Mobile applications will become critical to value, customer retention and differentiation for every industry, according to a new report by Strategy Analytics.
The company has predicted that apps will drive more than $35 billion in revenue by 2017. That figure grows exponentially when factoring in the impact apps have on purchases such as choosing one brand of car over another, purchasing app-centric toys that are often more expensive, or engaging more deeply with a company – driving trillions in value for companies, Strategy Analytics noted.
“Apps are about more than apps,” said Josh Martin, director of Apps Research at Strategy Analytics. “As the app market matures all companies must make difficult decisions about the role apps will play in their future. Should a company build their own app ecosystem? What type of return on investment model should be used? How will apps help me differentiate? These difficult questions must be addressed quickly because apps are a disruptive force for companies caught unprepared and good developers become an increasingly rare commodity.”
The market for mobile applications “has never been more dynamic and more challenging,” said Joe McGarvey, director of strategic communications for GENBAND. “There’s sort of this uneasy sea of huge opportunity, but also unprecedented challenges” for service providers, he added.
GENBAND provides solutions for IP communications, including mobile consumer and enterprise applications, and has been investing in widening its application ecosystem through partnerships with app developers for the past two years.
Service providers are looking to applications to both solidify their traditional roles in the telecom value chain as well as generate new revenues, McGarvey said. Consumer applications have had ongoing success, but mobile enterprise applications have seen slower adoption rates but are expected to see huge growth in 2013.
“Consumer apps have been there for a little while, but the enterprise apps are really, really catching on,” said Natasha Tamaskar, vice president of solutions marketing for GENBAND. “One of the reasons is, most enterprises have a workforce which wants to be mobilized.”
However, enterprise apps require higher standards for security, quality of service, and very accurate information such as presence than consumer applications.
“All those things become critical — it’s no longer ‘oops, it didn’t work.’ That’s not an option,” Tamaskar said.
Strategy Analytics see four new app-centric product categories for 2013:
- Selling new app-centric hardware, such as the Flower Power Monitor from Parrot. The small wireless sensor, introduced at CES, detects soil conditions and pushes alerts to a customer’s smartphone if, say, a plant needs to be watered.
- Differentiating product offerings like Linksys Smart WiFi Apps, which increases the value of routers through connected applications.
- Enhancing existing products, like Lego’s incorporation of apps into its Mindstorms kit.
- Branding/engagement, such as Sesame Street using a Qualcomm-powered learning application called Augmented Reality.
“The biggest thing that we’re seeing is the concept of the app as business model is changing pretty dramatically,” Martin said. Companies and brands are no longer just trying to develop, say, another blockbuster app like Angry Birds, Martin said. “They’re using apps in new and interesting ways to drive revenue, engagement, or adoption of services and products outside the app space,” he added.