App Economy

Mobile Marketing and Strategy by Josef Mayerhofer

Category: Strategy

The F2P Funnel

Sorry, this entry is only available in Deutsch.

Freemium what is that? – A history of the greedy gifting

Sorry, this entry is only available in Deutsch.

Copied again: Growl vs Apple Notifications in Mountain Lion

Unfortunately, it has almost become the rule: Every Apple software unveiling has a more or less bitter taste for indie developers.

Yesterday without much fanfare OS X Mountain Lion was presented to us, and it contains many nice new features. Most of the features such as notifications we already know from iOS. However these notifications strongly remind of the ones you find in Growl, an open source notification system for Mac OS. At least that’s how John Gruber (daring fireball) sees it. The tool has been around for more than seven years and to much regret took the step from freeware app to paid App Store offering. Loyal fans (like me) of course, have no problem to support the project around Christopher Forsythe with 1.99$.

Growls benefits have since been discovered by other developers and borrowed for their own apps. Since version 5 Skype users can choose between the built-in “Visual Notifications” and Growl who previously had to use the definitely Growl. This summer OS X Mountain Lion will be offering notifications that fade in and out the upper right corner and then disappear again. Hello Growl.
grow vs. notification center comparison

grow vs notification apple comparison

Growl notifications on the left and Apple's new notifications right

Apple uses the ideas and concepts of the developers that already put their creative energy to benefit Apple far too frequently. At the presentation of iOS5 this was particularly obvious and I was not the only one pointing out cases like that of WhatsApp vs. iMessage. Another example is Delicious Library. Wil Shipley’s jaw dropped when he saw the Apple Keynote in January 2010 when he saw the interface of the newly released iBooks app.

Apple bedient sich viel zu häfig der Ideen und Konzepte der Entwickler die Ihre kreative Energie ohnehin schon zu Apples Nutzen einsetzen. Bei der Vostellelung von iOS5 war dies besonders offensichtlich und ich war nicht der einzige der über Fälle wie den von Whatsapp vs. iMessage berichtet hat. Ein anderes Beispiel ist Delicious Library. Wil Shipley fiel die Kinnlade herunter als er bei der Apple Keynote im Januar 2010 die Oberfläche der neu vorgestellten iBooks-App zu sehen bekam.

“I guess it’s not enough Apple has hired every employee who worked on Delicious Library, they also had to copy my product’s look. Flattery?”

Later, in an interview with TechCrunch he seemed disenchanted:

“Now, of course Apple couldn’t contact me ahead of time and say, ‘Hey, we’re taking your idea, thanks.’ Their lawyers would worry they’d open themselves to a huge lawsuit, for one, and they’d also be leaking a secret. Nor could they write me a check. Even a token one would be an admission (in their lawyers’ eyes) that they were copying something. They are a public company — they can’t write someone a check unless they got some value in return. And if they got value, the lawyers would ask, how much was it? How was it determined?,”

At least he can be proud of his work:

“My designs are my children. … But your children aren’t really yours. They have lives of their own. So when your designs do change the world, you have to accept it. You have to say, ‘Ok, this was such a good idea, other people took it and ran with it. I win.’”

It almost looks as if the Growl team would have to grow similar attitude. Because lock-in effects are much weaker in Growl, than in WhatsApp Messenger. And for the developer community we can only hope that public pressure will bring Apple to start to pay royalties but for others’ ideas.

Success through a Small Target Audience: Specialize your App!

Your app does not have to appeal to everybody. Just everybody from your target group. Define the target audience so precisely you won’t find it difficult to tailor a perfect app to their needs. Continue reading

Distimo: If you’re serious about developing, get a tool.

Distimo, an app store analytics company founded just a little more than two years ago has since become a big player in the app store economy. I talked with analyst Gert Jan Spriensma about their new benchmarking tool and learned that the Amazon Appstore’s sales numbers are still snippy in comparison to what the Android Market has got going.

Continue reading

WhatsApp-David vs. iMessage-Goliath


After Apple released a number of new IOS features at the WWDC in early June that one might have seen before in the occasional app here or there, a more or less perceivable outcry went through the blogs of Apple followers and developers.
“The SMS is dead!” I read everywhere. iMessage, a built-in iPhone-to-iPhone chat client is to revolutionize our way of using SMS. Great, because I always found writing text messages annoying!
What I did not reat in all the (exaggerated) excitement: What does this new expansion mean for existing apps like the WhatsApp Messenger ?
Granted, WhatsApp did not invent instant messaging, but the app certainly was a pioneer. For the first time we did not have to laboriously enter contact information on the phone to start a chat. And by now WhatsApp is available for various platforms, which makes it athe full SMS/MMS/IM replacement for many.
Exactly this is what could save WhatsApp’s head. WhatsApp has a significant first-mover advantage and was able to mobilize around 15 million users since publication in June 2009. A user base, which will still be impressive when Apple creates millions of iMessage users this fall.

whatsapp-vs-imessage Screenshots

Screenshots: Whatsapp (left) and iMessage (right)

WhatsApp users benefit from network effects: The more of their friends use the app, the better for every user. In this context we also speak of positive feedback: Each additional user increases the likelihood of WhatsApp to attract more users. In extreme cases, so many that the market is dominated by one software product from one company. Microsoft comes to mind. A good example, whose story I will analyze in a later blog post.
That’s the theory. But shouldn’t we just have come to the point where the bosses of WhatsApp pee their pants? Yes and no.
The boys and girls from WhatsApp have demonstrated far-sightedness some time ago and have made the app avaliable for Symbian, Blackberry and Android. And even better, the app is initially free for those platforms. After the first year users have to pay two dollars in annual fees. Also very smart, because after a year of intensive use a strong lock-in effect develops. Switching of the chat app costs money even if they only consist in the cost of lost comfort. WhatsApp can thus generate a cash flow over several years instead of a single payment and multiply their revenue.

The multi-platform strategy will help WhatsApp enormously after the introduction of iMessage. Most of us don’t just have iPhone acquaintances. (To be honest, most of my friends either do not a smartphone or are either unable or unwilling to install a chat app.) Of course Apple has zero interest allowing chats between iPhone and the Blackberry IM app “BBM”. After all, customers shall be bound to their platform, and if possible even convince friends to switch. Which brings us back to network effects.
WhatsApp’s competitive advantage is the far greater potential reach across multiple operating systems. I guess they stand good chances that the decline of revenue this fall will be limitied. Most certainly it would be a good David vs. Goliath success story.



Images: Gustave Doré, Vincent Benedict Castro, Ablo Herrero Isasi

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