The largest gold rush in the history of technology companies relates to Mobile. Investors that can identify this trend and position appropriately in emerging growth companies stand to benefit immensely. The central value to investors relate to companies that help people connect and interact with Mobile apps.
Mobile apps are out to change the world according to Bill Gates and Tim Cook. If they are correct, can the mobile app revolution be stopped? As with websites, today there is an app for just about anything, just as there is a website for just about anything. People are now predominantly using mobile apps over websites. Some analysts even project the mobile internet to be larger than the web-based internet. With this kind of growth come increased opportunities for monetizing the mobile internet and all the activity related to mobile apps. The opportunities are obvious for any companies whose focus is making it easier for people to consume mobile content, namely, mobile apps. Two primary opportunities relate to mobile ads and in-app payments and transactions.
Companies, individuals and developers are being defined by the mobile apps they offer consumers. This is reminiscent of the way websites and social networking profiles have been used to define the public face a company, individual or developer. It is also interesting to note that mobile apps are contending with the same issue faced by websites in the early days of the Internet relating to enabling your "site" to be indexed and found in major search engines. Mobile apps remain hidden unless they are exposed via true search and discovery experiences.
It has been proven in the past by companies like Google that in order for a successful revenue model to exist a company must have a leading search platform and experience. Today's search experiences for finding and discovering relevant mobile apps are being solved by the following companies:
Google's Play (GOOG): Google Play lays claim to being a one-stop shop for all your favorite entertainment. With upwards of 500,000 mobile apps available to consumers, Google's Play marketplace and search property for apps works pretty good. However, discovering new apps that are relevant to your current needs remains a daunting task. Google admits "The most important piece of the piece of the puzzle is about getting your app in front of millions and millions of Android users on Google Play." We should look forward to Google adding greater abilities for discovery along with recommendations for apps. Providing the mobile app owner or developer with the ability to monetize their app experiences benefits Google and its investors. Unfortunately, Google's entire process for revenue on this platform only applies to Android mobile apps.
Apple's App Store (AAPL): Apple's app store remains a preferred index for mobile app owners and developers. Apple CEO Tim Cook gave some updates on the App Store - there's over 400 million registered store accounts, up from 225 million at WWDC 2011. The App Store is now home to over 650,000, with over 225,000 made specifically for the iPad. That's up from 425,000 apps last year, with some 90,000 specifically designed for the iPad. Probably the biggest number Cook shared was the whopping 30 billion apps downloaded in all since the store launched in 2008 - up from the 14 billion downloads Apple touted at WWDC 2011. Cook also announced that Apple has paid out over $5 billion to developers (that's up from $2.5 billion announced at last year's WWDC). However, finding and discovering apps has been a challenge for Apple as shown when they recently raised the white flag and acquired mobile app search company, Chomp. Just as with Google, revenue connected to mobile apps is restricted to Apple (iOS) iPhone and iPad apps.
Mimvi's App Search & Discovery (MIMV.OB): Mimvi prides itself on being the largest search index for mobile apps at approximately 6,000,000 also including web apps. Mimvi crawls the mobile internet and includes all kinds of apps within its search index, including Apple's iPhone, iPad, Google's Android, Samsung and Blackberry apps. Mimvi also offers Amazon-like recommendations under each search result they serve. Mimvi plans to generates revenue with its search results similar to the way Google generates revenue with its search results, including a unique revenue product offered by Mimvi, called MimviLink. They also seem to working on voice-activated search for mobile apps with the same technology that powers Siri. With a leading search platform in terms of the number of searchable apps, Mimvi stands directly in front of a significant revenue opportunity, unless they opt for the same path as their previous competitor, Chomp, which was acquired by Apple. Mimvi's ability to operate on all mobile apps no matter the platform makes it an interesting and compelling investment opportunity especially considering that most any mobile app will run on most any device in the near future including RIM (RIMM) Blackberries.
Facebook's App Center (FB): Similar to Mimvi, Facebook's approach includes Android and Apple iOS apps. However, standing at 600 apps, it remains in its infancy in terms of search and discovery for mobile apps as it has just been released to the public. We can expect them to offer the consumer with some way to find apps as opposed to just browsing a limited directory. Remember when websites we're only found based on being in a directory alone? Facebook will need to advance its search index very quickly if it wants to have any chance at competing in this new mobile internet landscape. Facebook intends to generate revenue by offering paid apps. Mobile apps are defining the future of Facebook as one Facebook employee noted: "Mark is worried that if he doesn't create a mobile phone in the near future that Facebook will simply become an app on other mobile platforms". Others see that Facebook's app center approach could save the company in the future. The investment opportunity should be a little clearer for Facebook speculators in the future.
Microsoft's Mobile Marketplace (MSFT): Microsoft is playing catch-up when it comes to mobile apps and are now offering mobile app developers up to $600,000 to develop apps for mobile devices running Windows Mobile. This seems to be working as Microsoft now commands an index of apps greater than 100,000. In large part, the success of Microsoft's new focus on their Surface tablet device and any smartphones they have in the works, will be dictated by mobile app search and discovery experience they offer consumers. Microsoft is still a sleeping giant in this area. In terms of an investment, Microsoft seems attractive at its current levels as they've seen the future and recognize that its all about mobile.
Yahoo's App Search (YHOO): Yahoo is a major player in this area with a substantial search property enabling search for mobile apps. Yahoo has not disclosed any plans on how they intend to monetize their search property yet. One may assume that Microsoft will be working closely with them on this effort as they already are partnered throughout Yahoo's other search and advertising properties. Yahoo as an overall investment remains highly speculative as continued restructuring adds to its overall uncertainty.
Comparing these platforms with one another results in some very telling data:
Revenue models for standard mobile display ads may not be as mature as some would like but these companies along with other ancillary players have an opportunity similar to Google in the early days of the web in terms of sponsored search result listings, revenue sharing on in-app payments, subscriptions and general mobile app sales:
Vringo (VRNG): Vringo provides a range of software products for mobile video entertainment, personalization, and mobile social applications. The main opportunity related to Vringo connects to their recent positive court ruling which could potentially enable them to receive payment from Google related to a patent infringement connected to search technology. If they receive an overall positive ruling, then we can expect Vringo to do quite well as an investment.
Nuance communications (NUAN): Nuance Communications provides voice-activated searches on mobile devices. They power Apple's Siri app and are involved in many other licensing relationships that positively affect their bottom line. With the unique inroads Nuance is making as a back-end service provider to mobile devices, their positive upside remains clear.
Mitek Systems (MITK): Mitek Systems engages in the development, sale, and service of software solutions related to mobile imaging solutions and intelligent character recognition software. It provides Mobile Deposit, a software application that allows users to remotely deposit a check using their smartphone cameras. As consumers use their mobile devices to conduct transactions, companies like Mitek Systems are front and center in terms of benefiting from mobile payments, a clear win for investors in the mobile space.
As consumers search for and use mobile apps over websites, we can see from the offerings above that leaders in the area of offering consumers maximum choice when it comes to mobile apps and content stand to benefit their shareholders with new forms of revenue associated to the mobile app revolution.