May 22nd 2009

Smartphone apps market is getting tougher

iPhone versus Smartphone
Image by six steps  via Flickr

The Smartphone business  apps market is getting tougher,  but  all markets get tougher over time. We can thank the iPhone “noise”  and the deluge of applications it has spawned for this.

So what usually happens to a business  market when it becomes innundated with lower value consumer priced applications? General perceptions of value are reduced and quickly. Also market noise (sizzl)  rises dramatically to drown out all messages.  What has worked before becomes less and less effective.

It has been seen before  where a pricing expectation is reset in a product category.

  • the Palm Pilot market evolved to a point where the “floor” price for applications became quite low.
  • add-ons for Quicken/Quick Books are “hemmed in” by the purchase cost of Quickens products , setting a price expectation in the purchaser, which creates a sales challenge for robust add ons.
  • some early Blackberry applications took marketshare  away from heavily “customized” mobile hardware/software solutions by players such as Motorola.
  • the Open Shop movement in construction reset all pricing in all construction leading to an erosion of “union’ power.

We are seeing this erosion  at the moment in the smartphone market.  The deluge of iPhone applications (many of which are very lite in content and low in cost) is impinging on the perceived value of serious (enterprise) business applications on the Blackberry and to a lesser state (there are fewer) the iPhone and Windows Mobile.

We see mobile enterprise apps,  which had required some serious heavy development lifting to get to where they are today,  are starting to face some serious sales challenges.  The target enterprise customer has a changed idea of what is value in his market.

The challenge for a serious app developer when this happens is to be able to respond with very precise marketing and sales messages which  more clearly state the product value to the correct audience which still values this . Technical “early market” developers have much trouble with this as they have been able to get to where they are without a mature marketing/sales approach.

Costs of sales and marketing has to go up to drive sales volume.  The “technicallly ” driven firm does not realize this until it is much too late.  At the same time, the internal teams have to work to drive down all costs, while looking to build a “family’ of products as the golden goose starts to lose its glitter. The company has to become very smart about its market, while remaining smart about its technology. Many companies just do not possess the marketing DNA to be able to do this on their own.

Companies which are “on the bubble” with few retained earnings at this time are unlikely to be able to survive.  Many times,   consolidation at a reduced value seems like the only way to stay in business.

In past posts I have talked about the positive impact of Precision Sales and Marketing. It is now the turn of the Smartphone market to take notice of these changes and their need to be precise in sales and marketing.

Enhanced by Zemanta

Similar Posts:

Leave a Reply