Android market downloads will hit 8.1 billion in 2011

The world’s smartphone users will download a total of 18 billion mobile apps during 2011, up 144 per cent from 7.4 billion in 2010, according to Ovum. The firm forecast that the number of downloads will grow to 45 billion in 2016.

While many of the apps downloaded by consumers are free of charge, revenues are increasing. Ovum expects app downloads to generate sales of $3.7bn this year, up 92 per cent on 2010, eventually hitting $7.7bn in 2016.

With the growing number of Android handsets available, Ovum predicts that Android Market downloads will outstrip downloads from Apple’s App Store for the first time in 2011. The firm expects Android downloads to hit 8.1 billion this year, compared to six billion for Apple.

“Consumers’ seemingly insatiable demand for mobile applications is set to continue this year,” said Ovum analyst Nick Dillon. “The outlook for the longer term is also positive with consumers set to continue to use apps to add new features to their phones and to access their favourite services on the go.”

The increasing popularity of smartphones has laid the foundations for the growth in app downloads. Figures from Gartner show that, with unit sales of 107.7 million, smartphones accounted for 25.13 per cent of total handset shipments in the first quarter of this year, up from 16.86 per cent for the first quarter of 2010.

Carrier billing plays on the operator relationship with the end user

Vodafone has begun rolling out direct operator billing for apps sold through the Android Market, allowing users to charge purchases direct to their phone bill.

Being able to charge Android Market purchases straight to a phone bill or prepay account avoids the user having to enter credit card details. Moreover, billing is often cited as one of the areas where carriers have the upper hand through their relationship with the end users, and can provide value to over the top players.

“Vodafone operator billing extends developers’ reach to the large number of app-buying customers who are unwilling or unable to use credit cards,” Vodafone said in a statement. “In some countries this can be more than 90 per cent of the market.”

The first operations to get carrier billing for Android will be Vodafone UK and Vodafone Germany.

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Orange promised developers a faster route to its global subscriber base

International carrier Orange has announced an overhaul of its own-branded application store that it said will dramatically cut the time it takes for developers to get their apps to Orange customers.

Orange Partner Connect allows developers to submit applications online through a single portal interface for distribution—if deemed suitable—across the Orange footprint, the carrier said. The initial phase of the project, which begins this month, caters only to developers of applications for Android handsets, although Orange said that support for Java and Blackberry platforms will be available in the first quarter of next year.

Orange said that developers can register online; sign a single online agreement to distribute their applications through the Orange App Shop in the markets of their choice; submit applications; create their publishing account; benefit from application review and quality assurance testing from Orange experts; know when their applications go on sale in each county; monitor sales and downloads; and collect payments.

The firm said that it will be giving developers a 70/30 split of revenues, although developers will be given the option to channel some of their share into marketing programmes that could see their applications given extra exposure on the Orange digital inventory.

“We have learned from our experience in publishing Orange-branded applications on various app stores and listened to the needs of application developers to create a service that works for them. Orange Partner Connect has been designed so that our developer partners can benefit from Orange’s global scale, local presence and trusted customer relationships. With this new service we aim to establish a transparent win-win business partnership that developers can trust to truly market their applications to local audiences,” said Yves Tyrode, Executive Vice President of Orange Technocentre.

The Opera browser has been submitted to the iPhone App Store

The most successful browser in the mobile market, Opera Mini, may be making its way onto the iPhone in the near future. On Tuesday, Opera Mini for iPhone was officially submitted to the Apple iPhone App store for approval.

After showing a sneak peek of the browser in Barcelona in February, the Norwegian firm has now made a video available to the general public, showing off Opera Mini’s “fast like a rocket” capabilities, billed as six times faster than Safari on the iPhone.

“Due to server-side rendering, Opera Mini compresses data by up to 90 per cent before sending it to the phone, resulting in rapid page loading and more web per MB for the end user,” the company said. “Those familiar with iPhone roaming charges will relish Opera Mini’s ability to deliver more for less, giving users the web they want quickly, without, the high costs.”

Ah, now here’s the catch. The video does indeed make Opera Mini look blazingly fast, but this server side compression technology is likely based on Opera Turbo – a box that Opera sells to operators to stick on their networks to improve the mobile web experience. So what happens if the operator in question doesn’t have the box installed? Will users get a slower experience?

Saying that, server side compression is quite popular among mobile operators, but is one implementation of the technology compatible with all browsers? Still, Opera Mobile is already installed on more than 50 million handsets worldwide, so it’s a safe bet that a good number of carriers use Opera Turbo.

Computing resources are shifting to the cloud

Despite the proliferation of smartphones and efforts of promoting native development and runtime platforms, web-based services are emerging as cost-effective challengers that could take application runtime to the web environment. Not only will this allow the development of cheaper and advanced applications, but it could also shift computing resources and their management from the device to the cloud, which could in turn lower the barriers for enabling advanced applications over non-smartphone terminals.

In recent years, the mobile industry has moved from proprietary to open, allowing for continued improvements in device hardware and more innovation at the application level through the creation of developer communities and application distribution mechanisms. This trend has attracted the majority of device vendors and operating system (OS) developers as well as the mobile operators, which are now eager to offer their own branded app store and subsequently an immersive user experience and advanced mobile applications to their customers. As a result, there has been a strong increase in smartphone OS handset shipments, estimated by Informa Telecoms & Media at 216.3 million units in 2009, up 34 per cent on the previous year. By 2014, sales of smartphones will reach 572.5 million units, representing 40 per cent of total handset sales.

This trend is actually encouraging developers to create applications that are targeted at different OSs and native runtime environments. There are many advantages in developing mobile applications natively, including better integration with the device functionality, high-performance, always-available capabilities, and access to greater support from device vendors through the availability of advanced tools and developer programs.

However, there are also many challenges facing native application developers, which include: code complexity, which could affect the cost of the application development and time to market; application portability across a wide range of devices to achieve economies of scale; and restricted application distribution to operators and OEMs’ channels. Moreover, in the case of Apple, application approval has been a contested topic that has alienated several high-profile app developers from Apple’s App Store.

The fragmentation of OSs, user interfaces (UIs) and runtimes and associated developer programs are also likely to hamper any advantage gained from open mobile applications development. Open OS platforms are often differentiated by their level of support to multimedia and graphical capabilities, network connectivity options, input methods and hardware performance. Chipset manufacturers will find it increasingly difficult to maintain a high-performance and enhanced user experience over different platforms and their associated versions because each platform requires a deep integration with the device hardware and a number of optimization cycles are needed to ensure overall system stability and improved performance. Porting an application to several OS platforms is can be a  good reason for failure among independent software vendors (ISVs), but is necessary to achieve economies of scale and reach a wide audience.

In addition, development tools associated with different OSs often lack the cross-platform approach that could enable the developer to write the application once and distribute it across various devices powered by different OSs. Mobile native application developers are stymied by the extreme difficulty of writing mobile apps for multiple OSs, UIs and runtime environments, especially when there is no clear winner and diversity is just increasing with the mushrooming number of app stores. Then there is the challenge of finding the right placement for this content so that it can be discovered easily by the end user.

Native applications developers also need to bear the cost of testing, certification and distribution of their applications. The majority of OEMs, operators and mobile app store (MAS) owners are imposing their own test and certification programs on developers. Testing fees are based on the complexity of the application submitted and are between $250 and $4,000 per submission. If the application is meant to run over variety of devices and terminal platforms, the third-party developer pays the full test fee for one device and gets a rebate for testing the same application on a second device. Additional fees might also be required for network-based applications.  In addition, different OEMs and operators have different criteria for application testing in their certification programs. Native applications developers need to comply with these additional programs if they want their applications to reach different MASs and operator portals, which translates into additional cost burdens.

Also, an obvious difference between desktop and mobile native applications is mobile connectivity. Compelling applications should make maximum use of the customer’s mobility, from mobile location services through to interactive games. Simply replicating the desktop experience will not be enough to sustain long-term growth; users will not pay for mobile versions of applications that are available either free or nearly-free on their desktop computers.

For these reasons, generating native applications that address the long tail of consumer requirements and different consumer groups using various OSs and UIs could be cumbersome, costly and time consuming.

The shift to web runtime and cloud-based services

The mobile web applications development environment is an emerging alternative to native applications. This shift is best illustrated by the rush of operators and handset vendors to provide their own widget ecosystems which use web technologies to facilitate mobile applications development and lower the overall development cost. It could also enable mobile operators and vendors to tap into the wealth of the internet and address their customers with contextual applications that are more relevant to them.

Until recently, a number of barriers prevented web-based applications and cloud services from gaining ground in the mobile market, including: the cost of connecting to web services; the low-bandwidth and latency provided by current mobile access technologies; the bad quality and performance of mobile browsers and related web technologies; and security issues.

Despite their current shortcomings in terms of performance, power consumption, integration and always-on capabilities compared with native applications, web applications have many advantages including: faster development, time-to-market and monetization; wider distribution channels; and adaptability for cross-platformization.

There are many changes in the mobile market that are likely to shift applications development to the web including:

• The accelerating migration towards mobile broadband services.
• The dramatic improvement in mobile browser solutions and UIs.
• The advances of internet transcoding and multimedia transformation.
• The emergence of widgets and widget runtimes as efficient solutions for easy content discovery.
• Deep integration of web services with the device capabilities and features to enable the creation of contextual applications.

In the past year, several trends have crystallized around mobile web runtime technology which promise to transform mobile web applications development, distribution, installation, execution and management. A number of new OSs, including Google’s Android and Palm’s webOS, and a number of mobile platforms, including Microsoft’s Silverlight, Nokia MWRT, Qualcomm’s Plaza Mobile internet, Adobe’s AIR, Access Netfront Widget platform and Opera Widgets, are designed with web connectivity and functionality in mind.  The whole idea is to enable the easy transition of applications development from a native environment to the web environment.

Get more information on the Informa report Mobile Web Applications Development

A number of operators, including Vodafone, Orange, T-Mobile, O2, Verizon, AT&T, KDDI, NTT DoCoMo,  Softbank and China Mobile, have already developed – or are in the process of developing – widget stores and web developer programs that will make the development and distribution of web applications  easier and content discovery and management simpler on the mobile screen.  For example, the aim of the Joint Innovation Lab (JIL) initiative – founded by Vodafone, China Mobile, Softbank and Verizon – is to stimulate a new generation of mobile internet applications around which they can build their service plans and value-added services. JIL’s first project is to develop a widget ecosystem with a single point of access to enable developers to tap into the combined customer base of the four JIL operators – estimated at 1.1 billion subscribers.

The trend towards the adoption of the web as a mobile applications development environment is likely to intensify thanks to both the emergence of mobile cloud computing and the low latency of the next-generation access networks, which include LTE, HSPA+ and WiMAX.

Informa expects the web to become the new ubiquitous platform for application development as more and more applications move to the cloud and allow users to access their personal information anytime from any device and over any access network. This trend is likely to remove “smartness” from the device to the cloud, which could potentially reduce the burdens of fragmentation that the native development environment suffers from and spur innovation through the involvement of the much wider web developer community in creating contextual mobile applications. In addition, this trend will help to shift processing and storage resources to the cloud, which means advanced applications could be accessed by more resource-constrained devices. This could in turn widen the addressable market for the cloud applications beyond the smartphone market.

By increasing the reliance of end users on the web and cloud applications, new business models will emerge and revenues will be diversified from multiple sources that include advertising, network API charges to third-party service providers and the creation of premium services for the enterprise market. In addition, the migration to a web development environment could increase traffic around hosted services such as e-mail, VoIP, online office, calendar, online gaming and social networking.

Several device vendors have been pre-installing key widgets in their devices but the trend now is to reorient their software platform strategies towards the creation of widget ecosystems for the development, distribution, lifecycle management, discoverability and monetization of widgets and web applications in general. These applications are generally easy to create, fast to distribute and serve a plethora of niche markets on the internet.

Tier-1 operators are also realizing the potential of partnering with web application developers to enable innovation over their networks, reduce costs related to building data services and build service plans around long tail of consumer applications that target different user groups.

The aim of major operators is to move away from pipe services based on flat rates towards the creation of content-based service plans that will enable them to address different consumer groups with relevant real-time contextual applications and services.

Operators that are not experts in mobile data services, notably Mobile 2.0, have now openly admitted that they will not be able to create these services on their own and expect to employ third parties in the value chain to create best-of-breed services with sustainable business models.

In this context, vendors of mobile widget solutions could facilitate the work of operators by enabling them to bridge the gap between the web and mobile applications development. These vendors already propose a suite of applications that could include a widget player, idle screen replacement, ODP and a white-label application store. These products could be deployed either individually or as part of an end-to-end widget development, distribution, presentation and monetization ecosystem.

Informa’s report Mobile Web Applications Development looks at various solutions for developing web applications and widgets, their respective deployment scenarios and the different features that could be requested by operators or OEMs that wish to add mobile internet and branded services through widgets. Obviously, operators and OEMs have different requirements when choosing a mobile widget solution depending on which market segments and regions they want to address and which services they aim to deploy. The report also looks at the role of mobile widgets in providing a rich mobile internet experience to help operators and OEMs create new service opportunities, increase customer loyalty and extend the value of their brand to new market segments. It includes a comprehensive and detailed analysis of the revenue opportunities and key trends in widget ecosystems, enabling technologies and the challenges facing operators and OEMs in implementing them.

Motorola's Chinese app store will cater to Android users

Resurgent vendor Motorola opened the doors of its Android focused app store in China on Friday, paving the way for the company’s assault on the burgeoning Chinese mobile market.

The Shop4Apps, or Zhi-Jian-Yuan, which means “Place for Apps Wisdom” in Chinese, will allow users to download apps and customise their Android-based handsets with new services including a search provider of their own choice.

The search providers available are the government sanctioned local providers like Baidu, and probably exclude the likes of Google, which is in the middle of a political dispute with the Chinese government.

Google isn’t launching its own-brand Android devices, like the Nexus One, in China, and is threatening to pull its local search engine amid censorship concerns and allegations that Chinese hackers broke into Google services and gained access to the email accounts of Chinese human rights activists. So the Motorola launch sees Android coming to the Chinese market without Google’s support.

Motorola will take its recently unveiled MotoRoi device to China via China Unicom and will also release OPhone devices based on China Mobile’s own Android-based platform.

Motorola said Shop4Apps will give developers a path to promote their applications in the market through MotoDev, Motorola’s global developer program, and through other Android development ecosystems like OPhone.

In related news, Android backer Google announced 17 per cent year over year growth taking its fourth quarter 2009 revenues to $6.67bn, while fourth quarter net income came in at $1.97bn, compared to $382m in the fourth quarter of 2008.

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The Amazon Kindle e-reader

Social network cum online retailer Amazon expanded its empire with the launch of an app store of sorts for the e-reader market.

Using the US firm’s Kindle Digital Text Platform (DTP), independent publishers can upload and sell their books in English, German and French to customers worldwide via the Kindle Store.

Additional language options for the DTP platform will be added in the coming months, paving the way for wannabe authors worldwide to sell their wares online. Although the revenue cut Amazon takes is somewhat on the painful side.

Publishers can set their own list price for content, but Amazon will keep 65 per cent of the revenue. This compares to Apple’s 30 per cent cut of apps sold in the App Store.

Late last year Amazon pushed its own e-reader, the Kindle, global, validating the initiative’s nascent business model, with some Wall Street analysts, including Citigroup’s Mahaney and Stifel Nicolaus’ Devitt, recently predicting that the Kindle will quickly grow into a $1bn business. As Informa analyst Tammy Parker notes, that is a huge vote of confidence for a consumer-electronics device and related service and, although it’s far from perfect, the Kindle is showing that a wireless product can be a revenue generator even if the end-user is not a direct subscriber to the mobile network that serves the device. “It opens the door to advertising-supported mobile services and many more business models under which customers can enjoy the benefits of mobile connectivity without having to pay a subscription fee,” Parker said.

The LG GW990

As Las Vegas gadget show CES wound up at the end of last week, Intel announced that it too would be going after a slice of the app store action.

Intel president and CEO Paul Otellini unveiled a beta version of the Intel AppUp center, targeted at netbook devices. The storefront is being supported by devices manufacturers Acer, Asus, Dell and Samsung and will support Intel-based devices, which will presumably run on Intel’s homebrew Linux-based operating system, Moblin, unless the company starts supporting Android on the Atom that is.

Otellini was also showing off the LG GW990 smartphone, based on ‘Moorestown,’ Intel’s next-generation platform for handhelds and smartphones. The GW990 is based on Moblin and boasts a sizeable 4.8” display, making it a little more than pocket sized. With a touchscreen, five megapixel camera, 16GB of storage, HD video, wifi and HSDPA, the device may give a glimpse of mobile form factors to come.

“Computing is no longer confined to your computer – it’s everywhere,” Otellini said. “Advances in connectivity, intuitive user interfaces, immersive content and computer chip performance have allowed computing to move into new areas. Computing moving into all manner of devices and experiences all around us improves our personal productivity and enjoyment.” Examples cited by Otellini include infotainment systems for cars, digital interactive signs, shopping kiosks and medical devices.

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Aircel to launch app store in India

Even the emerging market operators are looking for a slice of the app store action. Indian operator Aircel said Tuesday it has tapped up application services firm Infosys to build it an application store catering to Aircel’s almost 30 million mobile subscribers.

Infosys will use its white label app store platform Flypp to power the shop front, which will host mobile applications drawn from an Infosys-managed ecosystem of independent software vendors.

But it’s unlikely that the types of applications in Aircel’s store will be anything like those now common to the iPhone and Android app stores, seeing as all of Aircel’s subscribers are still equipped with 2G GSM handsets and generate a monthly ARPU of $2.36 according to Informa’s WCIS database. Instead we can expect to see mobile money and SMS-based m-payment applications, which are already driving data revenues in the emerging markets.

Gurdeep Singh, COO of Aircel, said the Aircel Application Store “Will offer consumers a broad selection of most relevant applications to choose from in the most convenient manner be it through voice, SMS, GPRS or the internet on your mobile.”

India’s mobile operators are still holding out for an auction of 3G spectrum, which is expected to take place this month, but may well be delayed again.

Palm opens developer programme up to Europe

Lagging behind its smartphone peers somewhat in terms of app availability, US vendor Palm has announced the expansion of its webOS developer programme to Europe.

Following the launch of the programme in the US, which has seen about 600 new paid for apps available for Palm devices in the last two months, the firm is bringing it developer initiative to Europe – starting with the UK, Ireland, Spain and Germany from March.

“The general app catalog model is not new, but what we’re doing with it is,” said Palm. “We offer greater freedom and choice of how to get your applications to market and unparalleled control to promote and grow your business. For developers looking to make money, it’s all about speed, promotion, and reacting to customer feedback. Our platform gives you greater access to customers and faster cycle times to make higher-quality, compelling applications.”

As of the start of 2010, Palm has just over 1,000 applications available in its App Catalogue, which caters to webOS-enabled devices such as the Pre and the Pixi.

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