$17.5 Mobile App Sales in 2012

Mobile App Stores: A Closer Look from Plugg Conference on Vimeo.

A study conducted by mobile analyst Chetan Sharma and sponsored by GetJar suggests the market for paid mobile apps should grow to $17.5 billion within the next three years, implying a value greater than CD-based apps in 2012, when apps sold on physical media are projected to be $13.8 billion.

App downloads will leap from slightly more than seven billion in 2009 to nearly 50 billion in 2012, representing an annual growth rate of 92 percent, the study also suggests.

According to the study, by 2012, off-deck paid-for apps will be the biggest revenue generator, accounting for almost 50 per cent of all apps revenue.

In 2009, on-deck apps available from mobile operators accounted for over 60 percent of all apps revenue, but this will fall significantly to just under 23 percent by 2012.

The average app selling price for apps in North America was $1.09, significantly higher compared to that in developing markets such as South America ($0.20) and Asia ($0.10).

According to the study, revenue opportunities in Europe are set to grow from $1.5 billion in 2009 to $8.5 billion in 2012, while in North America the figure will rise from around $2.1 billion to around $6.7 billion in 2012.

Currently, apps are most popular in Asia, with the region accounting for 37 percent of global downloads (free and paid) in 2009. North American downloaders spend the most money on apps, accounting for over 50 percent of global app revenue.

Advertising and transactions are a growing portion of the way applications are monetized, though purchase fees will represent most of the revenue for the near term.

Recession Not the Issue, Structural Is What Challenges Telcos

The global telecom industry performed pretty much as it always does during the recent recession. Basically, revenue growth continued at low single digits, overall. As always is the case, some industry segments fared better than others, but consumer demand for communications and entertainment video services was steady.

Some might wonder whether some clear signs of consumer frugality will affect growth rates for some time to come, but even that is not the big issue.

The big issue is that wired communications is an industry with a cost structure too high for expected revenues over time, so cost cutting must continue and network operations must become even more efficient than they have, up to this point.

Ovum researchers point out that "the economic downturn hasn’t resulted in the downward pressure on telco top lines that many expected."

But Ovum researchers also point out that "revenue growth is in decline for many mature market operators, and slowing for those in emerging markets."

“Market saturation, increased competition and regulatory intervention on roaming and termination rates won’t disappear just because the economy picks up”, says Ovum Principal Analyst Clare McCarthy.

Telcos are cutting operating expenses and capital investment. They are also accelerating employee early retirement programs and stockpiling cash. Many telcos in fact are emerging from the downturn with healthier balance sheets than when they entered, as well as significant cash balances, Ovum says.

Covad Launches Ethernet Access Services Nationwide

Covad Communications Company is launching nationwide Ethernet access services in mid-April.

Designed especially to support business-class, real-time applications like Voice over IP, video, gaming, virtual private networks and video conferencing, at speeds from 1.5 Mbps to 35 Mbps out of more than 4,000 central offices reaching approximately 10 million businesses nationwide, the company says.

Covad will offer quality of service and class of service features and are backed by service level agreements.

“What will differentiate this product in the market are the integrated QoS and CoS options that give our partners immense flexibility in optimizing network performance based on their application requirements,” says Patrick Bennett, president and chief executive officer at Covad.

Covad began testing Ethernet services on a technical level with a limited offering in selected markets last year.

Buy Your Bandwidth When You Buy Your App

As the mobile industry starts selling more connections to support sensor networks and non-traditional mobile devices such as game players and media players, it is going to create new charging methods as well.

The Kindle, for example, hides the cost of connectivity in the sales price of content. That model likely will become more popular over time as more devices emerge that require occasional connectivity, but are unsuited to the traditional monthly or prepaid billing plans.

At the same time, assuming regulators do not outlaw the concept under the guise of "network neutrality," more operators may start experimenting with priority access and other quality of experience measure.

3UK, for example, gives users on  more-expensive plans access priority access when the network gets congested. Tiered service levels are one obvious way to allow users to match their preferences with their payment plans.

Application stores might offer another approach that is akin to the way Kindle now works. It might be the case in the future that some applications are sold in a way that incorporates the cost of bandwidth in the sales price of the software.

Some users will want to pay less, and take their chances with  YouTube viewing quality. Alternatively, a user might be able to buy a service that includes quality of service mechanisms for YouTube consumption.

In principle, that isn't much different from selling access plans offering varying bandwidth at varying prices, or different buckets of voice minutes of use or text messages or data consumption. The concept might be especially attractive for users at two ends of the usage spectrum.

Very-light users might prefer the lower overall cost of paying for just enough bandwidth to support their use of particular applications. "Power" or business users might be willing to pay much for the best possible quality for business conferencing or voice quality, especially when the network is congested.

Yes, that is a combination of network management and bit discrimination. But there is no good end-user focused reason to give consumers a choice of consumption options.

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Augmented Reality Projects Web Data Onto the Real World

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Augmented reality overlays information from the Web on top of objects in the real world, typically when a user points a mobile phone camera at objects in the real world. In some sense, augmented realtiy takes Web accessible data and projects it in real time onto physical objects viewed by the camera. 

There are all sorts of prosaic applications one can imagine. Helping people buy shoes and clothing is an obvious commercial example. 

No Way to Predict Hot Apps, Gadgets of 2020, Experts Say

Technology experts surveyed by the Pew Internet & American Life Project overwhelmingly agree that the killer applications and gadgets of 2020 can not be foreseen right now. About 80 percent of respondents said the killer apps of 2020 will "come out of the blue" and will not have been anticipated.

For all the scenaio planning, brainstorming and research firms conduct and pay for, that is a rather surprising opinion. Essentially, most technology observers and technologists say we have no way of predicting what will be hot in 2020. That will not stop firms from creating product roadmaps and investing where they think the opportunities are greatest.

Despite all that, we still are likely to be surprised in 2020. In 2000, nobody would have predicted the iPhone, or perhaps have bet that Apple would be a bigger company than Microsoft. The first is fact, the second "only" a directional trend. Microsoft today still is a bigger company than Apple, at least in terms of market value. But the charts suggest Apple will overtake Microsoft.

How many forecasters would have predicted that?

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Bing Maps Augmented Reality Demo

I admit I use Google Chrome and Firefox more than I use Explorer and Bing. I use Google Maps; I don't use Bing Maps. But that doesn't mean Microsoft engineers are not working on new tweaks to provide more value for Bing and its related apps.