Five Mobile and Tech Predictions for 2012

2011 was a great year for mobile and tech in general.  Free apps emerged as a win-win for publishers and consumers.  Amazon entered the mobile market in a big way.  Apple made it cool to talk to your phone, even without someone connected at the other end.  And Google launched the fastest growing social network in history.  What’s in store for 2012?  Read on to find out.

1. 3-6 Months of BS iPad 3 Rumors

Blah blah blah, retina display!  Blah blah blah, $299!  If your job is to analyze tech companies for an investment bank, you probably don’t know shit about the iPad 3.  Until Digitimes gets the real info from the supply chain in China, give it a rest.  Ditto for iTV, or whatever it may be called, only add 6 months to the timeframe.

 2. Android Tablet Relevance

First, a quick peek at some internal Mobile Deluxe stats for Android and iOS tablet usage.  In Solitaire Deluxe, we allow unlimited game play in the Solitaire Arcade section and monetize with in-game banner ads.  Analyzing the number of ad impressions generated by device size is a good way to get a feel for the relative usage of phones versus tablets.  On Android, only 6% of our ad impressions come from the tablet range.  On iOS, fully 30% of our ad impressions come from the iPad.  So, Android tablets are lagging very far behind.

Why is the tablet ratio important?  Because tablet users over index  in engagement.  The tablet form factor is better suited to situations that can allow for longer play sessions.  How often do you see someone in line at the grocery store pull out their tablet and play a few minutes of solitaire?  Never.  But you do see people on their smartphones while standing in line, riding in an elevator or various other micro-play situations.  Tablets are more of a couch device, used in parallel with other media such as TV.  Also, tablet users are typically more affluent, so they would be more likely to spend money on IAP.

Google’s iPad killer notwithstanding, no one Android tablet is going to prove to be the iPad’s equal.  The good news is that one doesn’t need to.  As with the handset segment, the sum of the Android tablets can combine to compete with the iPad.  The Kindle Fire and other low priced 7″ tablets will provide a significant boost to the tablet ranks in early 2012.  If the larger tablets can find a way to add a little more oomph to their sales figures, the overall numbers should be solid.  More devices = more revenue for publishers.

BTW, if Google really wanted to provide an iPad killer to Android consumers, they would help get ICS rolled out to more devices, more quickly.  The OS experience is the main area where iPad rules the roost.  The hardware form factor for the full sized Samsung Tab was perfect in my eyes.  If the UI worked like iOS, it would have been an equal device.

3. Twitter Transitions to a Media Platform

John Battelle nailed it in two posts.  Twitter is the most interesting of the social media companies, primarily because it is still so undeveloped.  I use Twitter almost like an RSS feed to scan for important news and tech articles.  I also use Twitter to communicate with friends and converse with colleagues.  When I get really brave, I click on the trending topics just to see how creative one can get with the English language.  Twitter has a multitude of facets and can be used by different people in different ways and still remain part of the unique Twitter experience.

In John Battelle’s second post on the Free Radical nature of Twitter, he plants a very interesting seed in the last three sentences.  The transparent and egalitarian nature of Twitter allows for conversations that could not otherwise happen.  Sure, there’s about a .001% chance that Bill Gates will respond to your tweet, but there’s a much better chance that Alton Brown will.  Twitter drips with the potential to evolve into something even better.  I can’t tell you exactly how, but I would bet that Twitter will end 2012 looking a lot different than it does now.

4. Mobile Publisher Consolidation

Mobile 1.0 went through a consolidation phase in the mid 2000’s and reached a level of relative maturity with a handful of major players (Gameloft, Glu, EA, Dchoc) dominating the space.  The combination of smartphones, free apps and open markets (iOS and Android) has created the Mobile 2.0 games space.  There are now a significant number of independent iPhone and Android publishers that consistently get multiple games to the upper echelon of the Top Grossing chart.  EA, Gameloft and Glu are still big players, but they do not dominate the way they did when Verizon’s Brew deck and AT&T’s J2ME deck were the biggest streams of revenue around.

Storm8/TeamLava, Backflip, Tiny Co, Pocket Gems and some other companies are under the mainstream consumer radar, but kicking butt and making serious money.  Storm8 has pulled at least one $1MM IAP day.  Backflip has seen DragonVale hang out in the Top 10 Grossing apps since its launch in mid-September.  However, a lot of these companies find themselves in a no-man’s land, where they make too much money to be a value acquisition for a big publisher, but not enough money to IPO or pull a JAMDAT.  Top tier independent publishers will be looking to acquire smaller publishers to grab market share and bulk up.  The second tier of indie publishers are still profitable and growing, but not to the extent of the top tier.  These are the publishers most likely to be snapped up by the Zyngas and Googles (and Storm8s and Backflips) of the world.  They have tremendous growth potential, but are still in the $20MM – $50MM valuation range.  Patents, tech advantages and scalability will be the key differentiators for the second tier of publisher.

5. User Acquisition for Mobile Takes Center Stage

Now that (almost) everyone is on the same page and cranking out free apps, the game has shifted to acquiring as many users as possible for as cheaply as possible.  Apple and Android only promote a limited amount of apps each week.  Publishers are responsible for driving their own traffic, for the most part.  User acquisition channels (Ad networks, Pay-Per-Install providers) are getting more and more crowded.  More demand for users means that User Acquisition prices are bound to rise.  Monetization enablers will still play an important role, but I expect to see a steady stream of new entrants to the user acquisition game.  Expect to see the mobile-specific game networks (OpenFeint, Mobage, Papaya, Playphone) tout the size of their user base and the ability to drive installs as key features.

Another trend to watch for in 2012 is an increase in the number of branded free apps.  Free has eliminated the barrier to entry for downloading an app, but it is still tough to get noticed in today’s massive marketplaces.  Brands can provide a differentiator that will pull users into an app.  Smurf’s Village was the first app to show the power of applying a good brand to a complimentary style of gameplay.  The results were spectacular.  Family Feud & Friends has been climbing within the Top 100 Grossing and is now a consistent Top 25 performer.  It will be interesting to see which brands are able to pair up with the correct gameplay styles and make an impact.