Mobile Web and Mobile Apps Monetization Strategies

Faced with a prevailing culture where consumers expect web services and digital content to be free, mobile app and mobile web developers need to adopt the right strategy in order to monetize their efforts.

The Freemium model is a classic marketing tool available to mobile app developers to maintain the perception of a free service, while attempting to lock-in customers into some type of charging mechanism. (And I recommend reading Chris Anderson's 'Free: The Future of a Radical Price' book for further insights into this).

But many of the decisions around charging will stem from a look at the value that the mobile consumer perceives he/she is getting from the app in question. Apps with a low perceived value will struggle to charge anything at all, no matter the charging mechanism.

I presented a basic introduction to monetization of mobile apps to the EAE Business School this week. This intro is based on a wider discussion included in the chapter of the same name in my new book on Location Based Services (for early access to the book, click here). In the same chapter, I include a toolkit for deciding how and what to charge for mobile apps and present some success examples of companies that cracked the key to generating recurring revenues.

I took a quick survey of the class (highly educated, international, 20-25 year olds) to see how many had smartphones and what type. About 25% had a smartphone, equally split between iphone and Blackberry. 0% had an Android device (which goes to show that Android still has some way to go in Europe...)

As part of the Q&A, one of the questions that struck me the most was along these lines:

"We hear a lot about mobile apps and the gold rush taking place, but is any app developer actually turning a profit from this activity?"

The answer is, of course, yes, though only those developers with the right combination of an attractive value proposition and the right charging mechanisms are able to succeed in an increasingly crowded marketplace. The potential, with 500+ million apps downloaded to date from the iTunes Store, remains huge. But it pays to have the right monetization strategy in place.

You can see the presentation below:

Mobile Web Monetization Strategy

View more presentations from Ric Ferraro.

Start-up Funding in times of crisis

As a follow on to the previous post on 'V is for Vulture Capital', here is a short article I submitted to a local business magazine about funding start-ups in times of crisis, based on personal experience in Europe.

"Whether in a boom or bust part of the economic cycle, obtaining funding carries a health warning for innovative start-ups. It can involve an enormous amount of effort for little (or no) return. This is particularly the case when seeking Venture Capital.

The matching of VC funds to start-ups is an imperfect market. The money will not flow to innovative start-ups unless they have the potential of being ‘the next Netscape’ –no matter how world-changing their inventions are.

Plus, there is the funding paradox –it is easier to obtain €20 million of VC money than €1 million. Many VCs will not even look at making investments below €5 million.

In Europe, we still witness a ‘funding gap’ left by Business Angel investment and VC investment. Few investors feel confident enough to sit in between the two and pump in investment amounts of under €1 million. This forces many European start-ups to grow organically and limit international expansion –allowing competitors from outside Europe to catch up all too quickly.

In times of crisis, the funding gap is compounded by the banking sector tightening the screws on their lending procedures. Without the ability to fund working capital using bank overdrafts, loans and credit lines, a larger number of start-ups seek private investment to prop up their balance sheets. As cash is king, these private investors will in turn limit their investments to those start-ups which are themselves cash generating. This compounds the problem and creates a financing vicious circle that is difficult to break unless economic growth resumes."

Foursquare vs Gowalla -the battle of the check-in at SXSW ( a video comparison)

AUSTIN- SXSW has come and gone, but it has left an important mark on the social networking scene by making location-aware apps core to the participants' experience of the event.

It also raised the profile of the location 'check-in' feature, as popular Location Based Social Networks like Gowalla and Foursquare competed for the hearts and minds of those present at SXSW.Google's VP of Geo Products, John Hanke, said:

"the check-in had energized the conference."

Who was the winner of the ' mobile check-in' at SXSW, then? Apparently, there wasn't one, though this video produced by SimpleGeo gives you a good feel of how the different services were used (thanks to Troy for bringing this to my attention).

SXSW Interactive Checkin Visualization from SimpleGeo Inc. on Vimeo.

HTML5 on iPhone and Offline Web Apps

Making iPhone Web Apps continue to run after they went offline used to be an uphill struggle. However, with the specification of up-and-coming HTML5, you can now load a web app just once and then let it run offline. All this, without a need for a continuous internet connection, giving it the feel of a locally installed native iPhone app.

In his recent post on Mobiforge, Wei-Meng Lee explains how to use Dashcode to write offline iPhone web apps. His article gives you a great step-by-step explanation, from the Configuration of Apache for Web Publishing to Session- and Client-side Storage.

If you are about to develop an app with offline mode, I recommend you read through Wei-Meng's article for further insights. You can find it by clicking here.

Apple to launch iCar Prototype with total customisation through App Store

It was only a question of time till Apple decided to venture into new segments by extending its powerful branding franchise. Swiss-watch maker Swatch was the first to foray into the car sector with its successful Smart car model joint venture with Mercedes. Now Apple is looking to replicate this success with its own vision of an 'iCar', combining the latest clean fuel technology with its famous App Store concept.

Full details haven't been revealed, but official sources close to the company state that the iCar will 'integrate Apple's leading iTunes app download technology to provide customisation capabilities never seen before in a car model'.

What this means is that buyers of the iCar will be able to download the entire car specification options one-by-one from a special iCar App Store -from the accelerator display app, to the colour scheme app, rearview camera app etc, effectively 'building' their own electronic display features from scratch. Needless to say, the iCar will come with a WiFi booster, 6-speaker stereo and 9-inch screen and iPad/iPhone dock to also benefit from all the communication and multimedia features loved by Apple fans worldwide.