End users have already shown that they're even ready to pay for mobile applications, in contrast to applications they download to their laptops. Social networking/dating site Flirtomatic, perhaps the poster child of frivolity, is stunning proof that consumers will pay -- and pay and pay and pay. "Users on the mobile Internet have a propensity to pay that runs far in excess of what users on the standard Web are willing to pay," Flirtomatic CEO Mark Curtis told me. Indeed, Flirtomatic sold five thousand virtual ice cubes (don't ask what for) last week alone.
There's as much enthusiasm for mobile applications on the enterprise side, although business users still don't use much beyond email, calendar, messaging applications, and tools for managing customer accounts, on their mobile devices. Yankee Group analyst Steve Hilton told me that most other mobile business applications are "still a little bit rough for the enterprise space... There's not the richness of the application environment that you find on PCs -- I think we're still [in the process of] getting there."
The richness is in fact there, but no one can find it. iPhone generates 65 percent of wireless data traffic despite having just a 5 percent share of the U.S. device market because it created an accessible environment for developers and consumers alike. Bill Plummer, a former Nokia executive now consulting in the mobile application space, noted that the other vendors must "make applications simple and deliverable for developers and simple and discoverable for consumers." This is why Nokia, Palm and Research in Motion will eventually link their individual app stores to portals like the ones provided by Qualcomm or wireless carriers.
Another issue holding back mobile applications is how vendors get paid. Wireless carriers force vendors to choose between charging customers directly for apps or making customers pay via their wireless accounts -- vendors can't offer both options. And if vendors let the carriers bill their customers, they have to abide by a pricing structure established by the carriers, and pay close to 30 percent in transaction fees.
Luckily for the mobile app vendors, they don't have to worry about developing different versions an app for competing devices or operating systems; other than Microsoft, all the major mobile platforms (including Nokia with Symbian, iPhone, Palm's Web OS and Google's Android) are standards-based. (As I wrote earlier, one reason AT&T is investing $100 million in the mobile application space is that it's one place where Microsoft not only doesn't have a head start, it doesn't have a seat at the table.)
Going forward, Apple, Nokia, Research in Motion and Palm will continue play important roles because apps will run on their hardware and operating systems. But the true winners will be the plethora of independent developers like William Volk, Gary Edwards and others creating applications for those stores, and beholden to none of them.
In a subsequent post, I'll explain why Google may be thwarted in its attempt to organize all the world's mobile information by wireless carriers using next-generation networks.