Whether Apple has been able to breach the high water mark it set for itself or not is quite insignificant compared to the reality that smart phones are here , delivering content to users in the way they want it and no new device is going to change that. The iPhone 4S launch marks the point where software has started taking the lead from the devices, as we have come to the situation where although the devices have their differences,  the user can still do the exact same thing on their 4S as their $100 Android handset.

Now that the hype bubble of amazing things to come has been popped we can get back to work building the best applications possible on the devices that are out there now and in peoples hands. It should be comforting to know that no matter what device you think is the best, they are all capable of delivering a highly polished and engaging medium to interact with the world.

What effect will Amazon have on revenues for Android Apps?

Is this a case of YAAS (Yet Another App Store)??

Amazon is preparing an Android Appstore. So should we roll our eyes and say “yeah yeah, one more…whatever…thanks…” ??

Absolutely NOT. There are several good reasons why this is potentially the biggest news regarding Android app sales to date.

Firstly, it must be noted, that gross Android app sales clearly lag behind iPhone app sales, despite the fact that the increasing number of Android handsets and apps on the market has levelled the playing field for 2011. It just seems that few developers are really making much cash on the Android Marketplace, for reasons that have been discussed previously such as billing issues, poor design, a proliferation of dodgy apps and a poor ratings system

Amazon will not make those mistakes. They have the clout. They know how to sell, both physical items and digital. They have a powerful recommendations, ratings and rankings system in place for eBooks. And the kicker: they have an established billing system with millions of educated, credit-card-enabled users in place from day ONE.

Sounds familiar? It should. When Apple launched their App Store the reason their paid apps flew out the door could be attributed in no small part ot the fact that they had a huge base of iTunes users already set up for micro-purchases.

Kindle Blazes a Trail

So what kind of user base does Amazon have to tap into for buying Android apps? Amazon can thank it’s Kindle here. There are probably over 5 million Kindle Device users out there of which quite a few would possess an Android device, or will in the near future. And god-knows how many Android users have already installed the Kindle Android app (it is ranked #11 on Android Market)! It took just 3 days back in early July 2010 for the Kindle Android App to go from 50,000 downloads to 250,000+ downloads. By now it would be in the millions and many of them will have set up their credit cards in Amazon’s system to enable the one-touch purchase feature.  I’m one of them – I recently made my first eBook purchase through Kindle Android (for the curious, I bought “In Pursuit of the Gene: From Darwin to DNA” by James Schwartz, for $9.99). I would guess that a Kindle user will find it extraordinarily easy to purchase apps through Amazon’s App Store.

An Appley Approach

Amazon are also taking a more Apple-like approach to determining which apps make it onto their App Store and which ones don’t, without being quite so officious about it. The focus will be on quality (i.e. the app works as stated and doesn’t crash all the time)  rather than sheer quantity and perhaps this is what Android needs? I know I know…Android is all about OPENESS!! But when OPENESS is failing to convert to REVENUE, maybe it doesn’t hurt to emulate the other guy…just a little bit.

Lessons from the eBook Market

Amazon are bringing one fairly unique aspect to their App Store: The developer doesn’t set the price, Amazon does. Some developers will find this idea a bit repellent, espcially the loss of control. But they will need to trust in Amazon’s intrinsic understanding of sales patterns. Amazon already does this price-tweaking magic in the eBooks market and it works. For developers they may make less per sale but should see more sales and greater gross revenues.

What does this mean for Google Marketplace?

Nothing really except that they are about to have some serious competition. Which is a good thing. Google are already making some long-awaited improvements to their Marketplace and hopefully in the longer run Android developers will find they can make serious revenue from BOTH channels.

QVCYUU9AXUMY

1. Windows Phone 7 will become a growing force in mobile games

   yes, we’re going out on a limb here and backing Microsoft to succeed in mobile…finally. We’ve had a good play with Windows Phone 7 and it’s pretty impressive. To be honest, it makes the Android on my Samsung Galaxy S feel a little clunky, while iOS 4 feels like last year’s pair of jeans – if you have it you probably love it, but it just isn’t that new and cool anymore. The overall penetration of Windows Phone 7 might remain low, but it will probably usher in a new level of portable games experience.

2. Nokia will claw back some market share with Meego and Qt

   Nokia will be quick to tell you that they are still the marketshare leader in smartphones. I guess it all depends on your definition of a “smartphone”. My opinion is that just because it has Symbian in it does not mean it is a smartphone by 2010 standards. Indeed Nokia have been taking a pasting from all sides and have lost great chunks of market share in advanced countries. But we reckon they are about to arrest the slide in 2011. Just like Motorola turned around their dismal handset division in the USA through the launch of Android devices, so too Nokia will turn things around (predominantly in Europe) with new Meego / Qt devices. Qt looks like a a well planned development platform and Ovi is turning out to be a very powerful app store that has defied the early criticisms. With the introduction of Meego and Qt Nokia will start looking like a handset company with a vision, rather than looking like a washed out prize-fighter clinging to the memory of victories long past.

3. RIM and Samsung’s Bada platforms will fail badly

   While Windows Phone 7 and Nokia Qt will pull in developers eager to crack new markets, Samsung’s Bada and RIM’s Blackberry 6 will fall by the wayside. Neither are bad, they just don’t have the cut through in both devices and developer interest compared to iOS, Android and Windows Phone

4. Android will introduce their own in-app billing system

   The lack of a killer billing system (both for downlaods, and in-app payments) has really held back Android revenues when compared to iPhone. Companies such as Zong and Boku launched their own in-app payment libraries for Android in June this year, but these still rely on much of the time on Premium SMS, a system that sees the carriers hoover enormous chunks of your revenue. Recently, however, Google purchased Social Gold, a well established billing and virtual currency platform. Expect an announcement in 2011 regarding an Android virtual currency and billing system that will hopefully revolutionise the way developers make revenue from the Android market.

5. Nokia’s Ovi Store will have the best payments system of any platform and show major revenue growth

   Nokia has been dealing with carriers for years. Their history in this area makes Apple and Google look like infants. In 2011 we expect Nokia to break out their in-app payments for Ovi with direct carrier billing across much of the globe.

6. It will be harder to get high quality apps for free. Revenue focus is back

   There has been an enormous explosion in the world of ‘free’ in the past few years. So much so that consumers have come to expect that they can get almost any digital product without having to pay for it. For a while it was okay for a startup to just focus on pulling in subsciber numbers: “We’ll worry about revenue later!” But times are a-changing and investment is harder to come by based solely on user numbers. We predict a return to providing high quality mobile products and services for a fee. The old saying “you get what you pay for” seems oh so true in the world of mobile so in 2011 we should start to see a weeding out of the crud.

7. App production budgets to skyrocket due to advanced platforms, fragmentation and higher consumer expectations

   Android, iPhone, iPad, Windows, Blackberry, Meego, HTML5. Tabets, Hi res, Low res, touchscreen, keypad…these are a few of our favourite things. They are also the things that can give you nightmares when taking a foray into the world of mobile. Rather than consolidating in 2010, the mobile world became ever more fragmented and competitive. The costs to hit 100% of your market are considerable, but in many cases it pays to target more than iPhone! Can you ignore the fact that Google Android ships on more devices per day than Apple’s iOS? Or that Android is now 21% of the Australian Smartphone market (courtesy IDC Q3 Mobile Device Tracker)!

   2010 was also a year of increasing app functionality – from GPS to Augmented Reality, Social Network integration to micro-payments, analytics to push notifications. Great apps often implement some or all of these things so development budgets go up accordingly.

8. Near Field Communications (NFC) to be the next big thing

   Not sure what NFC is? Read up on it. You’ll be hearing all about it in 2011.

Our new address:

248 Riley St
Surry Hills
Sydney, NSW 2010
Australia

You slave away creating your android app or game. You test it on multiple devices, polish it up and then whack it on the old Android Market and watch the good times role, yes?

Well, sometimes. But let’s assume for the moment that your app is well received and the downloads (free or paid) start rolling in. Users start posting comments and ratings out of 5 stars. If those ratings are good your downloads will probably snowball since other users will often search for apps by rating. If you’re near the top, then you will probably stay there. It’s the old “rich get richer” mechanic. HAPPY DAYS!

So a month passes and Motorola, HTC, Sony Ericsson, LG and Samsung release a bajillion new Android devices. You start seeing comments for your app on the marketplace like

Does not work on Sony Xperia X10. 1 star out of 5

or

freezes on Motorola Droid X. 1 star out of 5.

FRIKK!!!

A perfect real world example of the problem

Any developer out there knows how hard it is to keep up with the endless device releases combined with Google’s frantic releases of new Android versions. They are just not consistent and it is too expensive to keep buying each new device for testing and porting purposes. The trouble is, those bad reviews and ratings begin to kill your app’s reputation, even for the many devices that it works perfectly on! You watch as day by day those 1 out of 5 star reviews cause your rating, and subsequently your downloads, to plummet.

The Solution

The star rating system on Android Market should be a rating of how good/useful/fun/polished/ingenious an app is. Developers shouldn’t be punished for the fact that their app does not work on specific devices. Android Market should implement two measures of rating for an app:

1. a rating out of 5 with regards to how good/useful/fun/polished/ingenious the app is
2. the percentage of devices that the app works successfully on, broken down by device model. Call it a ‘reliability’ measure.

e.g.

Dave’s Combat Simulator

rating: 4.34 / 5

reliability: 68% (click for more info)

• Motorola Droid (2.1): 98% from 22,408
• HTC Dream (1.6): 92% from 2,433
• HTC Legend (2.0): 89% from 8,500
• LG GT540 (1.6): 78% from 343
• etc…
• etc…
• Motorola Droid Incredible (2.2): 0% from 91
• etc…

Some might argue that a ‘good’ app is also an app that works properly on a wide range of devices. I don’t think this is true. A good app is an app that is good/useful/fun/polished/ingenious on at least some devices and the developer shouldn’t be punished if it takes them some time to support all the newest devices on the market. I mean, the blockbuster console game  “God of War 3″ is a great game for Playstation. The fact that it does not support X-Box does not mean it is worthy of 1 star out of 5.

1. Smartphones up 8% since Feb
2. Android up from 9% to 13% of Smartphones since Feb

So, as previously predicted at Viva La Mobile, Android continues to steal market share from the other smartphone platforms. At the same time overall Smartphone numbers are growing, which points to a double gain for supporters of Android.

What does this mean?

Quite simply, supporting Android wth your

from Moconews.net

key apps has become a ‘must’ rather than a ‘maybe’.

So where is Android at in Australia now?

Certainly Australian ‘Droidiness is lagging well behind Europe and the USA where carriers have been promoting android devices like the Motorola Droid and HTC Magic for some time, not to mention selling them in large quantities. In the USA Android is the fastest growing Smartphone platform.

Android gaining at the expense of others

I think we will see a similar effect in the Australian market over the next 6 months. Telstra, Optus and Vodafone Hutchison are all launching multiple Android handsets this quarter, and it is great to see Optus advertising them (even if it neglects to mention the presence of Google’s OS at all). The variety of designs and advanced apps on offer should give consumers a welcome alternative to iPhone and provide an escape from iPhone me-too syndrome. Yes, that’s right young hipster, you can be unique again!!

My prediction: While no single handset model is likely to have the impact the iPhone has had (possibly ever), the cumulative weight of cool advanced Android devices will be far greater than iPhone in the longer term. As the Android market share rapidly grows here so will the demand for localised apps. This is where the brands and agencies of this country need to be alert and remove their iPhone blinkers. Apple now has company in Australia and ignoring that would be a mistake.

Update: some more android growth info

http://www.gizmodo.com.au/2010/03/how-the-iphone-could-end-up-in-second-place/

Interesting discussion currently going on in the cocoaheads Google group. Someone posted the excellent question: I wonder if anyone has had any experience working or getting phone apps developed by companies off shore. Are there any tips, traps or happy or sad stories etc

Personally I have always been skeptical of getting work done by an unknown team in a country such as India. While I am sure there are some excellent software companies over there, the sheer number of pundits implies that there is probably a lot of chaff surrounding the wheat, a lot of rough surrounding the diamonds, a big haystack on top of the needles….you know what I mean.

So as enticing as the bargain basement pricing might seem, is it worth it?

Here is what one reply in the Google thread said:

I’ve seen two projects outsourced to Indian software houses.

The first was a fixed price 3 month project that took 9 months to deliver. The price stayed the same, but overall the extra expense of having a full-time Tester on the job for 6 months longer ended up putting the project over budget.

The second project was various small routines and standalone applications in a larger suite. The rate was cheap – about $1000 per month. However, without exception everything they worked on had to be rewritten.

Here’s another:

the “traditional” model of off shoring to countries
such as India I have *never* seen work. Over the last 6 or so years
I’ve been personally involved in two Indian off-shored projects (both
with large, “reputable” Indian companies) and have seen another two
from outside (with friends on the project), all of them were
disasters, for various reasons. In each case, the code written in
India was thrown away & rewritten, in the last case I’ve seen, the
Indian team were simply not able to understand the problem domain.

It would be interesting to hear from those who have had good experiences where a project has been developed offshore at a discount price and delivered on time and to spec. In the mean time, in my biased opinion, I would recommend using an experienced local development studio for mobile application projects as the complexities involved may push the limits of the offshore model beyond breaking point, resulting in lost time, money and reputation.

It’s ambitious, it will be wracked with technical challenges, and it will no doubt take way longer to achieve than planned. But it has to be done. Mobile networks have watched over the last 12 months as their content revenues plunged – cannibalized by the app stores of the very handsets they are selling. The only way to combat this is to provide a rival offering that can go toe-to-toe on a global scale, and the key factor will be billing.

Billing, or inability to easily perform billing, has been a thorn in the side of developers and distributors for time immemorial (okay, 8 years or so). Apple have the strength of their iTunes platform, but the Wholesale Apps Community will have the huge advantage of direct mobile billing to billions of customers. The lure of that cannot be underestimated. And if the process by which developers will distribute their apps is made simple it will then cut out the middle-man aggregator and boost returns for the people who actually build the products. I dream of the day that I can put our multiplayer games in front of huge numbers of potental players, with on-bill micro transactions enabled across the board, and a 70%+ revenue share. Oh Happy Day!

I am cautiously optimistic that the Wholesale Apps Community will bring many millions more consumers into the world of purchasing mobile content and give developers another avenue for making a return on their hard work. I will be watching with great interest.

So, we’ve been a busy little team lately and the new website is starting to take shape for 2010. The mobile apps and games industry has changed an awful lot since we started out in 2003 and it makes sense to start discussing these changes and where things are going. Hence this blog.

What we’d like to do is to not hold back. We’d like to discuss what really is going on, who’s winning, who’s losing, what’s working and what really gets our blood boiling.

Okay…i’ll start:

Right now i’m loving Android. It’s the vibrant young prince waiting in the wings to knock off the doddering old King J2ME. It’s got style, it’s got panache, it’s fit and has the world at it’s feet. Unfortunately, just like a young prince, Android is also impatient, misguided and won’t listen to its sage advisors.

I greeted the release of the Android SDK with open arms and a cry of  “huzzah! an end to the woes of J2ME fragmentation”. Sixteen months and seven SDK versions later (count them… 1.0, 1.1, 1.5, 1.6, 2.0, 2.01, 2.1) the no-fragmentation dream seems to be in tatters. What is Google doing?!? While iPhone rips it up, releasing just one new SDK about every 18 months, Google is driving developers nuts with the constant updates, API changes and class deprecations. Combined with a distinct lack of useful documentation, I sometimes wonder if Google is having a gag at our expense over at the ‘Plex.

Our current project ran into it’s first major frag-snag when implementing an email contacts function. On 1.6 and below you use one system to get all your contacts email addresses. On 2.0 they scratched that, and replaced it with an entirely new way. That’s right, they didn’t just deprecate the old method and advise you to upgrade your code for the future. They simply removed the old way completely. Bloody hell!

Next came the multiple screen sizes. When we had 240 x 320 and 320 x 480 we were going ok. Then the Droid appeared with 480 x 854 and I started worrying that this was getting out of hand. When the Nexus One debuted with 480 x 800 I wanted to punch the little green Android mascot hard in it’s stupid smiling head. Harsh, I know, but someone please think of the developers!!

Still, despite it all, I think Android will be huge and once Google feel they have ‘got it right’ they will slow down to smell the roses and let the developers get on with the business of making great apps that can work on millions of handsets *crosses fingers*.