Pre? iPhone? Android? Developers Place Bets, Take Chances

It's clear that the future of Palm rests on the Pre, as my colleague Michael Hickins noted. Much of the potential success of the Pre -- or any handset, as has been clear from Apple's wild success -- rides on the developers and companies that decide to create applications for the platform. And they are weighing a lot of factors to figure out where to focus their technical and marketing resources and what platforms to support.

The immediate reaction looking from the outside might be, "You've gotta support the iPhone." But jumping onto that bandwagon isn't a given. Intuit's GoPayment business app is currently on 13 devices -- including the Pre, but not the iPhone, though it's likely in the works. Why not the bigger name first? "A lot was due to timing and the opportunity that arise with the launch of a new platform," says Eric Kowalchyk, Intuit product manager for mobile payment solutions. Tying in to a major platform launch like the Pre offers three benefits:

• With the opportunity comes significant press attention that could not be purchased.
• The new platform offers a period of exclusivity, so Intuit knew that it could be free of competitors for a while.
• At the time of the launch, there were only about 30 apps either available or announced as coming out, according to Kowalchyk. That makes it much easier to be seen than in the virtual ocean of software tied to the iPhone.

But there were more other reasons for the choice. Intuit focused first on J2ME-based as well as ruggedized handsets first because those were the sorts of devices that their target users favored. And choosing a platform requires some complex market forecasting. Intuit had to predict traffic for this year and for next, assuming that after two years, people would switch devices. "What are the critical few platforms that are going to get me the best penetration?" Kowalchyk asks. "I'm looking at it as a per model investment."

And as Apple has also shown, understanding the dynamics of a given vendor's app store plays a critical role in marketing decisions. If it takes a week to a month to get an app approved, that increases time to market and potentially decreases total product margin. It might be that a smaller market with faster access translates into better profitability.

Zoho offers a number of apps for iPhone, Windows Mobile, Android, Symbian, and Blackberry. The company hasn't yet done a Pre version simply because the company has not received the software developer's kit (SDK) necessary to write an application. But Raju Vegesna thinks that Palm will end up with an edge in terms of ease of development because it will be like writing a web application, rather than having to learn a special version of C as development for the iPhone requires. That is simultaneously a blessing and curse.

"I expect lots of applications to come out for the Palm Pre," Vegesna says. "Then the challenge is how good are the apps? Who will control the apps? There will be a problem when there are too many apps." Given the relative ease, the Pre has the potential for even more app noise than the iPhone. "Everyone is going to write an app for palm, and the challenge is how do you maintain these apps? And I don't know if they have the infrastructure to handle all the load once they open it up publicly."

Another consideration is the differing needs of various parts of the world. "In the last two years, Apple sold 14 million units," Vegesna says. "In India, there are 8 million phones being sold every month. There are 10 million in China every month. Now look at the overall market. Nokia owns more than 70 percent of the Indian market. This is the market that these phones have not penetrated well. That is a huge opportunity. The iPhone and app store have been failures in India, because the cost has been high. In countries like India, people don't prefer the post-paid model of cell phone usage. Pre-paid is huge. And $400 to $500 for an iPhone is expensive." If the mantra of real estate is location, that of smartphone app companies will become location, location -- what platform and what country?

Palm Pre image courtesy of Palm.