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why is app pricing so elastic?

2013-04-02T16:56:27Z

At the end of January, Distimo released a report which I suspect many app developers found disturbing. Backed with substantial data and analysis, the report demonstrated that drops in app pricing resulted in substantial boosts in downloads. We're not talking a small jump here:

"When the price drops for iPhone apps, on average, cumulative downloads grow by 1,665 percent for five days following the decrease."

1,665%? That is a remarkable increase. (Fascinatingly, the comparable boost for iPad downloads is a mere 871%, which Distimo attributes to the higher price of iPads, and an associated lower price elasticity.)

Are app developers rapidly headed toward the problems of content creators, who can't seem to get paid for their work?

Apple: is being a great curator enough? (part II)

2013-01-08T20:05:00Z

Yesterday I wrote about the growing parity between iOS and Android. Summarizing where I think we are currently, and the key question to ask of Apple:

If most major points of differentiation are erased;
the cost of Android devices is lower;
the selection of Android devices is much broader; and
sales channel loyalty is somewhere between neutral and favorable to Android,

...how does Apple sustain market share?

Apple's profits are driven by device sales. The world is moving to the cloud, as Amazon and Google knew years ago. Devices are necessary as smooth portals to services and data in that cloud, but device margin is not the sustaining business opportunity.

The competition will therefore be fought on "curated experiences"--who can most successfully integrate a solution which combines device, user interface, and cloud data storage / services?

When the business opportunity is phrased this way, things look better--but not great--for Apple. They historically have not built particularly good software (tried the new iTunes yet?), and they have almost no foothold in services (no, Maps doesn't count, and MobileMe is dead).

But Apple makes gorgeous hardware and does transcendant UI design, which continues to captivate consumers. My thinking is that this simply doesn't add up to the market share they currently enjoy.

In fact, this sounds ever more like the desktop / laptop business strategy they have now. The problem is that OS X has roughly 10% market share. Where will iOS settle?

Apple: is being a great curator enough? (Part I)

2013-01-07T23:40:00Z

Fascinating data from Kantar came out yesterday, in which their analysis says that iOS not only halted its decline, but raised its sales share to 53.3% in 2012 vs. Android's 41.9% (a 10.9% YOY decline).

I would not have predicted this, especially given my experience on Android over the past four months. I'm inclined to believe the theory that this is simply the result of Q4 iPhone 5 sales rather than any indicator of a long-term trend. Why am I skeptical?

LATE ADOPTION TO ANDROID PAYS OFF - PART II

2012-11-27T16:59:00Z

Last week I wrote about my disappointment in Android--specifically why, as an early adopter, I resisted the siren call of the OS.

As 2012 ticks by, big changes are happening for Android, and they are called Google, Amazon and Samsung. As a consequence of these changes, I set my iPhone down and bought a Samsung Galaxy S3. To summarize the rest of this post: I’m not going back.

Late Adoption to Android Pays Off - Part I

2012-11-20T23:12:00Z

I can say with equal parts pride and embarrassment that I am an early adopter across a range of technologies. Some of this is driven by passion for technology; some is driven by professional interest; some is driven by my impatience for my gadgets to do what I want them to do. (Here’s where I insert a plug for my friend Daniel Wilson’s book “Where’s My Jetpack?”). I’m here to tell you it’s finally time to try Android.

shopping for mobile broadband?

2012-04-03T21:13:07Z

I occasionally add consumer advice to this blog, which I freely admit is driven either by my own shopping experiences, or by a request for advice from a friend or family member. I wouldn't want you to confuse this with actual market research, and it is, by its nature, relevant only in the U.S. marketplace. My family took a two-week roadtrip at the end of March through the American Southwest. Some of my consulting responsibilities required me to check in during that period, and my laptop was my preferred device. I don't require a mobile broadband card often enough to justify the expense but needed one for this trip.

smartphone economics: ouch!

2012-03-28T20:55:46Z

Fascinating analysis in CNET today of the PwC report on the increasing difficulties of wireless operators. The short version, for those in a hurry, is that the subsidy cost associated with smartphones is expensive and increasing (for those countries where subsidy is relevant). The hope was that the incresed subsidies would lead to more customer growth (initially true for AT&T after the launch of the iPhone) and increased revenues by virtue of add-on data plans.

One didn't have to wait long to see AT&T as a victim of its own success; the impact of iPhone data traffic on AT&T's networks and the associated dive in customer satisfaction are unknown to no one. What is more unsettling is the continuing downward spiral of smartphone economics. The situation is becoming some combination of network effect and vicious circle.

wrapping up a project

2012-03-07T20:04:37Z

I just wrapped up a 15-month project for Dolby Laboratories (thank you, Dolby!) and wanted to jot down (non-confidential) thoughts about how the project unfolded. It turned into one of the most interesting engagements--"regular" job or consulting project--I've ever done.

Apple: success and obligation

2012-01-23T04:03:03Z

The recent publicity surrounding Foxconn's factory and worker conditions has Apple on the defensive, and consumers puzzled by the disturbing reports. Does Apple deserve the negative attention? Unfortunately, thanks to emotive marketing, the answer appears to be "yes".

competing for smartphone OS market share

2011-05-04T01:30:00Z

In my last post I discussed the stunning ascension of Android. The mobile OS has passed all competitors (including Apple) in the United States, and is on track to be the number two mobile OS in the world by the end of the year.

Of course this is not a winner-takes-all market....