App Store Revenue Shows "Long Tail"

App store revenue, at least for Apple iOS and Android app stores, now shows a clear "long tail" or "Pareto" distribution. In other words, six or so apps account for about 55 percent of total application revenue (from all sources, including app sales, in-app revenue and advertising). 

Keep in mind that the iTunes App Store and Google Play now offer more than 600,000 apps each. 

Looking at app sales and in-app revenue only, and excluding ad revenue, in 2012, Flurry estimates that the top 25 apps will earn about half of total revenue.

The rest of the top 100 apps will earn about 17 percent of revenue in 2012. 

Branded Retail Stores Essential in Saturated Mobile Markets, Says Optus

Australian mobile service provider Optus now says a branded retail store strategy is more important in Australia's saturated mobile services market, and is shifting effort in that direction. 

“As the Australian mobile market matures and we move from a period of growth to one of customer retention, we need a distribution model that reflects this,” said Rohan Ganeson, Optus Optus managing director. “There is too much capacity in the mobile distribution market and we have made a decision to rationalize our third party distribution channels, while strengthening our branded Optus channels.”

Optus is opening 33 new stores as well, with a focus on customer service and education as much as sales. 

German Mobile Point of Sale Launch fo riZettle

 iZettle, the Sweden-headquartered firm that sells a dongle similar to Square, has entered the German market, working with  DZ Bank and Deutsche Telekom.

Deutsche Telekom, Europe’s largest carrier, will distribute the iZettle reader in Deutsche Telekom retail stores.

It is not immediately clear whether Telekom benefits financially in a direct sense other than earning a sales commission for each device sold, though iZettle obviously increases the value of a connected tablet or smart phone, and thereby offers an indirect driver of mobile subscriptions for Deutsche Telekom. 

The service was first launched in the summer of 2011 in Sweden, and now individuals and small businesses is in Sweden, Norway, Denmark, Finland and the United Kingdom.

“The cooperation with iZettle is a further step for Deutsche Telekom to strengthen the relevance of mobile payments in Germany and to position itself as a relevant player in the payment market, said Thomas Kiessling, Chief Products and Innovation Officer at Deutsche Telekom.

Equens, a joint venture of DZ BANK with other major European banks, will process iZettle payments in Germany. Starting in November, the iZettle solution will be available at selected Volksbanken Raiffeisenbanken.

Frontier Communications Lends Name to Retail Energy Services

Frontier Communications Corporation has lent its name to "FTR Energy Services," as part of a marketing agreement with Crius Energy. That doesn't mean Frontier Communications is "getting into the business of retailing energy services." 

It means Frontier is lending its name and marketing muscle, presumably, to a third party affiliate that will sell "clean energy" including electricity and natural gas to customers. 

FTR Energy Services is a wholly-owned subsidiary of Crius Energy and will launch in select markets in November 2012. 

The company will initially provide 100-percent "green electricity" to customers in New York and Ohio, and clean-burning natural gas to customers in Indiana.

Some will be glad to hear that Frontier has not made a direct effort to add energy retailing to its triple play or quad play offers. At various times over the last couple of decades, telecom service providers have dabbled with the notion of adding energy services to the retail menu, as some also had dabbled at home security.

Financial results have been quite mixed. None of that is stopping cable companies and telcos from taking another look at home security, particularly as broadband access, smart phones, tablets and video now offer opportunities not available before. 

The historic problem with energy services is the low profit margin. Traditionally, a service provider would wholesale capacity from a utility, then offer a discount to consumers. The problem always has been the thin profit margins. 

So some will be happy Frontier has not gotten enamored of that approach. Instead, it simply seems to be testing a way of earning a bit of incremental revenue from a marketing partnership. 

The more lucrative opportunity might arise from selling automated meter reading or energy management services to firms such as Crius, at some point. 

Games Lead App Usage on Both Smart Phones and Tablets

General patterns of smart phone use, across a typical day, resemble the usage pattern for tablets, according to Flurry, with one salient exception: tablets are used less than smart phones during the workday, and more than smart phones during the evening hours, Flurry says.

At a high level, consumers spend more time using tablets for media and entertainment, including games (67 percent), entertainment (nine percent) and news (two percent) categories which account for nearly 80 percent of consumption on tablets.  

Smart phones claim a higher proportion of communication and task-oriented activities such as social networking (24 percent), utilities (17 percent), health and fitness (three percent) and lifestyle (three percent), representing nearly half of all usage on smart phones.  

Games are the most popular category on both form factors with 67 percent of time spent using games on tablets and 39 percent of time spent using games on smart phones.  

Consumers also spend 71 percent more of their time using games on tablets they spend doing so on smart phones.

France Wants Google to Pay for Links to News Stories

President Francois Hollande told Google CEO Eric Schmidt that France would pass legislation to force Google o pay for displaying links to news articles unless it struck a deal with French media outlets providing those entities payment for linking, essentially. Google obviously doesn't agree with the policy. 

Press associations in France and other European countries want Google to pay when it displays links to newspapers in Internet search results. 

The tussle isn't new. Owners of copyrighted material, especially those losing revenue and relevance to online media, obviously would prefer to be paid by search engine application providers. That revenue would help offset revenue losses in other areas, including subscriber fees and advertising. 

Google, of course, prefers to argue it merely is indexing and "pointing users to" such sites. Owners of newspaper or magazine sites are free to put their content behind a "pay wall," of course. 

It is reminiscent of the imilar friction between Internet service providers and third party applications that are delivered over Internet service provider networks. In the end, it's all about the money. 

Google says they send four billion clicks per month to publishers and one billion of those clicks come from Google News. Google News is free, there are no ads on Google News, but yet Google has an AdSense program that paid out over $6.5 billion to U.S. publishers from in 2011. 

French news publishers obviously feel otherwise.

What Will "Nomadic Web" Mean?

If we are entering the era of the nomadic Web, a major question still remains: will most of the content, interactions, and organizing principles of the wired Web simply migrate to the wireless world? 

Even if the answer is, for the most part, yes, the speed of this transformation and the route it will take are far from certain, McKinsey analysts say. 

The fates of many leading stakeholders could be affected, for better or worse. The reason Google, Apple, Yahoo, Amazon, Facebook and many other application providers are racing to secure a foothold in mobile apps is that it is not certain PC-based business models are completely transferable to the mobile domain. 

Looking just at advertising, display advertising, a mainstay of the PC web, does not translate very well to smaller screen smart phones, and requires some reworking for tablets that do not support the traditional "keyboard and mouse" interface.

Also, tablets are not used for the same reasons, or at the same places, as PCs and notebooks have been used. 

"Location," directions and other attributes of the "out and about" nomadic web likewise are different from traditional "search" and "information requests" typical of the desktop web. There is a greater commercial angle, for example, as people more often are looking for something to buy now, someplace to go, right now or someplace to go soon. 

Nor is it clear how consumer use of access networks might change, from fully mobile to untethered. There will be some consumers who might find that mobile broadband, possibly using personal hotspot features, are suitable replacements for fixed network access.

Also, though the typical assumption is that bandwidth consumption only increases over time, the nomadic web could change those expectations. In terms of raw data consumption, 90 percent of people trolling the mobile Web use fewer than two gigabytes a month.

If people begin to rely on mobile web for most of what they do on the web, that could dramatically change expectations about bandwidth growth. To be sure, there are lots of reasons for consumers to use fixed connections. 

But Austria, though an exception to the current rule, already features more people using the mobile web than fixed connections to the web. Access aside, the design and use of applications in a nomadic context is different from apps used in a PC mode.