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Announcing, the App Phone

The App Phone is about to create waves in the world of mobile computing … again.  The original App Phone – the iPhone – is purportedly the most successful gadget ever ever.  Now, Verizon will shake things up  with Droid, which runs on Google’s Android operating system and which, like the iPhone before it, is likely to have a significant impact on the mobile web.

App Phones illustrate the complexity of mobile web competition. It’s the killer phone, not the killer app – but it’s also the app that drives demand for the phone.  And to further this complexity, the competitive impact of App Phones and certain smart phones now reaches into other device markets thanks to powerful mobile web applications that mimic functionality seen on other devices.  And the most successful applications eventually get assimilated within the device itself, leading to a next generation of innovation in this dynamic market.

This is well illustrated by GPS – a must-have feature in today’s advanced smartphones, especially App Phones.  Until a couple years ago, GPS-navigation devices were sold separately from phones or smart phones.  But today, GPS mobile applications can give certain phones the same GPS functionality as an advanced (and pricey) standalone GPS device.

Droid will be the first phone to include Google’s GPS Service for mobile phones – with innovative features like voice-activation, turn-by-turn directions and live traffic updates.   The feature list should be enough to make GPS device makers cringe; the fact that Google is now offering the service on a free (eventually ad-subsidized?) basis makes the competitive picture even more interesting.  In fact, news of the Google GPS announcement recently sent shares of GPS device makers Garmin and Tom-Tom into a precipitous plunge.  It’s unclear what the future of pricey standalone devices will be – particularly if consumers can get that same functionality for free on their App Phone.

Innovations like GPS navigation are just one of the forces that are shaping mobile and App Phone competition.  There are other forces that are important to the future viability of this market – such as wireless broadband availability and deployment.  And then there’s the regulatory concerns with privacy on GPS enabled mobile phones as seen in the FTC’s report on mobile commerce issued earlier this year, as well as the much publicized interest by FCC Chairman Julius Genachowski in regulating a wireless market which he sees as being “all about mobile.”

Regardless of how mobile computing and App Phones evolve, it’s likely that these advances will continue to benefit a great many people.  The fact that voice-enabled GPS will be available for “free” will likely stoke consumer interest and demand for such features in future devices.  And advanced devices like the App Phones will continue to lead the explosive growth in mobile internet (which continues to outpace desktop internet adoption).   In many emerging economies, the phone is already a cornerstone of growth thanks to its portability and the power of today’s mobile applications.  In Kenya, for instance, mobile computing is replacing a national banking system, and allows villagers to send and receive money without a bank account.  Within this framework, the possibilities for App Phones are endless.

For now, I’d be contented with voice-activated GPS on my phone that actually works.  That’s why I look forward to purchasing my first Droid tomorrow.

In the interest of full disclosure, I am currently a Verizon Wireless customer who looks forward to purchasing her first Droid.  I do not have a business or client relationship with Verizon or any other company mentioned in this post.

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  1. November 6, 2009 at 4:06 am

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  1. November 10, 2009 at 7:24 pm

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