The Smartphone applications market is skyrocketing: While operators recorded 3% global profit in 2009, the application market is on track to reach 17 billion Euros in 2012, versus 4 billion in 2009 (with already some 7 billion application downloads). This means a growth of about 50% during the first quarter of 2010, according to Gartner.
Definitions:
Smartphone: "A Smartphone is a mobile phone that offers more advanced computing ability and connectivity than a contemporary basic 'feature phone'. Smartphones and feature phones may be thought of as handheld computers integrated within a mobile telephone". "Smart phones run complete operating system software providing a platform for application developers."
Applications: "Application software, also known as an application, is computer software designed to help the user to perform singular or multiple related specific tasks."
We can also highlight that a Key Success Factor of Apple is its ability to go beyond the needs of consumers and to make its innovation accessible to them. Moreover, its strategy is very strong. Indeed, in 2007, Apple launched the iPhone. It belongs to the Smartphone category, that means a mobile phone offering advanced computing abilities. It's like a small computer combined with a phone. Recently, the number of application integrated on it has increased. Indeed, we can count more than 225,000 applications available today and this number doesn't seem to stop growing.
However, the Smartphone was not invented by Apple as we will explain in part B. Apple introduced the iPhone on the market quite late compared to the other mobile suppliers: so, how did the iPhone succeed that well ?
The iPhone has two main strengths:
- The simplicity to use (thanks to the touchscreen) and to access things (applications makes everything clear and reachable)
- The mobility. You can access the internet wherever, whenever, you can utilize GPS, etc.
The difference between the iPhone and other Smartphones are the AppStore and the numerous applications. In fact, when Apple began to attack this new market, it created a tool to overpass other suppliers: the AppStore. In July 2008, it became possible to buy applications for the iPhone from the Apple Store. It was a spectacular success. Indeed, in one month, 60 million applications were sold which represent $1 million per day on average! In 2009, 5 billion applications had been downloaded and the company forecasts around 12 billion in 2012.
[...] Market segmenting: 80% of Lacoste's clients are male, who are the main users of iPhones; the Lacoste application was designed for them. Niche strategy: music companies design professional applications for sound engineers and musicians to use iPhones as studio equipment. Image: some applications rely on controversy, sometimes getting banned by platforms (violent games, erotic applications banned by Apple). Potential In slightly more than a year, this market has become extremely wide: 140,000 applications were counted for the iPhone alone in spring 2010. [...]
[...] The difference between the iPhone and other Smartphones are the AppStore and the numerous applications. In fact, when Apple began to attack this new market, it created a tool to overpass other suppliers: the AppStore. In July 2008, it became possible to buy applications for the iPhone from the Apple Store. It was a spectacular success. Indeed, in one month million applications were sold which represent million per day on average! In billion applications had been downloaded and the company forecasts around 12 billion in 2012. [...]
[...] And it has to use its advantage of global reach to gain market shares all around the world instead of losing clients and facing losses, as has been happening this year. Samsung offers 1100 apps for mobile and TV use, and boast 10 million downloads in 34 European countries. Samsung focuses on local apps to adapt to national specificities, and proposes promotions to boost downloads: once a month, customers are invited to download a specific app for Users need the Samsung Kies software to access the store, so they can, for instance, download the Samsung browser “EasySurf” application. [...]
[...] So, they can decide to stop creating applications for iPhones and go to the Android market instead. So, since September 2010, Apple has promised to be more transparent with its developers: - More clear criteria of selection for the AppStore - More freedom to develop its application with iOS and other softwares Why does Apple do that? - To avoid losing its developers who will prefer the freedom of the Android market Other brands: Nokia, Google, BlackBerry, Windows (Samsung) 1. [...]
[...] II/ Strategic Opportunities that go beyond telecommunication firms The market created by these applications offers significant strategic opportunities to companies of all types. Focus on BtoB : M-Commerce booming First is a B2B use of applications: companies design their own applications (or use third party applications) to improve their effectiveness. It ranges from Fnac enabling its salesmen to scan bar codes with their iPhones, to classic agenda/organizer applications that can be used by any worker. But we chose to focus on a second use of application, more B2C oriented. [...]
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