A while ago I read this interview with Google VP of Engineering Vic Gundotra (read the full version here ). To summarize, Google believes that in the long term all mobile apps will run on the browser and not on native code.
For context, the iPhone has shown us that the mobile device experience boils down to internet browsing and apps. To date, by far the largest winner in mobile apps is still the iphone with 50K apps and counting and over 1B downloads, despite efforts from other players to open up their own app stores, including RIM, Android, Nokia, and oh yeah, Windows Phones. Apps developed for the iPhone are coded in native code, which means they only run on Iphones (or Ipod Touch)
So if you are Android there are two clear choices (maybe there are more, but at the moment I can’t think of any). Either you, a la Microsoft, create your own app environment, open up a store, and attract developers running a sweepstakes (sorry, a contest). Check!
Or you dilute the game a little bit by introducing another marketplace of heft, by doing so creating another viable alternative for developers, diminishing the intrinsic value of each of the other available marketplace one can develop on, and creating confusion. Also, Check!
But this second choice, which was reviewed on Saul Hansell’s article in the NY Times last week, is far more insidious than what meets the eye. By lowering the intrinsic value of all native code marketplaces, Google props up the value of cross-platform alternatives, ie the browser. Which brings us back full circle to Vic’s comments.
As it turns out, the browser is Google’s house. Google rules the browser, it is its native environment. So as Tsun Tsu would say (and I am sure if he didn’t he probably did not get to it), by wooing apps to the browser Google will fight in familiar territory. In it, Google will turn on its monetization engine and the game will be over.
However there are a few hurdles to overcome. First of which, if mobile follows the PC, browser-based games (ie flash games, etc) tend to be good as casual games, which is also the type of game downloaded on the mobile (over 80% of downloaded apps are games). Also the ecosystem only supports $.99 apps, for which only casual games can be developed. But if the mobile phone is to evolved the way the PC did, games on the phone will soon become more complex, graphics will be better and the experience will trend towards immersive. In this scenario, browser games have not done well – just look at the PC.
As for the rest of the apps, the jury is also out. Latency, security, and other issues will, at least in the short and medium term, prevent browser-based apps to flourish to its full potential.
On a subsequent post we will analyze what do the winners look like in this market dynamics.
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