By Ajit JAOKAR

Android – iPhone revenue models: Can 70 plus 30 equal free? – Is the future of mobile apps free or fee based?

The iPhone has a simple revenue share model – 70 percent to the developer.

Considering Google’s developer friendly credentials, one would have hoped for something along the same lines .. But disappointingly – that’s not the case .. Because the revenue share depends on the agreements between the carrier and the developer.

Moco news points out that It will purely be an arrangement between the carrier and the mobile app developer. It is unknown what the revenue-share agreement will be between the carrier and a developer.”

To me, this is not a good development in the short term and needs to be clarified in the long term.

It appears that Google is working on the equation that 70 plus 30 equals free i.e. instead of the 70 30 model adopted by the iPhone. Also, Android itself appears to lean to free (ad funded model) for all mobile applications.

Here is why:

1) In terms of data usage and subscribers, I do not believe that individual Operators can have a large enough user base to make a commercial difference to a developer.

2) Individual agreements between developers and Operators are not feasible for Long Tail applications when most of the applications do not make a lot of money in the first place.

3) Also, we start to get fragmentation immediately(for example if developer gets 70 perc for supporting x devices and 50 percent for not doing so etc etc)

All this means that (at least) initially, free applications will proliferate.

This makes little difference for Google since every element of Android is a Mobile web 20 element – (because every element of the stack is capable of creating metadata – all of which can be harnessed towards targeted advertising – just like Gmail)

Hence, Google has a viable economic model but I do not believe that small developers can survive on an ad model alone(and further it is likely that operators may want a share of the ad pie as well)

On the other hand, Android may provide a genuine opportunity for operators to start with a clean slate. Apart from the Korean and Japanese operators, none of the operators have built viable portals. Android offers the choice to start with a clean slate and attract developers and to create a viable ecosystem.

Android raises a broader question is : Are all mobile applications likely to be free(ad funded)?

If we consider the example of the iphone, so far paid iphone applications have not fared well.

So on one hand, while we worry about the contrast between 70 30 and free, we have to consider the broader question of – which mobile applications will users pay for? And the answer is not very clear cut ( see this post where I say that we may have to adopt Kevin Kelly’s principles to the Mobile ecosystem ).

Longer term, I see an irreversible trend with more value being abstracted up the stack, multiple payment systems(Paypal and Google checkout), multiple networks(Wimax, WiFi and so on) – but the short term is unclear.

William Volk makes an interesting point when he says :

“The problem isn’t just the revenue share. It’s that Google, by handing off the sale of paid apps to individual carriers, have added an element of ‘friction’ to the entire publishing process:
With existing content sales carrier terms are typically net 60 to 90 days.
What’s more if you sell in multiple territories, then you will have to deal with multiple carriers.
Also, while there is an unfettered process for free apps, paid apps will certainly be subject to a review and approval process if for no other reason for issues of insuring appropriate content. What will that approval process entail?”

So, Can 70 plus 30 equal free? To me, it seems that Google is going towards Free and not a revenue share model.

A new survey has revealed that people are more interested in social networking sites than online pornography.

Facebook can ‘completely obliterate’ social lives
Bill Tancer, a self-confessed ‘data geek’ who analysed the search habits of more than 10 million web users, said that internet searches provide an up-to-date view of how society is changing.

“There are some patterns to our internet use that we tend to repeat very specifically and predictably, from diet searches to prom dresses to what we do around the holidays,” said Mr Tancer in an interview with Reuters.

His research reveals that elbows, belly button fluff and ceiling fans rank among the things people fear most, as do social intimacy and worries about rejection.
He also said that internet searches for anti-depression drugs peak around the November Thanksgiving period in the US.

“As social networking traffic has increased, visits to porn sites have decreased,” he said.

A decade ago, porn-related searches accounted for 20 per cent of all internet searches made, he noted. They now account for about 10 per cent, said Mr Tancer, who also found that web users aged between 18 and 24 were searching for less porn.

“My theory is that young users spend so much time on social networks that they don’t have time to look at adult sites,” he said.

Mr Tancer, a general manager at global internet research company Hitwise, has written a new book, entitled Click: What Millions of People are Doing Online and Why it Matters. In it, Mr Tancer notes that celebrity websites get more hits than sites devoted to religion, politics, wellbeing and diets combined.

He also warns that web users are searching for pictures of the US Republican party’s vice presidential candidate, Sarah Palin, rather than information about her policies.

“A lot of the focus around the candidates in general is image-based. People want to know how tall Barack Obama is,” he told Reuters.

“You have to get far down in the search terms to link the search for a candidate with any issue.”

Mr Tancer also noted that in some instances, the speed of dissemination on the web had led to the spread of disinformation.

“With the explosion of thus type of false information on the internet, I think we will see someone come forward and develop a new type of software that can filter for the most accurate information. “Maybe accuracy is the next thing we will all search for,” Mr Tancer concluded.

His comments come just days after Sir Tim Berners-Lee, the creator of the web, called for a system to be put in place to rank the trustworthiness of websites, and launched a charitable foundation that seeks to bring the internet to a wider audience in developing nations.

I must say that I am excited. I am stoked because I love my iPhone but an only Apple world is scary, now we have a challenger. The so called iPhone killers I have seen until now were lots of hype but basically not iPhone killers. Google’s G1 isn’t necessarily a killer either but it is a nice alternate. An choice let us say. And now that there is one there will be more.

Co-developed with T-Mobile, this new handset will the first mobile device powered by Google’s open-source Android operating system. Like the iPhone, this new device will offer a large touch screen similar to the iPhone, a 3.0-megapixel camera with photo-sharing capability, a trackball, a slide-out keyboard and easy access to Google’s email and mapping programs.

As the video here shows it is a very, very intergrated with Google experience…

Will people want to be so stuck to Google.. not just search but Mail, Calendar, Talk ? That is certainly what Google hopes. Obviously they are leveraging this to get people to abandon their old solutions and use only Google’s. But it remains to be seen if it will really work. Not so different then Apple after all..

The device will be available at T-Mobile stores and online in the U.S. beginning Oct. 22, with a price tag of $179 with a two-year voice and data agreement. It will hit Europe shortly thereafter.

Here are some other shots that show the phone at different angles :

I noticed this article in my recent overview of world news. I have often written on MobilOpen how the developing world is leading the charge in use of the mobile phone. Just last week I reported on these pages that India was reaching the 300 Million mark of mobile phones subscribers. Here is how they use their phones…

Not just to call.. no they use them as multimedia devices that video, email, text, chat, and accompany them in there daily life. Here in this article you can see how Kashmiris, whatever you may think of their position, are firmly part of the mobile internet sphere. It seems to me that the openess that the internet started to spawn and access to information that is available in the West is now accelerating around the world via.. yep you got it mobile devices.

This presents a huge opportunity to mobile internet entrepreneurs and executives, now truly products and services need to take into account users around the globe. This requires thinking globally and finding the right business model for each region. Till now except some exceptions like MyGamma, GetJar, TexoMobile, Pepperoni and a few others services were for one or 2 markets or at most for the West in the broad sense of the term. But that has to change. There is a whole new market out there.

mobiSiteGalore one of the pioneers of the mobile web with their PC based mobile site builder have taken their tool to the next level, they have taken the guts from their builder and made it accessible to mobile only users.

Now anyone with a mobile connected to the web with a GPRS connection can now create their own mobile site. No fancy smartphone needed either a normal WAP phone will do just fine.

I got to give it to these guys.. they are in my view spot on in their creation of a tool accessible to the masses. As I reported in my last article millions of new users are getting their first mobile : close to 300 million users in India and the same in many developing countries. These new users want to taste the web and don’t have access to PCs so they do what Pc users would do except from their mobile. And one of the things people want to do is create their own site to talk about themselves, to meet people, to promote something or to sell something. This is the first step in that direction.

There are other site creators but they are more based around a community, they are more profile like or blog like. Whereas mobiSiteGalore allows users much more freedom in what they want to create. I am looking forward to see how users like their tool.

India reaches ever closer to the 300 Million mark with 6.3 million new users in August. At this rate it will be before the end of the year that they will hit that magic number.

With all the consolidations there are 4 major players and then as the graph below shows 3 smaller challengers with a couple of very small players. This means that competition will remain stiff and mostly the eldorado for the Mobile Internet players of the world maybe.. great data packages or even unlimited packages will be in the mix.

India is already the second largest market after China. What is exciting is that unlike China, Indian users are part of the global community of Mobile Internet users. Most mobile community services like iGloo.mobi or itsmy.mobi experience a large part of their traffic already from sub-continent users.

Picked up this announcement from Google about their new mobile location based search service. They call it “Search with My Location”. It only works on Windows Mobile phones but it is a very cool app no doubt.

Previously, when you went to google.com from your phone’s browser and performed a local search, the results were tailored to the last location you entered. Now, using the Gears Geolocation API, Search with My Location approximates your actual location using the same Cell ID technology used by Google maps for mobile. So if you want to find sushi nearby, just type “sushi” and Google will return local business listings around you. If you want to know the forecast, type “weather”. If you want to search somewhere else, specify a location in the query like “pizza Kansas City”.

Initially, Search with My Location will be available in the US and UK. To get started, visit google.com from your phone and click on the My Location link under the search box (you may have to refresh the page to see the link).

Swype is an amazing gesture-based data entry system that is truly revolutionary. To type a word, you simply connect letters together using a stylus or finger and predictive text to pick letters and words out of seemingly unintelligible squiggles.

The inventor of the ubiquitous T9 tool, which is installed on a billion plus phones, is one of the founders : Cliff Kushler. There are some hold outs against T9 but generally to send a long SMS or to type your mobile blog if you don’t use T9 your masochist. Nevertheless T9 is on the way out with touch screen mobile devices. The iPhone uses the app Shapewriter but the Swype system is substantially more robust and very powerful. It works on Windows Mobile and Windows right now and will soon be available for the iPhone.

Swype works with an on-screen QWERTY keyboard like you have on the tablet version of Windows and on the iPhone. But instead of tapping letters out, you press your finger or stylus on the first letter, then, without lifting it, move it to the remaining letters in the word. When the word is done, then you lift.

A built-in 65,000-word dictionary corrects obvious and even creative spelling errors. A word menu pops up if the correction is somewhat ambiguous; in our tests, the top choice was usually correct, and it can be selected with a simple swipe upward.

Little tricks make it possible to capitalize words (jerk the stylus up and down) or select double letters (wiggle the pen over a letter).

The development team is focused on Windows Mobile (smartphones) and also the tablet version of XP and Vista, and Surface. However, Kushler mentioned how great the iPhone hardware was for his method.

The great news for the millions of mobile users out there is that they may also develop Swype for Symbian.

See the interview and demo with Kushler here:

Dynamic Logic, a leading marketing research company with expertise in measuring advertising and marketing effectiveness, has released new research which indicates that mobile advertising can be “an effective medium for raising brand metrics throughout the purchase funnel.”

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Dynamic Logic completed over 30 AdIndex for Mobile studies. These are survey-based research that are conducted in a live, in-market environment, and ran simultaneously with specific mobile advertising campaigns. This approach is used in order to isolate the impact of the mobile ads on key brand metrics. (read more about AdIndex for Mobile).

When comparing people that have been exposed to a mobile ad with those who have not been exposed, the results indicate that mobile advertising can be very effective for brand building purposes. For example, an observed increase in ad awareness of over 29% indicates that these campaigns “generally cut through and grab the users attention”. An increase in Brand favorability of over 5% shows that mobile ads have the capability to influence people’s attitudes.

“”

The study was quite broad-based, and it included information from brands in many industries. These industries included Alcohol, Automotive, Consumer Electronics, CPG, Entertainment, Financial Services, Retail, Telecom, and Travel.

Read the full release on the Dynamic Logic site.

Google announces via their mobile blog a number of ways to follow the nail-biting US elections.

They announce a one stop shop for your mobile electoral needs with feeds and the latest breaking news. Here are the links so you can check it out yourselves :

Ok true it isn’t anything fancy.. but it works, is functional and most of all it means that finally these guys are getting it.. They also have links to the personal YouTube channels of Senators McCain and Obama :