On Tuesday, we posted an audio recording of a mystery car’s exhaust note. To hear it again, click play above. We received the most varied responses of any NTEN yet—and still no one even came close. It was, in fact, our long-term 2009 Infiniti FX50S.
Like it? Download the MP3 and quiz your friends, make your own ringtone, or just lull yourself to sleep with sweet, sweet vehicular ear candy.
2009 Infiniti FX50S Exhaust MP3 (Right-click to Save As…)
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Having gone toe-to-toe with Macmillan Publishing over e-book prices last month, only to retreat in the face of a consumer backlash, Amazon is once again talking tough with publishers. This time, however, the stakes are even higher for the Kindle-maker.
According to a New York Times report, Amazon is threatening to remove the “buy” button from major publishers’ e-books if they don’t accede to a detailed list of its demands, including that it not be undersold by other e-book retailers. Although Amazon agreed in principle following the Macmillan dust-up to let publishers set retail prices for their Kindle books while it collects a 30 percent commission, the retailer is apparently keen to maintain its most-favored nation status vs. other e-book sellers, including Apple.
The immediate bone of contention, according to the Times, is Amazon’s demand that publishers sign three-year contracts guaranteeing that no other competitor get lower prices or better terms than it does. Publishers are said to be reluctant to commit to three-year deals when prices and consumer behavior are still in flux.
Amazon’s demand also puts publishers in a tight spot with Apple, which is insisting on most-favored nation status for its iBookstore.
While Amazon may have picked the wrong fight with Macmillan, and then overplayed its hand, the outcome of the latest battle really could be critical to the Kindle-maker’s long-term strategy, not because of what it could mean for retail e-book prices but for what it could mean for the Kindle platform.
Both Amazon and Apple share the same long-term e-book strategy. Each wants its device, the Kindle and iPad, respectively, to emerge as the dominant e-reading platform. As Apple itself demonstrated with the iPod and iTunes — a strategy deliberately aped by Amazon — controlling the distribution platform gives you control of the value chain. By locking both iPod users and the record companies into the iTunes platform, Apple was able to capture the lion’s share of the value from online music (mostly by selling expensive iPods).
The key to Apple’s success in music wasn’t just the relatively low 99-cent price of individual tracks but that the value in using an iPod for music was competitive against other consumer options, including illegal downloads and other MP3 players.
For both Amazon and Apple, then, it’s critical that the value of using a Kindle or an iPad for reading remains competitive against all other options, especially at this early stage of the market’s development when consumer habits are still up for grabs.
That means not just keeping a lid on e-book prices but making sure you’re the lowest-cost provider of e-books in the market. In this case, most-favored nation means most likely to succeed.
As for how publishers should respond to Amazon and Apple’s mutually exclusive demands for favor, the situation presents a paradox. Normally, supplying both sides in a war is an enviable position for a vendor. In this case, however, the battle is over driving down prices, which is not a fight most vendors want to find themselves in.
Their best strategy is to hold the line with both and hope that no clear winner emerges quickly.
Paul Sweeting is analyst with GigaOM Pro and the author of The Evolution of the e-Book Market (sub. required).
Gregory T. Huang wrote:
Between social media, company blogs, and TechCrunch, there is less room for traditional journalism these days. By the time you hear a company’s announcement and actually think about it, talk to the people involved, and have time to write something with any depth, it’s on to the next thing. But I want to take a minute to discuss a local deal from yesterday.
Gist, a Seattle company backed by Paul Allen’s Vulcan Capital and Foundry Group in Colorado, has acquired Learn That Name, a locally-created mobile application that helps you associate names with photos in your LinkedIn contacts. It uses a fast-paced, quiz-style game to test your recognition of your contacts’ faces. The idea is to help people network more effectively face-to-face (how refreshing). Meanwhile, Gist makes online software to help business people keep up with news and information about their contacts, to make their professional networking more efficient. The company is led by CEO and founder T.A. McCann.
Learn That Name was created by a team of 14 entrepreneurs at Startup Weekend in Seattle last August. (There’s another Startup Weekend happening in Seattle this weekend, hosted by Adobe.) Shortly thereafter, the team was selling its software in the iPhone app store and working to get it on other mobile devices. They all had day jobs, and although the acquisition price hasn’t been leaked, it’s safe to say each member of the team got a nice payout but won’t be retiring anytime soon.
Eric Koester, an attorney at Cooley Godward Kronish who helped lead Learn That Name, related some thoughts about the deal via e-mail: “When we were picking the LTN tagline while at Startup Weekend (our tagline was ‘Know the People You Know’) someone said that we should pick another tag line because Gist’s tag line is ‘Know More About Who You Know.’ We ultimately decided not to change our name and then as luck would have it, six months later that company we were worried about asking us to change our tag line acquires us. I guess in hindsight it makes sense, but was the farthest thing from our minds.”
It sounds like Gist saw some real value in integrating Learn That Name’s software into its own iPhone app. “I give T.A. [McCann] and Steve Newman [Gist’s chief technology officer] all the credit for making this happen,” Koester says. “They really went out on a limb to work with us. Initially the goal was just to try and build an app that used Gist contacts rather than LinkedIn contacts. As we started that process, they figured that we actually were a good fit for their broader purpose and realized it was better to maintain the technology in-house rather than have us try and do it. So they really deserve the credit for working with a small startup (if you can even call it that).”
And, as with most deals in Seattle, there was some fortuitous face-to-face networking done over a cup of coffee. “As far as how this all transpired, it was actually totally by accident,” Koester says. “T.A. and I had coffee to talk about a panel presentation I wanted to run by him. So we met to talk about that. At the end of the conversation, T.A. asked me how sales were going or how our app was doing, then he said that we should really try and find a way to work together. From that suggestion, the idea was born to build a Gist version.”
I saw this Dodge Charger mule on I-696 today and managed to get a few snaps on the ol’ iPhone. Only the roofline was without cladding, but a few elements were visible through the mesh and offered a slightly better, first-hand look than our last round of Charger spy shots. The grille retains its mild arch at the top and cross-hairs theme. Rounded rectangles, open on one side, are the form the new LED taillights take—the front indicators are also LED but the headlights weren’t on so I couldn’t tell if those were also diodes.
Overall proportions remain the same, with a long wheelbase and tall waistline. The contours of said waistline weren’t visible but we’re expecting to see some retro cues taken from the late-’60s Charger. The rear quarter window was again curiously blacked-out, but we predict glass will replace the chunky black plastic molding of the current car.
From what we know about powertrains, base models will use Chrysler’s new 280-hp Pentastar V-6, with the R/T retaining some form of Hemi V-8, likely the current 368-hp 5.7-liter. And we’re still holding out hope for another SRT variant.
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Volkswagen is planning to rebadge Suzuki models as VWs, board member Detlef Wittig revealed in an interview with the company’s employee newspaper, autogramm, which was published today. Moreover, Suzuki could take the lead in the group-wide development of subcompact cars and minicars. “We are looking to profit from Suzuki’s know-how in small cars,” said Wittig.
VW has trouble making money on small cars, and is ill-prepared to tackle the growing global market for low-cost cars. “Where VW’s portfolio ends, Suzuki’s begins,” Wittig says, and he elaborates: “Today, they are selling 2.3 million cars annually, and they are making money in this segment.” A new Wolfsburg-based office is currently being created to initiate common projects. It’s not yet clear whether such vehicles would appear in the U.S., but we won’t rule it out. We expect the cooperation to start on sub-Polo-size vehicles, which wouldn’t have a place in our market.
While VW gets cheap cars to rebadge, Suzuki gets hybrid technology. The SX4 will likely be equipped with a VW hybrid powertrain in the near future.
Last year, Volkswagen bought close to 20 percent of Suzuki’s shares to initiate a “long-term strategic partnership” between the two companies. Suzuki plans to use half of that revenue to buy VW shares.
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At last year’s SEMA show, Richard Petty launched Petty’s Garage, a new enterprise to build street vehicles. Now Petty’s Garage has teamed up with engine builder Arrington Performance to produce its first line of custom vehicles, dubbed the Signature Series. Over the next five years, Petty will release 200 Signature Series vehicles: 43 this year, then 50 per year through the end of the production run. For those doing the math at home, that means the group will build just seven vehicles in its last year—one for each of Petty’s NASCAR Cup championship wins.
This year’s car is a modified Dodge Challenger. Petty starts with an R/T model, fitted with a 5.7-liter Hemi engine and six-speed manual, and makes substantial modifications. Engine internals are replaced with tougher forged parts to handle 9 psi of boost from a Magnuson supercharger. The upgrades should be good for 600 hp and 550 lb-ft of torque.
Petty also bolts up a Hurst short-throw shifter, a Pedders coil-over suspension, Brembo brakes, and BFGoodrich tires wrapped around five-spoke Forgeline SP3S wheels. The Signature Series Challenger gets an all-black exterior treatment, with an optional functional shaker hood and non-functional racing stripe. The interior receives special leather seats and Petty’s signature on the instrument cluster.
The first Signature Series Challengers should be delivered next month. If you want one, plan on spending $34,930 on top of the cost of a stock Challenger R/T.
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It’s not every day that a new car company comes into existence. But that’s exactly what McLaren announced today. We’d already been made aware of the details of its first car, the MP4-12C, but McLaren Automotive hadn’t officially been launched.
Ron Dennis, F1 legend and executive chairman of McLaren Automotive, introduced the new company and said that it is aimed directly at the Ferraris, Lamborghinis, and Porsches of the world. Why now? And why form a car company after 44 years of being a Formula 1 constructor?
“Since the formation of McLaren in 1966, 106 F1 teams have come and gone. Only Ferrari and McLaren have been in F1 continuously since then. It became clear that staying an F1 team is not enough. The company needed to be broadened,” Dennis said.
The broadening will include a new production facility due in the spring of 2011, variants of the 12C, and even two more vehicles are planned. When questioned about what these models might be, Dennis promises that the McLarens will be mid-engine two seaters.
An as-yet-unannounced new partner is to purchase 48 percent of McLaren, and with that influx of cash, the company will be able to move forward with its planned new models.
McLaren’s MP4-12C goes on sale at eight U.S. dealers in June of 2011 with a price that we estimate will be around $200,000.
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Wade Roush wrote:
Okay, bad joke in the headline. But there’s some real news behind it. The Boston startup formerly called uLocate, long known mainly as the creator of the GPS-based Where local search app for mobile phones, announced yesterday that it has taken the app’s name as its own.
The change “creates a more coherent message for the marketplace about who we are,” says Walt Doyle, Where’s CEO. “Where is our entire business, so it was time to have alignment between the consumer-facing product and our corporate identity.”
It’s just the latest in a long series of transformations for the startup, which was founded in 2003 by a group of alumni from the online news network CNET. First came child-tracking software for GPS phones, then fleet-tracking software, a pet finder, and friend-finder apps for Mapquest and the now-defunct cellular carrier Helio. After a company relaunch in 2007, uLocate came up with a platform designed to help developers build GPS-enabled “widgets” or mini-apps for multiple mobile operating systems and networks.
Finally, after raising some $16 million in venture funding from the likes of Venrock, GrandBanks Capital, and Kodiak Venture Partners, the company located its true niche. Building on the widget platform, it created the free, advertising-supported Where app, which works on almost all mobile platforms and includes many of the location-based widgets originally built as exemplars by the company’s own engineers.
Those widgets enable searches for local news, movies, weather, traffic, restaurant and business reviews, concert and sports event listings, and gas prices, as well as Starbucks and Zipcar locations. Where also features social-media tools, such as Foursquare-style check-ins and a Facebook-style community wall. It’s available for iPhones, Android phones, BlackBerry devices, Palm phones, and works on the AT&T, Boost, MetroPCS, Sprint-Nextel, T-Mobile, and Verizon networks.
And starting this week, the company has linked up the newly revamped Where.com website with the mobile app, via a personalized “placebook” that functions like an electronic clipboard. A user with a Where accounts can search Where.com for restaurants, events, or other information and save the results to his Web placebook, which automatically synchs with the placebook inside the Where app on his phone.
In other words, Where wants its site and its app to function together as a one-stop shop for all location-related activities. “We saw tremendous value creating the opportunity to connect the past, the present, and the future in terms of how people relate to places,” explains Doyle. “More specifically, the mobile phone is a fantastic tool for the present but it’s very bad for the future. You don’t use a mobile phone for research when you’re trying to find places of interest that you might want to go to in the future. With Where.com, you can discover, save, and share places that are automatically synched with your phone.”
Special offers on many of the popular smartphones in the fourth quarter drove penetration to nearly a third in the U.S., according to The NPD Group, a wireless market research.
The report found that smartphones are now in the hands of about 31 percent of the U.S. population, growing from only 23 percent in the year-ago period. Of those phones purchased in the fourth-quarter, nearly two-thirds cost $150 or less, and many more were bought for even less. “Although we are seeing more expensive models among the best-selling handsets, carriers are now offering some popular smartphones for less than $100,” said Ross Rubin, NPD’s executive director.
As penetration rises, Rubin cautions that it will take much more than the price of the handset to keep adoption rates high. Rather other factors, he said, such as the price of data plan will become the biggest hurdle.
Yahoo (NSDQ: YHOO) has hinted for several months that it would be buying more companies and it’s finally made an acquisition—buying up social sports startup Citizen Sports, which it says will compliment Yahoo Sports, the top sports site in the U.S.
And, indeed, the move immediately gives Yahoo clout in the social networking and mobile sports spaces, where it has been weak. Citizen Sports owns a series of popular sports apps on the iPhone and on social networking sites, including what it says is the most popular fantasy football app on Facebook. By contrast, Yahoo has long been the top player in the online fantasy sports market, but only last September did it release a fantasy football iPhone app and, as far as I can tell, it does not have any sports apps at all on Facebook.
In its announcement, Yahoo says Yahoo Sports content will be integrated into Citizen Sports’ apps. Together, the company says, Yahoo Sports and Citizen Sports will create a “more personally relevant experience, drive deeper user engagement and create opportunities for advertisers to interact with audiences in new environments.”
Financial terms of the acquisition were not released, although AllThingsD’s Kara Swisher—who predicted the deal earlier this week—put the price at between $40 million and $50 million. Citizen Sports had raised roughly $10 million in a funding round four years ago, back when it was operating under the name ProTrade Sports.
This is Yahoo’s third acquisition under CEO Carol Bartz. Going ahead, the company has said it is interested in three general areas—deals that would add “important technology and the people behind it,” content-related deals, and geographic buys that would let the company move into or strengthen its position in a market.
Here’s our earlier report on what Yahoo may buy next.
The release:
SUNNYVALE, Calif., Mar 17, 2010 (BUSINESS WIRE)—As part of its ongoing commitment to be the center of people’s online lives, Yahoo Inc. (NASDAQ:YHOO) today announced it has signed a definitive agreement to acquire Citizen Sports (http://www.citizensports.com), a company that brings the world of sports to fans’ favorite social networking sites and mobile devices through innovative applications. This acquisition will strengthen Yahoo!‘s social strategy of enriching, aggregating and distributing social content from across the entire Web, and offering a highly customizable social experience.
“Yahoo! is in a unique position to combine our deep expertise in content and aggregation technology to offer a highly personalized social experience,” said Bryan Lamkin, senior vice president, Consumer Products Group, Yahoo!. “Sports has been among the earliest online categories to experience rapid social proliferation, and the combination of Citizen Sports leading products with our world-class sports experience on Yahoo! Sports is a win-win for sports fans globally.”
Millions of people across the globe use Citizen Sports’ array of social and mobile products to play fantasy sports, fill out brackets, check live scores and read up-to-the minute news on sports including football, hockey, soccer, baseball, racing, rugby, hockey and cricket. Yahoo! Sports’ content will be integrated into these products, creating a seamless experience for sports fans wherever they are. On Yahoo! Sports, users will be able to broadcast their allegiances, create or join a conversation with friends and fans and cheer for their teams through Citizen Sports’ applications. This integration will further transform Yahoo! into a more personally relevant experience, drive deeper user engagement and create opportunities for advertisers to interact with audiences in new environments.
As the #1 destination for online Sports with more than 39 million monthly unique users in the U.S.*, Yahoo! Sports provides people with the most timely, relevant and comprehensive sports news, information and programming. Citizen Sports’ network of popular applications for Facebook, MySpace (NYSE: NWS), hi5, iPhone and Android span professional, college and high school sports.
“Citizen Sports was founded with the intent to enable fans to access news, scores and fantasy games on the platform of their choice,” said Mike Kerns, founder and CEO of Citizen Sports. “We look forward to becoming a part of Yahoo! and bringing our social experiences to their 600 million users around the globe.”
Citizen Sports was founded by Mike Kerns and Jeff Ma in 2004. Since then the company has brought together millions of sports fans from around the world to enjoy sports and connect with their friends. Citizen Sports is based in San Francisco.
Yahoo! expects to complete this acquisition in the second quarter of 2010. Financial terms were not disclosed.
* February 2010, comScore (NSDQ: SCOR), U.S.
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MocoSpace, a social network that is primarily accessed on the phone, has reached 11 million users.
While that may pale in comparison to the 100 million people using Facebook on cellphones, it easily surpasses the 560,000 using Foursquare. However, it is more in line with the 500,000 users that MocoSpace says are logging in on a daily basis to the network. MocoSpace VP of Business Development & Marketing Casey Jones said: “Scale is a critical piece to being able to deliver on the promise of our targeting capabilities. We are very fortunate to have a large, growing, and loyal audience.”
MocoSpace provided other statistics following its appearance at SXSW, as well:
—The site generates 3 billion pages per month and was recently named the 4th most visited mobile web site in the U.S. by Ground Truth (behind big names like MySpace (NYSE: NWS), Facebook, Google).
—Average session times are over 13 minutes on mobile.
—Mobile users on average access the site more than 5 times per day.
—Users sent more than 1.7 million e-cards during the week of Valentine’s Day.
—Over 200 new artists are submitting their own music to MocoSpace daily.
The company says it primarily makes money through advertising targeted at their demographic of 18 to 24 year olds, which is one-third Hispanic and one-third African-American. Recent campaigns were from Sony (NYSE: SNE) Pictures, Spike TV and the U.S. Census. In addition, the site uses virtual currency, which is expected to exceed 15 percent of the company’s revenue by the end of 2010.
RTFM: A simple, four-letter initialism that can deflect—in the most patronizing way possible—nearly any car-related question. (For those who don’t know, it stands for Read the F****** Manual.) While RTFM is in common usage, at least among self-righteous internet denizens, allow us to introduce a new variation: WTFM, or Watch the F****** Manual.
We suggest the term because Mazda is testing a new way to educate its new owners with this very cool video Smart Start Guide. (It’s worth noting that Chrysler is going whole hog and eliminating huge manuals altogether, replacing them with DVDs and slimmer handbooks.) Mazda’s guide covers five topics: keyless entry and start, auto headlights and wipers, climate control, Bluetooth connectivity, and the navigation system. We were told that selecting the topics was more a matter of using what good-quality footage was on hand—from dealer training and other sources—rather than focusing on specific issues Mazda owners were having.
But that’s not to say the guides’ success isn’t being closely tracked. Mazda canvassed its dealers’ on-hand inventory for vehicles that featured all of the relevant equipment, and out popped 800 or so top-spec Mazda 6 Grand Touring models. As a result, 400 of the guides are being placed in the cars, with the remainder going without. Mazda will be following up with all of the cars’ buyers and comparing their experiences to see if the video guide made any appreciable difference in their understanding of their new family sedans. Some dealers will specifically point out the new guides, while others will just drop them in the glove boxes without a peep.
The reason behind the video guide? The company says it has seen concerns in its own owner surveys as well as third-party analytics like the J.D. Power Initial Quality Study regarding “difficult to use” features. Another reason cited was that customers usually want to leave after the buying process instead of sitting through a long—and valuable—introduction to their vehicle; they’re done dealing with the dealer and want to go enjoy their new car. The video guide gives the company an opportunity to explain features more in-depth than with a printed handout.
One concern with Mazda’s guide is what’s going to happen to them once the battery dies; it’s good for 40 plays or so. Will owners just toss the electronics into the trash rather than properly recycle them? Probably. It’s good, then, that the package also includes a paper “Smart Start Guide.”
Feedback so far has been positive, Mazda says, and we can understand why. The video guide is a cool way to interact with customers, and, taken with Chrysler’s initiative, this looks like the future of your glove box.
Watch this video to see clips of Mazda’s new guide in action (video of video is so meta):
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Sequoia Capital partner Mark Kvamme, citing examples from campaigns run on Funny or Die and AdMob, told an audience of marketers at OMMA Global in San Francisco today, “If you can harness social media marketing, you don’t have to pay for advertising any more.”
Kvamme, whose experience in advertising dates back to the 1980s, when he led advertising agency CKS Group, justified his argument using Neil Borden’s “Marketing Mix” theory. He said Borden’s elements of promotion — advertising, direct marketing, PR, point of sale and word of mouth — are still valid for marketers today, just in different ways.
The biggest difference can be found in the word of mouth category, said Kvamme, who subsequently called it a tremendous — and cheap — opportunity. “If you take what’s going on on Facebook, on LinkedIn, on Twitter, on Digg, the masses are starting to make their own media, and it’s basically free,” he noted. “So if you can figure out how to work in this world, you can get your message out very quickly.”
Funny or Die’s (one of Kvamme’s Sequoia investments) recent Presidential Reunion, which brought together actors who’d portrayed U.S. presidents throughout the years on “Saturday Night Live” at a cost of $20,000 (primarily flying all the participants in), according to Kvamme, yielded some 3 million views.
Presidential Reunion was a bit of a passion project for Funny or Die co-founder Will Ferrell, but Kvamme also pointed to last summer’s relatively unsuccessful movie “The Goods” starring Jeremy Piven (and produced by Funny or Die co-founder Adam McKay), the expected box office returns for which were lifted 15 percent through a Funny or Die campaign including prizes for retweets on Twitter (which led to the movie becoming a Twitter trending topic), featuring on the front page of Funny or Die and its Facebook fan page, two appearances on the front-page of Digg for custom Funny or Die content, live-tweeting from the premiere and a live conversation with McKay on Ustream. It generated “several million dollars in sales for something [the studio] probably didn’t pay Funny or Die enough for,” said Kvamme.
But the next big opportunity is in mobile, said Kvamme, using AdMob to illustrate (again, another Sequoia company, but at least one that’s had a successful exit, with Google beating out Apple to buy it for $750 million). With more than twice the global penetration of the Internet, mobile — especially smartphones — represent an opportunity to harken back to that “Marketing Mix” theory, because they can encapsulate all the elements of promotion from one single screen that’s attached to its owner at all times. An AdMob campaign for the movie “Wolfman” had ads on mobile media sites ad within applications that users could click on in order to get more information, share it with their friends, buy tickets directly and set up a mobile calendar alert.
Sure, Kvamme is pitching his own investments here, but to his credit he said that one of his favorite and most-visited sites is search.twitter.com, for keeping up with what people are talking about online. He also talked about Facebook’s opportunity to become the new mass media — with half its 400 million users logging in every day, “that’s almost like what broadcast television was 20 or 30 years ago” — and to dominate and grow the market if it ever does launch its own payment platform inside its trusted environment, just as PayPal revolutionized eBay.
Related content from GigaOM Pro (sub req’d):
Why 2010 Still Won’t Be the Year of Mobile Advertising
Here’s another chart with hockey stick-like projections for the global mobile applications space: The market is set to grow to $17.5 billion by 2012, which will be greater than the value of all CDs estimated to be sold that year. The report was commissioned by GetJar, which distributes free applications on the behalf of developers worldwide, and was conducted by Consultant Chetan Sharma.
—Mobile app downloads across all types of handsets are expected to increase from more than 7 billion downloads in 2009 to almost 50 billion in 2010 – an annual growth rate of 92 percent.
—The sale of apps will shift from carriers to off-deck sources over the next two years. In 2009, mobile operators accounted for more than 60 percent of all apps revenue, but in 2010, this will fall to under 23 percent.
—In 2009, the number of app stores grew from eight to 38 – an increase of 375 percent.
GetJar only distributes free applications today, and makes money through an auction-like process in which developers bid to have higher placement in the app store. GetJar also provides its library of applications on a white label basis to handset makers and carriers, including Sprint (NYSE: S), Sony (NYSE: SNE) Ericsson (NSDQ: ERIC) and even Carphone Warehouse in the UK. GetJar VP Patrick Mork said they conducted the survey to get a bigger picture of what was going on in the market today: “With regards to downloads and where it’s going, there’s no earth-shattering surprises,” he said. “The global market will be worth $17.5 billion by 2012, which effectively means that it will outsell more established mediums.”
The big question is whether apps will continue to largely be free and subsidized with advertising, or whether consumers will buy them. The overall revenue from both paid and ad-supported downloads and virtual goods is expected to increase from $4.1 billion in 2009 to $17.5 billion by 2012. But the mix will change over the next two years: The report found that advertising-based revenue accounted for about 12 percent in 2009, but by 2012, advertising is expected to generate 28 percent of revenues.
Because advertising will be relatively slow to take off, Mork said GetJar has decided to start offering paid apps, and has been trialing a number of payment solutions over the past year. Paid apps will be rolled out on a limited basis by the end of the year. The revenue split is expected to be as favorable as Apple’s, which shares 70 percent of revenues with developers, but it could be even greater, Mork added. “We’ve never made money off the sale of content. Developers bid for visibility, so in theory we could give 90 percent or even more back to developers. If it works for them, then why would they not invest more money in bidding for more downloads?
Still, Mork believes a majority of apps should be free. “Some consumers will never pay for content, but the business models haven’t matured yet, so the paid model is the only thing they know and works to a certain extent. But selling content in emerging markets will never be a big market. Somehow we’ll have to monetize off the back-end. I think it will happen, but it will take a few years.”
According to a study commissioned by mobile application store operator GetJar, the mobile application market will reach $17.5 billion by 2012. By then, the number of mobile application downloads will have also grown to nearly 50 billion from just over 7 billion in 2009. Although those numbers may seem high, they line up with other estimates, such as those previously reported by analysts at both Gartner and research2guidance.
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The GetJar study, run by independent consulting firm by Chetan Sharma Consulting, noted that over the past year, the number of app stores grew from 8 to 38 and that there are even more in the works. Apple’s iTunes store leads the way with a reported 150,000 mobile apps and 3 billion downloads to date. Google’s Android marketplace is growing fast as well, and now has more than 30,000 mobile applications that run on devices like the Droid, the myTouch 3G and the Nexus One, among others.
However, as Getjar founder and chief executive officer Ilja Laurs told the BBC, feature phones should not ignored either. “It is almost as if these phones don’t exist. We know smartphones are an extremely important phenomenon, but in terms of consumer mindshare and revenue share, feature phones represent 90% of the global market compared to 10% for smartphones and data cards.”
He also made the bold prediction that “mobile apps will eclipse the traditional desktop Internet,” even going so far as to say that “mobile devices will kill the desktop.”
Here are a few other highlights from the report (via Paid Content and TechCrunch):
A report earlier this year from research firm Gartner predicted that application stores are expected to generate revenues of nearly $7 billion over the course of 2010. That figure is a combination of the $6.2 billion spent purchasing the mobile applications themselves combined with an additional $.6 billion generated through advertising revenues from in-app ads. The Gartner analysts also predicted that mobile application stores’ revenue will grow to $29.5 billion by the end of 2013.
Another forecast from research2guidance estimated the smartphone application market will grow from $1.94 billion in 2009 to $15.65 billion
by 2013.
Although these aren’t exactly apples to apples comparisons, the overall trend is apparent: app stores are growing rapidly and generating massive revenue streams.
Qualcomm plans to bid for a chunk of spectrum in India’s upcoming 3G auction, the chipmaker said today. Qualcomm is taking a page out of Google’s playbook — the search engine giant bid for spectrum in the U.S. but never had any plans to become a network operator. The San Diego-based chip maker doesn’t really want to be a network operator nor does it want to deploy a 3G technology — it wants to jump-start demand for its 4G chips and meet India’s demand for mobile broadband. From its release:
“Qualcomm has a history of participating in spectrum auctions to expedite the commercialization of new wireless technologies. By participating in India’s BWA spectrum auction, Qualcomm can foster the accelerated deployment of TD-LTE.”
If the chip firm wins a chunk of spectrum in the 2.3 GHz band, it will want to promote TD-LTE, a version of the fourth-generation wireless standard that uses less total spectrum in deployment. Qualcomm is also making the bet that India will want to skip quickly from a 3G to a 4G service, a bet China Mobile is also making with its upcoming TD-LTE deployment.
Each generation of mobile broadband technology adds more capabilities for data, which we here in the U.S. are already consuming at a network-crushing pace. Bringing in LTE networks with more capacity will help with both speed and the total amount of data that can be transferred over the air. For cell-phone users in India, which has seen its 3G spectrum auctions delayed for years, there had been talk of skipping 3G and hopping right to 4G services that could handle current and future demand.
Qualcomm is also aiming to jump-start market demand for its chips in end devices in India and China (the two most populous countries), especially as its 3G royalties begin a decline in coming years. Qualcomm has to be worried by the increasing deployment of WiMAX-based services, which don’t really require the company’s technology and thus will fail to line its pockets.
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After having seen tremendous success with its geo-local app, Where, the Boston-based uLocate Communications today rebranded itself as Where. The company also launched a new web site that allows mobile users to sync information in the app between the phone and the PC. Where.com users can go online to search nearby events and businesses, check in to record their current location and share their activity via social networks.
The addition of a parallel web site is a wise move that should give users a more immersive, detailed experience than can be delivered on a handset. And it could give Where one more place to deliver the ads that are the foundation of its business. The company last week launched a hyper-local advertising network to deliver highly targeted, location-specific pitches and scrap support for ads for generic content and services like ringtones and chat offerings.
The app is available for the iPhone, Android devices and more than 100 other handsets. Where claims that so far it’s seen more than 10 million downloads.
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Image courtesy Where
Gregory T. Huang wrote:
As Don Corleone said in The Godfather, “A man who doesn’t spend time with his family can never be a real man.” If that’s true, then a Seattle company called Cozi should help quite a few people become real men.
Cozi is a tech startup focused on family-related software for the home. That includes things like online calendars, shopping lists, to-do lists, message boards, and family journals for sharing family memories and photos. These are the kinds of things, the company reasons, that busy families want to have to keep the trains running on time, and which most still do with paper and pen, or a physical bulletin board. Cozi puts it all online.
But there’s something deeper here. Cozi’s mission statement is to help family members improve their relationships with each other, through its software. I’m paraphrasing, but this is essentially the company’s 10-year “audacious goal.” It’s posted on the wall of Cozi’s meeting room at its headquarters in the Smith Tower near Pioneer Square. The place feels like a comfortable living room, as CEO and co-founder Robbie Cape pointed out when he showed me around. I came away with a strong sense that Cozi is a family, not just a company. And that if Cape were in a Godfather movie, you’d call him Don Cozi. (I’m kind of hoping that sticks.)
In any case, a sweeping mission to help families is all good—and atypical of tech startups, where 80-hour weeks and product focus are the norm. But it’s one thing to have a noble mission, and another to deliver on it. That’s why Cozi is interesting right now: for the first time, it can see a viable path to achieving its mission. “We are only now starting to see signs that the vision we had when we started the company can become a reality,” Cape says.
Cozi seems to have surged ahead of most startups in family organization software, including Fircle, Famundo, and Nesting.com. Seattle-based Trumba started as an online calendar service for families, but has switched to focusing on businesses and other organizations. Meanwhile, most big companies like Microsoft and Google don’t focus on family software because to them, the market is too small.
Being privately held, Cozi doesn’t disclose its financial performance and growth rates. But here are some hints of success. Cozi’s software now comes pre-loaded on all Dell machines. It has …Next Page »
The mobile application economy will be worth $17.5 billion by 2012, according to a report released this morning from analyst Chetan Sharma — surpassing that of the worldwide market for CDs. But while all eyes here in the West are focused on the iPhone and Android devices, much of the expected growth will come from users in emerging markets with less sophisticated handsets.
The 19-page document, which was commissioned by the UK app retailer GetJar, found that Asia was the top worldwide market for overall download share in 2009, while North American users accounted for more than 50 percent of total global mobile app revenues. That will change in the next several years, however, as the region comprised of the Middle East and Africa overtake North America to become the world’s largest market for mobile app revenues by 2012.
But unlike North America, where users with high-end smartphones are happy to plunk down a few dollars for a time-killing casual game, growth in emerging markets will lean more heavily on productivity apps used by consumers who don’t have regular fixed-line Internet service. And app developers and distributors will be tasked with finding ways to monetize their wares beyond simple one-off purchases.
“The thing you have to keep in mind when talking about emerging markets is that in places like India, 90-95 percent of consumers are on prepaid cards,” so the concept of paying for mobile content over the phone is nonexistent, Patrick Mork, who heads up marketing for GetJar, told me last week. “But in India (the market for mobile applications is completely different. Some of the social networking brands are still big, but apps there are much more focused on productivity — things like Opera Mini and things to protect your phone like anti-virus apps.”
So while jiggling body parts and fart simulators can be quick money-makers in the West, developers and retailers in other markets would do well to offer apps similar to the stuff we use on PCs. They’d also do well to experiment with advertising and other ways to monetize those apps.
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