics over the real world - is easily the sexiest apps category. AR is still in its infancy - ABI estimates that users downloaded six million AR apps last year, just a fraction of the nearly eight billion downloads in 2010. But ABI is projecting close to a billion AR downloads and $3 billion in global revenues in 2016.
AR is already being used for a wide variety of apps, from games and navigation to advertising and marketing. There are even security-related AR apps under development - a recent Juniper report says that counter-terrorism may become the highest profile area of AR deployment, citing a trial with Logica and the UK government to incorporate location tech and video recognition tech into AR apps for security service handheld devices.
Meanwhile, AR technology is already evolving beyond its current status as a gaming novelty or a snazzier version of QR codes.
UK based software company Autonomy has developed its own gesture-recognition feature for its Aurasma AR app for iPad 2, iPhone 4 and Android smartphones.
Rather than tapping the device screen to interact with AR graphics, users can reach in front of the device and interact with the graphics in AR-space similar to using a Kinect console. For example, an AR soccer game can cast you as the goalie, allowing you to wave a hand in front of the device to block soccer balls being kicked at you.
While gesture recognition may sound gimmicky when used on a smartphone, it's also been touted as a crucial step in moving AR apps from smartphones - which is still a bit clumsy, as smartphone AR requires users to hold the device in front of them all the time - to glasses enabled with wireless connectivity.
Qualcomm - which released its AR SDK earlier this year - is also developing a gesture-based user interface for devices that enables apps to be operated by waving a hand over the display. Qualcomm chief Paul Jacobs demonstrated the technology for the first time at the company's annual developer event in Istanbul, telling Telecom Asia it should be ready to roll in the second half of 2012 or early 2013.
The tablet effect
Tablets bring mobile video back; Kindle Fire puts content front-and-center
Tablets represent another playground for apps developers to come up with new apps that work better on a bigger tablet screen than on a smartphone, particularly video apps. A recent In-Stat study found that half of tablet owners use them to watch TV shows and feature-length films. That figure will pass 85% in five years, at which time nearly 60% of smartphone/tablet owners will also be viewing over-the-top video at home, says In-Stat research director Keith Nissen.
"Tablets, in particular, have become a primary video device, both inside and outside the home," Nissen said in a research note, though he adds that doesn't mean users will stop watching videos on smartphones. In fact, they'll expect to access video content across all devices, including the living room TV set.
"As these devices become a center-point for video engagement and consumption, content providers, device manufacturers, and operators need to support a multiscreen usage model that reflects social interaction, screen interaction, personalization, and mobility."
Unsurprisingly, the iPad remains the king of the tablet hill, with other tablet vendors struggling to match Apple's ecosystem, although Android collectively has taken 20% of the tablet market from Apple in the past year.
The latest tablet to generate "iPad-killer" hype is Amazon's Kindle Fire, unveiled in late September. In terms of hardware, the Kindle Fire is more of a challenge to the Barnes & Noble Nook e-reader than the iPad, but the real attraction and potential game-changer is the Fire's integrated content experience - specifically, all of the content and services (including its Prime service, which includes streamed movies and free shipping) that Amazon already sells, which is also what allows Amazon to sell the Kindle Fire for an enticing $199.
"Amazon's retail-based business model allows the company to subsidize the device on the premise that consumers will buy more from Amazon, be that physical goods or its digital content," says Ovum practice leader Adam Leach. "This model is the direct inverse of Apple's model; Amazon is selling a device in order to sell more content where as Apple sells content in order to sell more devices."
And if the Fire does well, observed Rethink Research director Caroline Gabriel in a research note, "Amazon is likely to move more directly into the iPad's."
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