Enterprise Mobility & Connected Devices Blog

In-app Purchases and Subscriptions – an "old" Concept that's "new" for Mobile Platforms

Both RIM and Google revealed some enhancements to their respective app stores last week— the enhancements of the two companies were largely centered on in-app payment functionality. Google announced that it has added the ability to send downloaded Android apps to your phone via a browser, and also teased some of the new functionality being offered in their tablet-specific 3.0 Android release (which incidentally, was featured in a Super bowl advertisement for Motorola’s new Xoom tablet).

RIM's Blackberry App World update aims to spur developer interest into producing more consumer-oriented applications for the Blackberry market, as BlackBerry developers have been turning their focus to either iOS, Android or both— the lack of an in-app payment platform for BlackBerry apps was viewed as an impediment to monetizing their otherwise free offerings. This being said, App World 2.1 will allow developers to add and charge for additional content, using the payment service SDK. Blackberry developers can also register and manage virtual goods and use built-in reporting functionality to track purchases and payments for their apps and in-app features. While RIM is "late" in enabling these features, the move puts them on par with the competition (Google's update to its SDK, which will enable in-app purchases, will become available by the end of Q1). Making app discovery and purchases on their respective platforms “easy as iOS” is required, and these are steps in the right direction.

However, RIM (like Google, Nokia, and Microsoft) is fighting for developer mindshare, and the update to Blackberry App World can help, as it will spur developer interest into producing more  apps for the Blackberry market (as of late, BlackBerry developers have been turning their focus to either the iOS,  Android platforms, or both).
I'm sure you may have noticed that I only mentioned "consumer-oriented applications" in the prior paragraph— this is the primary goal not only for RIM, but for all mobile handset OEMs, as this is "where" the vast majority of developers are (and where a good portion of the money is). My point being, for a handset OEM to find its way into the workplace, satisfying the needs of a consumer is mandatory (beyond look/styling, having a strong roster of apps— in depth and breadth). With Smartphone usage continuing to expand, a part of the everyday work challenge for all mobile device manufacturers will be positioning their "kit" for both corporate/business environments and for everyday use— we're all "consumers" when we leave the office; while carrying a "personal" and "work" phone is common, it is neither ideal nor efficient.

And Apple?

In addition to the App store announcements, a news application specifically designed for the iPad (The Daily) debuted last week— not coincidently, it is being widely speculated that the next iOS update (4.3) will also feature in-app subscription (Per appletell.com): 

John Gruber’s review of the Verizon iPhone contains a decent guess as to what Apple has planned in terms of iOS 4.3. It goes like this: The Daily was just released and has a two week free period that’s being sponsored by Verizon. After this period, you’ll need to start paying, but so far, you can’t. Why? iOS 4.2.1 can’t handle in-app subscriptions. That means Apple almost certainly will release iOS 4.3 within two weeks of the launch of The Daily so that everyone’s money can come pouring in. John admits this is just a guess, but it’s only logical.

So, we definitely have a theme. Bottom line, differentiation continues to be key moving forward, and what is compelling about the rapidly evolving application discovery and purchasing models is the business applications. Sure, providing IT organizations with the means to efficiently distribute and manage corporate software enterprise-wide on mobile platforms is very important as well, but alongside this, providing the appropriate mobile apps that can help employees more effectively solve customer problems and complete their day-to- day tasks while taking advantage of the real-time capabilities mobility offers is what the applications need to offer.

While enterprise ISVs are increasingly focused on mobilizing their applications, they are challenged by more nimble startups, whose primary focus has always been on the “mobile angle”— these companies are not only winning business away from larger competitors, but are finding themselves in an excellent position for partnership opportunities and acquisition.

My next blog topic: Carrier app stores – stay tuned!

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