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David v Goliath: Outcompeting with Mobile Apps


David GoliathHorace Dediu, founder of, posted a presentation he gave to an audience in Helsinki about the potentially disruptive nature of “apps” as we know them in mobile computing. Being very meta, Dediu posted the presentation using the Perspective™ app for the iPad, which is also required for consuming the presentation.

Dediu presents several data points including market share of smartphone manufacturers, platforms that run on them, download rates of songs versus apps on iTunes, and revenues generated by apps and payouts to developers. The implications of these data points are staggering.

With 50% of Americans using smartphones and that figure trending upward aggressively in addition to mobile penetration worldwide, the opportunities for app developers and content producers to provide value directly to consumers are tremendous. The pervasiveness of smartphones and other mobile devices serves as a vast distribution channel that has a very low barrier to entry. App developers and content producers are able to have direct relationships with customers and in doing so are able to capture very rich data on usage (e.g., number of times an app is launched, times of day it launched, the location of the user, amount of time spent in the app, etc.). In capturing this data, app developers and content producers are able to craft rich, intimate experiences that provide even more value.

The disruptive nature of apps is apparent in the data points presented by Dediu as it relates to apps versus songs downloaded per iTunes account. However, in my opinion, and that shared by Dediu and others, the scope of the potential disruptive nature of apps goes far beyond that of music. It has the potential to disrupt many other forms of media whose job to be done is to entertain and communicate.

Although I do not have hard data to support this, streaming services like Netflix, Hulu Plus and Amazon Instant Video have a potential to disrupt cable and satellite television providers. These new entrants have a significant advantage of mobility, price and usability (e.g., significantly fewer advertisements, on-demand content, etc.). Although these individual services may not be “good enough” for certain pockets of the mainstream (e.g., I haven’t figured out how to get live NFL games on my iPad), I can foresee content producers (like the NFL) creating their own apps to fill the gaps, given the potential for upside and the low barrier to entry.

What does this mean for the enterprise? Large incumbents in both hardware and software have historically had the advantage with their distribution channel and supply chain muscle. However, with mobility and the cloud, this equation has changed significantly. If smaller entrants can reach the multitudes of consumers with scale, what will be the basis of competition? Will smaller entrants be able to utilize these technologies to strike down the goliaths of enterprise solution vendors? is probably the most popular proof in existence, but can this be duplicated? Only time will tell.

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