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New Media Life Cycle Analysis

August 6, 2009

iPhone Apps
Channel Overview

iPhone Apps: A Category Creator


iPod Apps Too
Not only has Apple
changed the mobile landscape
with the launch of the
application store (or app
store), but they’ve brought
other ‘connected’ devices into
the loop as well.
Even the iPod Touch,
which uses a wi-fi connection
to access the internet
supports many of the
applications developed and
The iPhone and Apple’s iTunes App Store have created a whole distributed through the app
category for mobile phone applications, commonly called mobile apps. store in iTunes.
The concept is simple: allow developers to create applications for The iPod Touch is almost
the iPhone platform and distribute those apps through a branded exactly like the iPhone -
content aggregator. without the hassle of monthly
Apps can be sold through the same channel as music and movies charges for cell phone service.
and can easily be installed on any iPhone. However, that doesn’t
The hype for the App Store started in 2007 and the channel for necessarily mean you can’t
distributing applications through iTunes launched in July of 2008. make a phone call.
Since then, more than a billion applications have been sold through Skype launched an app
the channel and with the launch of the latest iPhone the search for that allows you to make
iPhone apps has seen another meteoric rise. ■ internet calls right from your
iPod Touch. ■

TIPPINGPOINT LABS
New Media Life Cycle Analysis August 6, 2009

Drinkspiration spices up your drink Secure Access to your USAA account. Play Scramble $om your phone with
variety. your $iends on Facebook.

Content Potential

Ensuring that Mobile Access is the Focus of Your App


As you already know the which you are ordering a drink
excitement surrounding the should define what you’re
iPhone App as a distribution drinking. It’s nicely executed and
channel for great content has cleverly branded.
created an explosion in corporate The keys to developing
marketing executives’ desire to successful, branded iPhone
play in this space. applications hinges on these
However, few corporate apps concepts:
use the platform to accentuate • Focused content scope
the capabilities of a connected
device. • Use case modeled around a
mobile experience (you’re at a bar
One standout: Nationwide and need a drink, or you just got in
Insurance’s mobile application an accident what do you do?)
designed to help you capture the
details in a stressful situation: • The content already exists,
right after you get into a car you’re just using a new platform
accident. • Any tool you’re developing
Another branded iPhone has a practical use for a well-
application that hits the mark is defined audience
called Drinkspiration. Absolut • If it’s not the best medium to
Nationwide iPhone application: Get Vodka is behind this one. The deliver the content - don’t do it. ■
help in an accident.
concept here is that the context in

TIPPINGPOINT LABS
New Media Life Cycle Analysis August 6, 2009

Mobile App Interest Source: Google Insights

Mobile apps Palm apps Pre apps Blackberry apps Android Apps
30
22.5
15
7.5
0
21- 07
25- -07
29- -07

07
-07

12- 07
16- -08
22- -08
26- r-08
31- r-08
05 -08

-Au 8
13- -08

27- v-08
18- -08
22- t-08

31- -08

-M 9
11- r-09
16- r-09
20 -09
25- -09
-09
l-0

-0
-

ov-
ec-
Jun
Jul

Sep

c
g

Jan

Sep
g

Jan

y
n
Jul
-Ju
Ma
Ap

Oc

a
Ap
De
No
Ma
Au

Ma
Fe

-Ju
-D
-N
16-

09
08

07
03

Excluding iPhone apps from consideration, neither Palm nor Blackberry have differentiated themselves as
an application platform.

Medium Overview

Mobile Apps Have A Lot of Growing To Do


As you can see in the life cycle analysis above,
mobile applications at the enterprise level. Palm,
mobile applications as a category are in the although it has seen a long term slide in adoption
experimentation phase. The iPhone App Store and from it’s early dominance in the smart phone
the large volume of applications available on a single
category, has redefined their product and introduced
platform, combined with the ease of use and wide the Palm Pre as its latest platform supporting the
acceptance of the apps themselves have pressured development of mobile applications. Google’s
other smart phone manufacturers to enter the game. Android platform showed early promise however, the
Google with their G1 phone running the Android quality of applications deployed on the Android
operating system, Research In Motion with their platform, to date, is low.
Blackberry phones and Palm with their Palm Pre Moving forward, developing mobile applications
have all developed their own platforms for the will provide organizations with tremendous
creation and distribution of mobile apps. opportunities to deliver valuable content right to the
Mobile applications are here to stay. palm of your hand.
Nevertheless, there is a tremendous amount of This category is so new that rushing to develop a
growth expected in this market as it moves from mobile application if it is not core to your business
Experimentation to Adoption. might be de-focused and not worth the effort.
Blackberry, with it’s wide acceptance and Waiting by the sidelines and letting the industry
adoption in corporate environments, might be the evolve is a recommended course of action.■
best place to develop and deploy business to business

TIPPINGPOINT LABS
New Media Life Cycle Analysis August 6, 2009

100

Adoption
75 Experimentation ation
s

pect
d Ex

Gestation
ate
Infl
o
50 t ht
Pa

ge r
25 rig
y T
g
nolo
h
Tec
Source: Google Insights
0
7-J 7
07

7
-07

24- t-07
29- -07

2-F -07
8-M 08
08

8
8
-08
-08

4-O -08
8-N 08
13- -08
17- 08
-09

28- -09
2-M -09
6-J 09
-09
-09
-0

g-0

r-0
y-0
ul-

-
ar-

ct-

c-

ay-
c
v
un

Sep

ov

r
eb

Jun
Jul

Jan

un
Jul
c

Ap

Ma
De
No

De
Ma
Au

-Au

Fe
-O
2-J

26-

11-
21-
15-

12-

21-
11-

17-
20

30

Superimposed on the Tippingpoint Labs New Media Life Cycle is Gartner Hype Cycle
the Gartner Hype Cycle. As interest in iPhone Apps peaks, people
will ask, “what now?”, prompting a sharp decline in the interest of
iPhone apps. When that happens, many of marginally successful
apps will go out of style. Don’t be a marginal app.

Phase Analysis
iPhone Apps in Gestation: Limited by Platform Adoption
iPhones represent a relatively small percentage of and Palm, it is unlikely that iPhone Apps can drive
the global sales in mobile phones. Today, iPhone’s through the escalation phase.
represent only 1.1% of the global cell phone market. Although the App Store’s monetization model
Blackberry also only captures 1.9% of the market. As appears to be extremely successful the iPhone’s
a result, mobile application growth will be limited bycurrent pricing structure does not allow for massive
the growth for the platforms that support them. market dominance. This monetary barrier to entry
As you can see from the New Media Life Cycle will stifle the growth for their mobile applications.
above, the iPhone App platform is in it’s Gestation Moving through escalation and watching how Apple’s
Phase. With each new iPhone released, giant spikes competitors attack the monetization of their mobile
in interest are apparent, however, the overall growth applications will define how successful Apple will be
in app adoption remains relatively constant. Without in the long term. ■
growth in the Mobile Application development
market from competitors like Blackberry, Android

TIPPINGPOINT LABS
New Media Life Cycle Analysis August 6, 2009

Gender Income
16%
Male 28% $0-30K
Female $30-60K
47%
53% 25% $60-100K
$100+
31%

Age

14%5% 3-12
23% 13-17
25% 18-34
35-49
34% 50+

Source: Quantcast

Audience Analysis

iPhone’s Trend Young, High HHI

If you’re looking to reach a young audience, the


iPhone is a great place to be creating valuable mobile
apps. Teens, between the ages of 13 and 17 make up
about 23% of their users. This is above average for
mobile platforms. Meanwhile, 34% of there users are
aged 18-34.
Not surprisingly, iPhone users have high
household incomes with 28% of their users bringing
in more than $100K a year. ■

TIPPINGPOINT LABS
New Media Life Cycle Analysis August 6, 2009

User Pressure
• Jail Breaking

Platform Channel or Exposure


Momentum Platform
• Easy-to-use interface
• Last two iPhone captures media
releases attention
• Required: Mobile • Apple’s Google Voice
Application growth rejection

Competitive
Threats
• Creation and
Distribution of high
quality mobile apps

Key Forces

Overexposure & Competitive Threats


Platform Momentum applications in the App Store, it’s harder and harder
Apple’s app store has enjoyed tremendous to find high-quality applications that drive long term
momentum with the last two iPhone releases. use. Recent exposure about Apple’s denial of
However, without growth in the Mobile Applications development for the Google Voice app resulted in a
category, this momentum will stagnate and adoption large pushback and some negative exposure that
will slow down. Unless Apple drops their iPhone showcases their control over the development and
prices further, the iPhone may be stuck around 2% distribution of iPhone apps that might have many
adoption in the market. developers looking for alternative platforms.
Competitive Threats User Pressure
The smart phone market is highly competitive Apple has always maintained a loyal following of
and the only thing holding back Blackberry, Palm and fans. However, “jail breaking” iPhones will continue
Android from tremendous Apple-like growth is the to represent a major threat from a user-base outside
creation and distribution of high-quality mobile of the traditional Apple fans looking to expand the
applications developed for their platforms. capabilities of the phone outside of Apple’s purvey. ■
Exposure
There is no doubt that the iPhone has garnered
tremendous exposure since it’s debut. The product
redefined the category with an easy-to-use interface
that captured the media’s attention. However, with
that tremendous exposure and the explosion in

TIPPINGPOINT LABS
New Media Life Cycle Analysis August 6, 2009

100

75

50

25

Source: Google Insights


0
7-J 7
07

29- -07

4-O -08
-07

24- t-07

2-F -07
8-M 08
08

8
8
-08
-08

8-N 08
13- -08
17- 08
-09

28- -09
2-M -09
6-J 09
-09
-09
-0

g-0

r-0
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ul-

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ay-
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v
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Sep

ov

r
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Jun
Jul

Jan

un
Jul
c

Ap

Ma
De
No

De
Ma
Au

-Au

Fe
-O
2-J

26-

11-
21-
15-

12-

21-
11-

17-
20

30

iPhone app interest has flat lined and will need growth in mobile application interest before hitting escalation.

Forecast Analysis

Stagnant Growth Dependent on Competitor’s Success


Apple is unpredictable, however, unless the With a younger, non-corporate audience
market for both smart phones and mobile apps grows dominating the iPhone market, corporate
Apple’s iPhone will only slowly grow. applications will have trouble finding an audience in
The iTunes App Store has seen tremendous the iPhone user-base.
growth with new mobile apps added everyday, So far, Palm, Blackberry and Android have had
however the plethora of applications has resulted in
trouble finding the right applications to push growth.
an over saturated market making it difficult to standThis is a direct result of trying to replicate the
out. iPhone’s mass market appeal. Business-to-business
Only the most well-designed, highly effective, applications in the Blackberry market look to be
platform-centric applications bubble to the top stand out success stories, if they can avoid getting
making developing a new iPhone application difficult sucked into the iPhone’s momentum.
and wide adoption unlikely.

TIPPINGPOINT LABS
New Media Life Cycle Analysis August 6, 2009

Recommendations

Look to Other Platforms For Breakout Success


Apple’s iPhone is all the rage. There is no doubt
about it. However, along with the tremendous
attention and momentum it has garnered comes
some opportunities to those looking for a break out
hit.
High Volume Low Quality
With the tremendous volume of iPhone apps
comes the realization that only a small percentage of
the applications are high-quality. It’s very hard to
stand out in this environment unless you have a killer
application (read high-cost.)
Blackberry & Android
It is our recommendation that if you would like
to experiment with the deployment of a mobile
application that you look to the Blackberry and
Android platforms. If you can create a high-quality
application, that either platform can highlight as a
tremendous success, you may become the poster-
child for these other mobile application channels.
With this comes marketing and advertising from
major players in the mobile space and the
opportunity to grow the mobile application market.
Stay Away Until it Matures
Alternatively, we recommend you stay on the
sidelines while the mobile application market
matures. Developing applications for any of these
platforms is still risky and each platform has a lot of
growing to do.

TIPPINGPOINT LABS
New Media Life Cycle Analysis August 6, 2009

Glossary

Terminology
Medium - A form of communication. Tippingpoint Labs focuses on New Media. Example: Blo%ing, video on
demand.

Platform - a framework for a medium’s application. Example: The iPhone is a platform for the mobile application
medium.

Channel - The service provider of a medium. Example: Scribd is a channel for document sharing.

Content - Medium expression. Example: A blog post is content delivered through the blo%ing medium.

TIPPINGPOINT LABS
New Media Life Cycle Analysis August 6, 2009

Inside This Report


Each week, the analysts at Tippingpoint Labs release a New Media
Life Cycle report designed to help marketing professionals understand Key Areas Analyzed
the new media landscape. Channel Overview
These reports use empirical data and a sound methodology to help Content Potential
ad agencies, PR firms, marketing consultants, interactive agencies and
chief marketing officers make educated and informed new media Medium Overview
decisions. Phase Analysis
Each report looks at the quality of the content on the channel, the Audience Analysis
state of the medium, an anlysis of the life cycle and the audiences
Key Forces
participating on the platform, the key forces shaping the channel, a
forecast for the channel’s future and sound content recommendations Forecast Analysis
for participating by adding value.■ Recommendations

Tippingpoint Labs
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Newton, MA 02458
Tippingpointlabs.com

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