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Will mobile vertical apps be compelling?

Experts are divided over the sustainability of new wave of vertical apps, but say supporting platforms and backroom mechanisms are crucial to success.
Written by Tyler Thia, Contributor

Applications for specific industries are on the cusp of a new wave--with the rise of smartphone usage, many vertical apps are becoming linked to the mobile phone or beginning to resemble a mobile app. Experts, however, say such apps need specific requirements to be viable.

In a blog post last year discussing the possibility of customizing one's car with apps, CNBC correspondent Phil LeBeau cited examples such as downloading an app for a car to make a certain sound when the engine is started.

A separate article on EzineArticles.com noted that cars are being fitted with technologies that for instance, allow drivers to check e-mail messages and social media updates while on the road.

Some experts ZDNet Asia contacted say vertical apps are not a fad, but cautioned on their sustainability.

Ovum's senior consultant Craig Skinner said in an e-mail interview that apps for verticals such as health and government are also well-positioned for strong development and usage.

According to him, some of the healthcare apps that are being developed or already in use include patient information access and health monitoring, which in some cases connect to external monitoring devices to measure blood sugar levels or heart rate. Such information is then fed back to the local healthcare provider.

Other "innovative" vertical apps include maintenance reporting apps for citizens to report about local issues that need repairs or maintenance work, as well as reminders for estate payments and library due dates, he said.

Similarly, Ashwin Palaparthi, vice president of innovation at AppLabs, thinks that micropayment apps for financial services will see long-term sustainable success.

However, Saverio Romeo, Frost and Sullivan's senior industry analyst for ICT, expressed skepticism on the viability of vertical-specific apps.

"Do developers make substantial revenues from this model?" he questioned, pointing out that while some apps are profitable, many others are not. Due to this reason, it is "not safe to say" that app development will be sustainable in the long run, he added in an e-mail.

Romeo also cast doubts over some types of apps. While he called apps for transportation "interesting", he said those that cater to the publishing, fashion, and tourism industries are driven by the growing popularity of tablets.

First-time success critical
According to AppLabs' Palaparthi, "first time success" is a critical factor for apps to thrive. "If any newly launched mobile application has glitches in its first release, consumers will never touch it again, no matter the usage of the application.

"So, there is every chance for properly tested apps to become a huge success and...[achieve] long-term adoption," he said in an e-mail.

Frost & Sullivan's Romeo explained that the "unseen" ecosystem and mechanics behind an app, such as distribution platforms and compatibility of devices, are more crucial for sustainability.

"There is not much evidence that allows us to say that greater adoption will happen [in a particular industry] rather than in another industry," he said. "The stores are a distribution tool of content and engagement with customers and the various industries will use it."

Trends associated with mobile Web and cloud computing will also affect adoption, he added.

Ovum's Skinner added that for apps to enjoy widespread usage, there must be "large multiplier factors across organizational boundaries that align well with scale advantages", instead of the traditional one-to-one sales and support processes.

Wide coverage with iOS and Android
Given that Apple's iOS and Google's Android are currently the most popular, Skinner said developers developing mobile vertical apps will be concentrating on these two mobile operating systems.

"These platforms allow easy distribution and installation of the apps and provide a wide coverage of the market," he noted. "While there are other platforms still covering a reasonable share of the devices, they are not attracting the same level of attention from the developer community."

Romeo said greater uniformity should be the way forward, as there are currently too many platforms in the market. He said this can be done through various approaches, such as cooperation among the different players or moving toward the mobile Web.

When quizzed if the app developer market can start to evolve into a lucrative industry, he expressed reservations, but agreed that apps moving into vertical industries are an interesting development.

Skinner, on the other hand, felt that the app industry is growing rapidly.

"The value of the app comes from the additional sales that it facilitates, rather than from the revenue of the actual sale of the application."

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