Much like the internet, apps are set to become an inseparable part of every industry.
Every year, it seems that there are fewer major products unveiled at Mobile World Congress. One of the reasons for this is a desire to avoid being lost in the noise around the event. There are few companies with enough cachet to cut through this noise, Google’s MWC-independent launch of YouTube TV being one example. More importantly, the mobile industry is now much further along the maturity curve. As a result, the industry is now focused on iterating, building scale and targeting new verticals with apps and services rather than new hardware innovations.
Services, Not Hardware, Drive MWC Buzz
One example of the services push was Motorola’s partnership with Amazon for Alexa to become the default “voice assistant” on Motorola smartphones, among the first announcements at MWC. As we saw in this year's Consumer Electronics Show, Alexa has become the flavor of the season. Amazon’s partnerships with Android OEMs come at an interesting time as it coincides with Google Assistant rolling out to Android flagships beyond Google’s Pixel. The competition between Amazon and Google is linked to different business models, but their immediate goals are very similar — to introduce a voice- and AI-first computing paradigm. That said, as we pointed out in our blog post on computing paradigm shifts, it is difficult to see voice interaction superseding the graphical user interface (GUI) on smartphones. Voice interaction constitutes well under 2% of smartphone interactions on Android phones as smartphone navigation and user behavior are well established. Breaking this pattern will be an enormously difficult challenge, even for companies with significant resources and scale.
The focus on verticals beyond mobile hardware was on full display right from the beginning as MWC’s headline event was an interview with Netflix CEO, Reed Hastings. There is keen interest in Netflix’s ambitions because of the way mobile reduces the distance between viewers and live-action content. Users no longer need to be in front of the TV to be viewers — with a mobile device, content is available anywhere. While it’s clear that content will remain king, a key lesson for media companies is that mobile has tilted the balance of power firmly in favor of consumers. With numerous options to choose from, consumers not only expect high-quality storytelling, but also a flawless streaming experience and the ability to watch anywhere and at any time. Falling behind on even one of these levers risks the loss of customers and revenue to mobile-savvy companies like Netflix.
The media industry has clearly been transformed by mobile over the past 10 years, but it is just one of many.
Retail Banking Debuts Innovations to Streamline Mobile Payments
Moving on to the banking industry, Visa announced that it was bringing its Everywhere initiative to Europe in March. This program offers €50,000 cash and ongoing development support to startups innovating in mobile payments. The timing of this move is interesting as the banking industry is currently grappling with the prospect of the recent Payment Services Directive (PSD2) and its impact on competition from fintech startups. We believe that retail banking is at a similar juncture today as telecom was 10 years ago, with major incumbents owning the end-to-end customer experience. However, developer innovation, aided by a PSD2-driven shift to open APIs, will result in "over-the-top" consumer finance apps that offer more convenience and a superior user experience. This will also lead to a shift in perceived value, from incumbents to startups, making it a critical area for investment.
Next, MasterCard announced a partnership with Oracle to develop and scale enhanced in-store payment experiences. This includes Qkr! With Masterpass, a MasterCard app, already used by joint partners like Wagamama and Carluccio’s, that allows users to order or pay for goods and services without having to wait in line or for a restaurant server. This shows that the retail and foodservice industries are waking up to the potential of mobile payments. While the hype cycle originally focused on mobile near-field communications (NFC) payments at checkout, consumer apathy showed that they fell short when it came to easing friction. Instead, it is on-device or in-app payments that made life easier for users. By allowing consumers to place an order and pay ahead of time or while seated at a restaurant, these payment models remove much of the friction associated with the checkout counter. Starbucks has been a trailblazer in this arena, and now the rest of the industry is following suit.
SAP Works to Bring Stronger Apps to the Enterprise
Finally, SAP announced a cloud platform SDK for iOS, in partnership with Apple, that aims to help developers build "enterprise-grade" apps. Enterprise apps are unique because there is rarely one-size-fits all solution. Instead, these apps tend to be built in-house to meet the specific requirements of each workforce and their enterprise systems. And, of course, it still needs to provide a top-notch user experience to get employee buy-in. SAP's partnership allows enterprise developers to spend less time on tweaking the UX and more time on creating the right tools for the job.
Over the past few years, it has become increasingly clear that mobile is no longer a separate vertical but a horizontal that cuts across every industry. In this sense, there is no “app market” just as there is no “internet market.” Much like the internet did, apps are set to become an inseparable part of every industry and MWC 2017 proved that companies are willing to make investments to ensure they are part of this future.
March 6, 2017Mobile App Strategy