It is about time to revisit the “native app or mobile web” question. I wrote a blog post on this a while back explaining the differences between these two ways of entering the mobile. Since then lots have happened in our business, both with regards to hardware and software. And not to forget, the usage of mobile web and apps.

As you know, Mobiletech believes in the mobile web as the platform for pretty much everything on mobile. We love iPhone apps, for sure. Mobile web and native apps can live happily side by side. Read this blog post as an advice where to make your future proof investment, and you can still create native apps for other cases.

Some background statistics

According to Informa market data there were 666 million mobile internet users by the end of 2009. This number is excepted to grow to 2.13 billion by 2014. According to Admob smartphones accounts for close to 50% of all mobile web traffic. Of the ~330 million smartphone users 50% have iPhone, 24% have Android, 18% have Symbian and 4% have RIM OS * (We know that these numbers are way to high since smartphone penetration is extremely high in Admobs markets. Some say that iPhone accounts for 2% globally and smartphones 15%). Feature phones are loosing terrain,while “internet enabled devices” (iPad, PSP, Nintendo DS etc) are gaining.

Globally the smartphone sales from 2009 is dominated by Symbian:

Source: CloudFour.

The Mobile Web – worlds biggest app-store!

The numbers above points out that surfing the internet on mobile is popular and will be much more popular in the future. Many different sources suggests that web on mobile will be the dominant channel in the near future. Google says desktop web will soon be irrelevant. Search is also one of the most popular activities on mobile web according to Novarra. All in all, the potential discoverability on the web is very good! In addition to search you also have a stronger presence of social media on the mobile web. So for mobile web applications the audience is 666 million, smartphone native apps 330 million, iPhone apps 165 million.

Get the users to your site or app.

According to MocoNews, the New York Times iPhone application has reached 3 million downloads. How many regular users is that? If the numbers from Pinch Media are correct, this means 30000 users on a regular basis. Again, it is difficult to compare this number to the equivalent on mobile web, but the number of returning users on mobile web sites is way higher than 1%. If I look at the numbers Mobiletech has access to the lowest percentage I could come up with is 10% when it comes to regular users over time. From a big North-American customer of ours I know that most users are regulars, and that the number of page views has increased threefold the last year.

Different services, different medium.

According to a report from Taptu there are differences between what type of content or service fits best on web or apps. Obviously, games works best as native apps as they often use heavy graphics and benefit from not having to access resources via a browser. However, shopping (mCommerce) and services prefer the mobile web. According to Taptu this is because many of the mCommerce products do not fit into the static iTunes content oriented billing model. This fact is true for other sectors as well. On the mobile web you have the freedom to create what ever business model you want.

One thing that we have learned from the apps is that they are great for marketing. Once you got an app, you get potentially lots of attention since the “app phenomenon” is so hyped and hot these days. So from a marketing perspective apps are great!

Usability; Native apps vs. mobile web

However, user testing of people attempting tasks on their mobile devices shows that the apps have much higher usability than the websites. For an “average” mobile site, compared to a glossy native iPhone app that is very true. As Jakob Nielsen points out; awkward input, download delays and badly designed sites are the main reasons. But remember that the iPhone app is tailor made for iPhone. The average mobile site is not. Therefore it is extremely important to adapt the presentation and interaction model to the device and browser you are serving. Gartner believes this will be the case in the near future as well:

“In mature markets, the mobile Web, along with associated Web adaptation tools, will be a leading technology for B2C mobile applications through 2012, and should be part of every organization’s B2C technology portfolio.” (Gartner, 2010)

Maintenance of mobile web apps compared to native apps.

If you have a good system for doing adaptation of content and presentation to mobile devices and browsers, you only need one codebase to develop and maintain. This will then work across all devices, feature phones as well as smart phones.

On the app side, however, you have a number of platforms you have to support. First you have the iPhone. The iPhone platform was pretty straight forward (even if you had the iPod with slightly different capabilities), but now the iPad has arrived. Now, you need to create an iPad version of your app as well.

The other big one is Android. Andriod is growing fast and gaining market from Apple rapidly. So you might want to create an Android app as well. But one version of the Android app is not good necessarily enough. Due to the nature of Googles Android project there might be fragmentation among Android implementation on devices as well. A similar issue as with the good old Java applications.

Symbian is the next big one. Even if the market share is decreasing it is still significant. RIM is also so big that it makes an impact. We should also mention Java, Windows Phone 7 / Mobile and WebOS from Palm.

Editorial control and freedom

To be able to control the content and presentation is very important for any content provider. Due to the cumbersome maintenance and update routines in native applications and appstores this process can take several weeks. The work includes programming, testing, approval process and then the end users have to actively choose to update the app. On mobile web apps you only have to do limited programming and testing. The users will then always get the latest content and experience.

Business models

Yes, most app-stores comes with a ready-to-use business model where the end users pay for the application, upgrades or access to content or services. In the iPhone case Apple is calling all shots; IF you will get business, HOW you will get business, and HOW MUCH revenue is shared with you. Currently 30/70. This seems to be a small price to pay to get access to a working payment scheme. But I have not heard of a single case from the media- , content-, services industry about anyone actually making money on this business model. We will probably get the proof when the iPad has been in the market a while. The media industry is hoping that the iPad will be the saviour of the badly hit business sector, but it is not looking good according to early numbers.

“One big trend that’s apparent: big media and entertainment companies are doing very well in top free apps, but are barely present in top paid apps, whether by number of apps downloaded, or by the gross revenues from their apps”

Frankly, after testing a few of these “iPad magazine apps” my self, I am not surprised.

So how about the business models on the mobile web? Well, there are none. In my experience in the mobile space this seems to be the main issue compared to native apps. Content owners and publishers don’t know how to make money on mobile web. This can be a show-stopper, I fully understand that. On the other hand we don’t know if the app-store model is working either. Further, on the positive side, no out-of-the-box business model means that you are free to create your very own where you get all revenue and the direct customer relationship. You probably have some business models from your desktop web offering you can reuse and adapt to mobile as well. Reuse is good.

Before you can get any business model to work, you need eye balls. As a part of the web, the eyeballs are closer and many more than just the “iPhone segment” or “app segment”. Next step would be to make sure the users who found your mobile web site come back again. Then we need to make the user feel happy and satisfied. This is where usability and optimised presentation and interaction comes into the picture. Now you have what you need to start exploring business models on the mobile web. The mobile industry is just at the breaking point of entering this stage now. Some have found working business models, other haven’t. Probably the business models will vary from case to case. There will not be a common mobile web business model. Even the mobile advertising business model is still immature. Still too close to desktop advertising. Hence, not utilising the unique aspects of the mobile channel.

My advice for the right direction would be: Think social media, think CRM, think mobile uniqueness, think rich media. There is a business model in there somewhere.

Owen Gloss spent $32,000 developing the iPhone app Dapple and made a total of $535 in revenue during the first month of sale. To break even, Owen needed to reach 9150 downloads. Read more of the interesting story here and a follow-up here.

Owen concludes with “I hope that this article might serve as a counter-point to the articles that seem to go around the web about devs making hundreds of thousands of dollars off an iPhone app. Everyone within the dev community understands that the odds of that happening are very slim”.

Best from both worlds

The Norwegian case “Meny” is a great example on how to get the distribution and business model from the app-store, and get the flexibility and the integrated workflow from the mobile web. The native app is only a skinned browser showing an optimised mobile web site. The same site as can be viewed through the web browser. Other approaches to such hybrid solutions include Appmakr and a hand full of others.

HTML5 apps

The term “HTML5 apps” was introduced to me by Peter-Paul Koch. HTML5 apps are applications using the features of HTML5 in different wrappings. The app can run in a browser or it can be a standardized W3C Widget which is for all practical reasons a native application. I won’t dive into details on HTML5 here, but HTML5 includes many new features that makes it possible to create web based applications behaving like native apps.

Nextstop.com chose HTML5 apps over native iPhone apps. This video explains the concept:

[youtube]http://www.youtube.com/watch?v=Jks-idxVrCs[/youtube]

The Morgan Stanley mobile report states that HTML5 capable browsers and run-times are increasing rapidly. Further, Google have announced that they now put mobile before desktop, and the platform they have chosen is the web. For example Google Voice is a HTML5 app.

The W3C Widgets is a standard that allows web applications to run on the device like a native app. These widgets can even run on the desktop when the phone is idle. Moreover, widgets are not limited to phones. Widgets can run on desktops, kiosks, Macs, and more will come. Currently, you can run widgets on some Nokias, Vodafone S60 and Samsung phones, Opera desktop and mobile , the Bolt browser , and Windows Mobile 6.5. The future for widgets and apps based on web standards is bright, especially considering the work W3C is doing with the JavaScript APIs to sensors and services on the phone.

Here is a video explaining how the Facebook widget works on a Nokia N97:

[youtube]http://www.youtube.com/watch?v=h67Mr-kY-0I[/youtube]

So, you can easily create an augmented reality app like Layar using HTML5 and device APIs in the very near future. Good thing about that is that the HTML5 codebase works on more devices than the iPhone codebase.

Summary

I will try to sum this up in a table for your convenience:

	Native apps (iPhone, iPad, Android, RIM, Symbian etc)	HTML5 Apps (Mobile Web, Widgets)
Openness	Open to anyone who signs an agreement	Open for real
Entry Cost	$99/$299/$200 etc.	0
Revenue split	70/30 (Apple) or similar	100% to you
Restrictions	Some	None
Releases	1-2 weeks	Continuous
Micropayments	Yes	Not good enough
Portability	Develop for each platform	The web covers all platforms capable of browsing
Discoverability	You will need a very well defined strategy to break into the top list for your category in order to make it (AdWhirl estimates $1875 per day advertising budget can get you there , Pinch Media says the impact of being in the top 100 is a daily increase of 2.3x in the number of users)	The web is known material, and one big appstore. Search, hyper linking, advertising are common and well known methods.
Market size and reach	Only selected platforms (smart phones are about 50% of the market ).	All internet enabled devices. Cover 100% more end users than a full blown app approach.
Usage of device APIs	Access to most APIs like GPS, accelerometer, address book etc.	Access to some. Like GPS. With HTML5 even more, and soon standardised by Device APIs and Policy Working Group
Maintenance	Difficult to support and maintain after app is downloaded. Multiple codebases to maintain.	Users always gets the latest version. You are in control. One single codebase.
User interface	Close to full control	Limited to the device/browser capabilities and the experience will vary.
Performance	Better	Good
Offline usage	Yes	Yes. With HTML5, Google Gears etc.
Distribution via appstores	Yes	Yes + the web
Icon on desktop/home screen	Yes	Yes, and even the application running on the desktop.
Handling of heavy graphics	Very good	Not good for gaming. HTML5 provides functionality that is more than good enough for inline video and as a “flash replacement”.
Sexyness	Very sexy	The average is not very sexy. Depending on the device and how it is designed.
Icon on home screen	Yes	Yes. As a bookmark opening the browser, or as a widget running directly in the desktop.

Sources; Mobiletech, CloudFour, blog.dudamobile.com

*) The stats here is not very comparable, I know. But good enough to give a picture. Informa has had a closer look and compared different sources in this PDF report.