One of the most highly anticipated aspects of Apple's (NASDAQ:AAPL) upcoming release of iOS 6 this fall is its enhanced App Store. The new App Store will offer an improved interface for mobile users with large swipeable cards that offer much more information on each app found. Apple's new search tool will also put more emphasis on its "Genius" feature by putting it front and center at the bottom of the interface, instead of being hidden in the "Featured" section. The Genius will utilize data it has on apps you have already downloaded to recommend other apps for you.
With the massive proliferation of mobile devices and apps, enabling users to find the app they actually want has become a critical business opportunity. According to the tracking firm Mobilewalla, there are more than 1.1 million apps currently available for smartphone users. The opportunity then obviously becomes helping users find the app they are after. Jupiter Research estimates that revenue for the apps business will rise from $30 billion in 2012 to $52 billion in 2016 and a recent Nielsen survey found that 63% of Android and iOS users have used search tools to find new apps. App search and discovery is a not only an excellent business opportunity, but also a vital part of this growing market.
Apple has not been renowned for the quality of its search in the past and the App Store has served up apps more on the basis of quantity of downloads than anything else. A major overhaul of the search system is desperately needed.
The company admitted as much when it purchased Chomp earlier this year for $50 million. The new App Store will reportedly feature key new search functionality with much more emphasis on recommendation and discovery. However it remains to be seen whether Apple will provide BOTH, an easy, intuitive experience - which is their forte - AND a quality search tool that will allow users to find apps that are customized to their actual requests and desires.
Other App Search Players
The other two big players in app search, discovery and recommendation field are Quixey and Mimvi (MIMV.OB). How the new App Store will affect these two companies remains to be seen, but both of their products offer unique advantages over Apple's app search tool. To begin with, both of the companies' products search across Android, Windows Phone and the iOS platforms, whereas Apple's tool is obviously closed to all but the iOS platform. Secondly, both Quixey and Mimvi's tools have an established emphasis on the increasingly important arena of app discovery and recommendation. As the sheer number of apps explodes, the ability to do more than simply trigger "first-level" search results becomes more vital. Being able to recommend apps based on a variety of complex factors is becoming more and more important to the user.
Quixey is a strong player in the mobile app search arena with an app search engine that searches for apps on iOS, Android and Windows Phone platforms. Their so-called "functional" search engine not only scans the major app stores, but also searches blogs, review and social media sties to generate a total picture of what an app can offer. In June Quixey raised $20 million in second round funding, which, in addition to capital it had raised in 2011, brings its total investment to over $24 million. With the funding, Quixey plans to expand the software's ability to discern what functionality a user is looking for without relying on exact keywords. The company is also looking to sign deals with mobile carriers to include their software with smartphones.
Mimvi has been called the "Google of mobile search platforms." It's search, discovery and recommendation engine has become a leading platform for providing search services for mobile apps, mobile content and mobile products across all platforms including iPhone, Android, Windows and Blackberry devices. Mimvi also offers Amazon-like recommendations under each search result it presents. Another unique feature of the software is that it allows users to type in the name of an Android app and the engine will find similar iOS apps for them and vice versa. This kind of cross-platform functionality could become increasingly important as the number of mobile devices and apps continue to expand. The company plans to generate revenue with its search results similar to the way Google generates revenue with its search results. This model includes a product called MimviLink, which provides a way for users to access mobile apps related to the content they are viewing on the web. MimviLink will allow any company with a mobile app to gain greater exposure for that app, by having it matched and displayed next to pertinent web content.
Beyond Search and Discovery
There is, of course, an entire ecosystem of companies building mobile apps, mobile marketing solutions and payment and distribution systems that also bear a closer look. Two such companies in particular are Augme Technologies (AUGT.OB) and MEDL Mobile Holdings Inc. (MEDL.OB).
Augme's patented technology is focused on providing strategic services and mobile marketing technology to consumer and healthcare brands, including such household names as Macy's (NYSE:M), MillerCoors (NYSE:TAP), Nestle (OTCPK:NSRGY) and Clear Channel (NYSE:CCO). The company offers mobile marketing and advertising technology and services to brands, advertising agencies, media companies, and enterprise customers. It provides AD LIFE, an interactive software-as-a-service platform for marketers, brands, and agencies to plan, create, test, deploy, and track mobile marketing programs across various mobile channels, including SMS, 2D/QR codes, mobile websites, advertising networks, social media and branded applications. The company's patented device-detection and proprietary mobile content adaptation software provides a solution to the mobile marketing industry problem of disparate operating systems, device types, and on-screen mobile content rendering. Mobile Marketer named them "Mobile Service Provider of the Year" while industry analysts, Frost & Sullivan has called it the "preferred provider of high-impact marketing solutions in the United States."
Augme has a very strong patent portfolio, especially after it purchased mobile marketing and advertising platform Hipcricket in 2011. It has been termed a patent goldmine with strong buyout potential in the past. In fact, earlier today the company announced that it had received a favorable Markman ruling from U.S. Southern District Court in its patent infringement case against AOL, Inc. and Gannett, Inc.
MEDL Mobile Holdings
Through its subsidiaries, MEDL Mobile Holdings develops and markets customized mobile apps for start-ups and multinational corporations in industries that include retailing, fast-food, air travel, medical devices and fashion. It provides complete product packages, which it sells on both Apple's App Store and the Google Android marketplace. These packages include app store copy, sample screen shots and SEO tags to improve discovery of the apps in the app stores. The company also offers maintenance, reporting, upgrades and integrates third party vendors into an app to provide a suite of user analytics, which allow customers to track downloads, total number of app user sessions and time spent per session.
MEDL Mobile Holdings is establishing a business model in which it expects to generate multiple revenue streams, including development fees, download and in-app purchases, advertising, sponsorship and licensing of technology. It has partnered with such noteworthy names as Encyclopedia Britannica, MTV's Pauly D, Cheech & Chong and Rampage Jackson to mobilize and monetize IP. MEDL Mobile Holdings recently announced that it had acquired 38 new apps for its library with plans to accelerate acquisitions in the months ahead. The company plans to hold a library of 5,000 apps, which will be cross-promoted among a network of 100 million users,
For those of you who aren't VC investors, Quixey is not an investment option. At the beginning of the day Apple was trading at $665.24 a share. There is a body of analysts who believe it might reach a historic $1000 a share, which would lead to a 50% return, but it is anyone's guess how long that might take. Whereas, at Mimvi's last quoted stock price of 17 cents, there is a near immediate upside and I would recommend giving it a serious look. Likewise at $1.35 and 25 cents a share respectively, Augme and Media Holdings look genuine bargains.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.