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In July 2009, a milestone was reached that illustrated an important change in the mobile marketplace. Just one year after its launch, 1.5 billion software applications (also called “apps”) had been downloaded from the website of Apple Inc, for use on the iPhone or iPod “Touch”. This tremendous (and unexpected) boom has led more and more handset manufacturers, mobile network operators and suppliers of mobile operating systems to join in to capitalize on growing consumer demand.

Mobile apps are add-on software for hand-held devices, such as smartphones and personal digital assistants (PDA). Research firm Ovum expects the market for smartphones to grow by 23 per cent in the period 2008–2009, against an overall decline in the total mobile phone market caused by the economic crisis. Smartphone shipments are forecast to reach more than 400 million by 2014, nearly all capable of running apps from at least one store.

However, as more smartphones are sold, the creation of mobile applications to run on them is constrained by the fragmentation of the market between different platforms. This is one of the issues examined in a “TechWatch Alert,” ^* published by ITU’s Telecommunication Standardization Sector (ITU–T) shortly after the milestone was achieved.

What is an app?

In the beginning, a typical application would be purely for entertainment: a game, perhaps, or something that turns the screen of your phone into (for instance) a functioning piano keyboard. Recently, though, useful apps have become more popular. These include programmes for tracking expenses, foreign language phrasebooks, and currency converters. Other apps provide reviews of nearby restaurants, lists of local events, or audio walking tours of tourist sites.

Such localized content is an important element of the app environment. Its creation is supported by the ease with which software developers (many of them amateurs) can produce an application and have it placed in a store for downloading. Although many of these creations will have a limited market, they are relatively simple and cheap to produce, by using the software development kits supplied by manufacturers.

A list of some of the platforms for mobile applications is given in Table 1. They use at least one of a device’s communication interfaces (such as Wi-Fi, WiBro/mobile WiMAX, GSM/EDGE, W-CDMA/UMTS/ HSPA, or Bluetooth), as well as — in some applications — a device’s audio and video processors, camera, or satellite navigation capability.

A study produced in May 2009 by Gravitytank (a market consultancy firm in the United States) showed that 69 per cent of smartphone owners they surveyed had installed an application in the previous month and that users had an average of 21 installed applications, of which about a quarter were paid for.

Many applications are offered free of charge, in order to win new customers for a future paid application; others are for customers of an existing service, such as a newspaper subscription.

Commercial opportunities and challenges

In most cases, mobile applications are created by third-party developers, but store owners take care of distribution, payments and limited marketing, in return for around 30 per cent of the price of downloads that are sold. This is potentially very profitable for the stores (and leads to higher sales of hardware). Developers too are finding more ways to make money. The latest upgrade of the iPhone, for example, allows developers to sell premium content or services within their apps, using the store to collect one-off or subscription fees. Additional revenues are promised by the mobile marketing that is starting to take off, in the form of branded applications.

However, some mobile network operators fear “cannibalization” of existing services and are therefore restricting such applications as:

• Voice over Internet protocol (VoIP) apps that challenge conventional phone calls

• Instant messaging apps that challenge the short message service (SMS)

• Apps that speed up surfing and so reduce online traffic.

In addition, the fear of malware makes vendors hesitant to give developers direct access to the core functionalities of a device.

Variations or ambiguity in these restrictions, as well as the lack of interoperability among platforms, are obstacles to development of the mobile applications market. Products written for one device must be rewritten for another, since application programming interfaces (API) and software development kits are specific to each of the major platforms. This means that it takes longer for an app to appear, and prevents customers from using apps on a range of different devices.

The good news is that attempts are under way to unify the mobile ecosystem. For example, the open-source “Android” operating system has been developed by the Open Handset Alliance, which has 47 member companies. Another industry forum, the Open Mobile Terminal Platform, aims at “simplifying the customer experience of mobile data services and improving mobile device security.” It recently published the “BONDI” specification, which defines interfaces for secure access to the core functionalities of a device from its web browser or user interface.

This avoids developers being locked into one particular platform and enables them to write applications for all handsets using BONDI.

The GSM Association’s “OneAPI” initiative seeks to define a commonly supported API, so as to allow operators to disclose information about, and the capabilities of, their mobile networks to application developers. The API supports the creation of content and applications that are portable across the networks of different operators, and provides a common interface for messaging, location services, user data, connection and charging.

ITU has contributed to the considerable success of mobile communications and applications, including through its role as the global manager of the radio-frequency spectrum, as producer of the IMT-2000 family of standards (3G), and as pioneer in the IMT-Advanced standards (beyond 3G). A unique international mobile subscriber identity (IMSI) conforming to the standard ITU–T E.212 is stored in each SIM card and used for identification when interconnecting between (mobile) networks. Many handsets carry implementations of ITU–T Recommendations; for example, speech and audio codecs, such as G.718 or G.722.2 and the multimedia decoders for H.263 and H.264. Many also conform to handset specifications in the ITU–T P.300 series of Recommendations.

Software developers are demanding lightweight standards and interfaces that are easily understood and can be adopted in their applications. An increased focus on standards for open and interoperable API would help mobile applications to grow, offering a huge variety of services to millions of people.

* “Mobile Applications” is the first publication in a series of TechWatch Alerts. It describes the mobile application market and identifies initiatives that aim at creating standards for an open and interoperable mobile environment. Alerts are intended to provide a brief, but concise, overview of emerging technologies and trends in the ICT field. “Mobile Applications” can be downloaded at www.itu.int/ITU-T/techwatch/reports.html. Techwatch Alerts are prepared by the Telecommunication Standardization Bureau (TSB).