I agree entirely – the ODP market is clearly maturing and commoditising. The value is no longer in simply rendering a portal on-device, but on value-adds like visual voicemail, mobile app stores, customer self care apps, idle-screen based discovery etc.

It’s unfortunate that the term ODP has been stretched to cover many more uses of client software (other than portal use) – but that’s natural as on-device software is being used by operators to deliver lots more services and ODP has been a reliable moniker to use from the portal-only era.

Andreas

About ODP market; what I see is evolution in positioning, in this process some vendors will survive and some will die as a consequence of survival of the fittest.

Decrease in the number of vendors( whether its merger&acquisition or bankruptcy) doesnt mean ODP market downsizing but maturazation. High expectations gravitated towards sensible targets, no pain no gain:)

Here, there is problem of “ODP” term differs for everyone, simply it is not what it was before and still changing.

Israfil

There doesn’t need to be a killer app – it’s enough for each user to find the app that’s right for them. That’s the difference between the network-centric economy of yesterday and the person-centric economy of today.

Guy,

Good point. OEMs will still want to integrate the best applications at the pre-load phase. But I ‘m convinced that the revenue model balance is shifting to per-install, per-user or per-use revenues as opposed to pre-load per-device revenues. It’s more about when as opposed to where the revenue is made.

- Andreas

the problem with post-install soft is that…. no killer app found yet

yes, opera mini reaches 20M unique monthly user, but no other success here(let’s not count the web2mobile like mobile msn ,etc)

iphone/gphone/nokia/rim/ms app store reduces the promotion cost for developer ,let’s see if real killer app would come out of it

Very good and thoughtful article. The one point I want to add is that the logical path that is painted by this scenario is that as downloadable SW gets better and discoverability and ease of download improves, perhaps handsets will start shipping as a Vanilla build with only basic features, and then users will download SW as they please to get any functionality they need. This is perhaps how PCs are perceived. However, the Mobile reality is that even if there is pressure on the royalty model, the companies that ship devices differentiate them by more and more built-in and integrated software. So as the quantity and quality of downloadable SW increases, the quantity, size and quality of pre-integrated SW rises in parallel- just check the built in memory growth on all phones. Strategic technologies or applications may start as a downloadable version but if e.g. Nokia thinks an app is strategic, it integrates it into the platform and ensures it is an essential part of the built-in user experience. It seems also that optimized user experience involving interaction of a holistic UI with multiple applications requires pre-ship integration and is more difficult to achieve post-ship by an external party.

Therefore it seems to me that there will still be increasing demand from device makers to interate the best applications and UIs into the device software. It’s just that the business models of how to monetize this value by suppliers will pehaps have to change from royalty that impacts BOM to perhaps on going usage based models and pehaps upsells and upgrades? what do you think?

Guy

It has generally been considered that getting users to click-n-download apps results in very low conversion rates – circa 1-2%, even if the app is free. However, the success of App Store, followed by BREW, Get Jar and Handango is proof to the contrary; if the application is easy to discover, download and install, the conversion rates are much higher – for example Get Jar records around 17M app downloads per month and increasing by 1M per month (admittedly it’s difficult to compare this to a conversion rate though).

My thesis is that discoverability and transparent download & install process is one key requirement for take up of application downloads. The other is a transparent billing relationship, i.e. a one-click buy which is via CC or operator billing today.

To address your point, I expect many users sideload their PC apps from friends, but then again the pricing for PC apps is typically upwards of $10, often $100 and up for app suites. On the contrary mobile apps and content are typically priced in the $1-$5 segment. We have seen how users have adopted SMS when pricing has been reduced or bundled, generating 6.5 billions of SMSes per month in the UK alone. One should note that our behaviour (and purchase decisions) when on a mobile phone are different to when using a PC. Spontaneous behaviour and impulse buying is more readily associated with use of a mobile phone than a PC.

Overall, the user motivations behind app downloading are related to both ease of download/install and the pricing. It is far too complex a subject that would require focus groups and user research to understand in detail. But the examples of App Store followed by BREW, Get Jar and Handango are very encouraging.

- Andreas

Quite a few ODP vendors have transformed into lightweight service delivery platform variants and quite a few have disappeared – as covered in the article. Whereas there were 30 or so pure play ODP vendors at the hype curve climax, only a handful remain today.

Also to clarify – ODPs and generally service-driven client software tends to be more effectively monetised through a per-active-user model rather than a per-unit model – which is how the loss leader reference applies.

Andreas

However, what happens to the pure-play ODP Vendors. We have seen one company go bust (ActionEngine), but what happens to the other 30-40 companies in this space who are still hanging on… Most of these companies are start-ups and if their main product (the ODP solution) is commoditized, how do they manage to keep afloat?