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Facebook’s latest acquisition serves as a lesson to mobile app developers

Overshadowed by AT&T’s proposed takeover of T-Mobile, Facebook announced that they acquired mobile application developer Snaptu for a cool $70m.  Facebook’s CTO recently said in an interview when discussing prioritizing mobile platforms:

It’s incredibly challenging. You end up picking and choosing platforms even though your goal is to reach everyone

In this case, Facebook decided not to pick and choose, but to spend $70m to ensure complete device coverage.  Nice strategy, although it does not work for everyone that does not have a similar war chest. But what it does show that as an app developer, you simply cannot focus on one or two platforms to succeed. Yes it is hard to develop for multiple platforms, but that is what consumers expect now.  For instance, if you are a financial institution, that are seemingly going “app-crazy”, how will you explain to a BlackBerry customer that they can’t use your app while an iPhone user can?  It simply does not make sense.

Furthermore, you ignore the non-smartphone market at your peril. Your addressable market should be based on mobile data plan penetration, not smartphone penetration, as availability of data plans is key.

Research from Asymcoshows that there are 800 million developed country subscribers who have yet to upgrade to mobile broadband, and there are 3.5 billion(!) developing nations subscribers who do not yet have smartphones nor mobile broadband. Clearly, the opportunity will be huge, and you must keep in mind that feature phones are perfectly capable data phones, but it must be easy for users to get access, hence data plans are key. A good indicator to look at when determining a market’s attractiveness for your applications is to look whether data plans are offered to pre-paid users. That will indicate that mobile operators are serious about mobile data.  So start figuring out your porting and distribution strategy now, but don’t think you can follow Snaptu’s path to success, as only very few companies will pay that much for handset penetration on a few apps. The smart companies will soon figure out how to more easily support more handsets by using proper tools and having complete device support will certainly not cost $70m…

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3 Responses

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  1. Gour says

    Enjoyed your post. You might be interested to check out biNu at http://www.binu.com.

    We are great admirers of Snaptu and congratulations to them.

  2. Madmax says

    Heard of the 80/20 rule JT? Where you have the 20% of mobile users (iOS & android) who purchase 80% of the content. It makes sense when app developers focus or prioritize their limited resources on the 20% that actually are purchasing the apps. It’s also been shown that smartphone users spend a lot more then users that can’t afford one to begin with.

    In terms of the financial appcrazy institutions, people are lucky in the first place that they are even developing for any smartphone (iOS). iOS gives them the wow factor that they are looking for without having to sacrifice functionality. It would be pretty cumbersome doing the check deposit from chase iPhone app on a blackberry if possible at all. So like other platforms, your going to have to upgrade to access more functionality.

  3. jtklepp says

    I totally get your point, and the 80/20 rule may have worked when there were <50k apps in the appstore. But if you are betting the farm on one O/S now you are in trouble. Secondly, as people move across platform, they will expect that a service they had on one device is available on the next. If they are not, they will have a negative view of you as a company.

    The whole notion of a smartphone and a smartphone owner will eventually disappear. At some point, we’ll call them all phones again, and everyone will be “app savvy” and expect that a phone can do a certain minimum of functions. Facebook figured that out – others will too.



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