7
Jan

Has node.js and similar web server platforms led consumers to think apps aren’t connected to the Internet?

2-Color-Design-Hi-Res-100px-widthThe New York Times recently published a couple of articles written by Conor Dougherty. These articles point to what Dougherty described as diminished mobile app consumer access to the Internet. This shrinking online accessibility, Dougherty argues, can be attributed to mobile apps, themselves, which run fine without web browsing.

But the performance of every one of the apps mentioned in these articles, as I am completely sure Dougherty would agree, is entirely dependent on the Internet. The real issue for Dougherty, I would surmise, is the transparent nature of this performance, which, somehow “happens” without any requirement for user intervention. Therefore, Dougherty argues, the quality of the personal computing experience for app consumers, has been degraded.

Of course none of this performance would be possible without “web server platforms” like node.js. These app components add web server functionality. So the apps can perform, online, without a web browser. There is not much new about this beyond the fact node.js is an example of how to achieve this performance with JavaScript, which is a very popular scripting language at present.

The point I am trying to make is developers and the ISVs supporting their efforts need to be sensitive to public perception. Dougherty is not writing in a vacuum. His articles are read because consumers are interested in the topics covered. So it is likely safe to say some segment of the consuming public feels the same way, regardless of whether or not the public perception is actually correct.

Maintaining sensitivity to this type of public notion (perhaps “perception” is not the right word) should, in my opinion, translate into some type of communications effort (PR or MARCOM) to better inform consumers how apps actually work. At the same time, perhaps developers and ISVs have an opportunity to bake in some of the “choice” Dougherty finds missing from the app computing experience. Dougherty longs for a “unifying link”. Would it make sense for someone to build in a method of bolting otherwise unconnected apps together? Perhaps with some type of search feature? I am not saying yes, or no, but, perhaps someone would like to check it out.

If you find a market for these feature, do let me know.

Ira Michael Blonder

© IMB Enterprises, Inc. & Ira Michael Blonder, 2015 All Rights Reserved

30
Jan

Are App Stores a Looming Cash Machine?

Consumers opting to buy a Microsoft® Surface 2 will receive a $25.00 coupon in the box, along with some other promotional offers. This coupon can only be used to purchase an item offered in the “Store” feature of the Surface 2 Start Screen. But using this coupon can be a challenge. My review of the Apps offered didn’t produce much in the way of productivity. I noted lots of games, and lots of free Apps.

So why is Microsoft including the coupon in the retail customer product package? Anyone listening to Apple’s Q1 2014 webcast Earnings Call will hear Peter Oppenheimer sum up a very large business for Apple — it’s App Store. Oppenheimer estimates “[t]he App Store now offers 1,000,000 Apps in 24 different categories, and cumulative downloads have surpassed 65 Billion”. (quoted from the Apple webcast, a link to which has been provided in this post)

These numbers are not insignificant, especially for a company like Microsoft, which, historically, has always maintained a healthy developer ecosystem. Indeed, one can argue much of Microsoft’s success across the early days, following the launch of Windows, depended almost entirely on the third party developer community and the applications they brought to the public for the platform.

Oppenheimer goes on to present an even more important number: “Our App developers earned $2 Billion from sales of Apps for the quarter”. With an annual run rate of $8 Billion, any 3rd party business simply building Apps for Apple’s App Store might be looking forward to a very promising future.

Certainly Microsoft has not been slow to learn this lesson. The $25 box stuffer coupon makes sense as a means of driving customers to pump up the Store feature of the Surface, and the Windows Phone user experience. There are challenging impediments to Microsoft successfully kick starting this business, not the least of which being the small footprint of Microsoft’s mobile devices across the broad market when compared to Apple’s iOS. So a rapid, successful ramp up in phone and tablet units sold is a mandatory requirement of launching the Windows store App effort.

Ira Michael Blonder

© IMB Enterprises, Inc. & Ira Michael Blonder, 2014 All Rights Reserved

30
Nov

Device Apps Provide ISVs and Their Hardware Partners with a Compelling Method of Maximizing Recurring Revenue Models

Apps provide ISVs and their hardware partners with a powerful method of closely coupling durable and non durable components of what we have referred to as a “razorblade” product development strategy. With computing systems effectively locked down, as they are for smart phones and tablets, which are, effectively, closed systems that run on a reduced instruction set computing (RISC) set of features, vendors have located a compelling method of producing revenue from durable and non durable components of these systems. In fact, Apps that are specific to operating systems (OSs) are entirely comparable to the coffee pods that are required for a single brew coffee system marketed by Green Mountain Coffee Roasters, Inc — Keurig®. We think that the companies producing these products are after the same level of enormous profitability that this product from Green Mountain Coffee Roasters, Inc. has produced.

Of course, not all market participants are proceeding with the same level of methodical dedication to a profit objective. Consider, for example, Google’s Android system. In fact, as Darcy Travlos pointed out in an article published on August 22, 2012 on the Forbes web site, Five Reasons Why Google Android versus Apple iOS Market Share Numbers Don’t Matter, “Google gives away its Android operating system in order to have real estate on mobile devices and, therefore, ubiquity is critical for Google to deliver ads. On the other hand, Apple makes money on every iPhone and iPad it sells, even before an ad is delivered to the device” (quoted from Ms. Travlos’ article, for which we have provided a link). In fact, as Ms. Travlos so aptly concludes, Google’s purpose for engaging in this smart phone market with, effectively, a closely coupled App component, has much more to do with expanding the application of its click ad electronic promotion product to a new market place, than it does with extract profit from both ends of a razorblade product marketing strategy. Again, as Ms. Travlos points out, Apple’s intentions are quite another matter. In fact, Apple is realizing enormous revenue from the sale of the durable component, while tightly managing participation in the App marketplace.

In fact, Apple has innovated this razorblade product model. We think that Apple is using the non durable component — Apps — to drive more sales of iPads and iPhones, which amount to the durable component of these products. As the Apps attract more users, more iPads and iPhones will have to be purchased by new customers. As well, compelling Apps will require that customers continue using these smart phone and tablet devices. We think, further, that Microsoft® has studied all of this very closely. Stay tuned as they try to apply the same principles to legacy office computing as they roll out Windows® 8 and Office® 8, which will both have their own App stores.

© IMB Enterprises, Inc. & Ira Michael Blonder, 2012 All Rights Reserved