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The wireless application developer community is suffering, according to WirelessDeveloper.com President Konny Zsigo. “Fifty percent of the content developers have either left the space or gone out of business,” he said. “You’re going to have to be smarter now than before.”
The reason, he said, is the lack of a clear way of making money. The wireless Internet is a money-losing venture right now, and developers no longer have the cash to stay in the game because the capital markets have dried up.
“Subscribers aren’t paying a re-occurring fee,” Zsigo said. “That’s absolutely critical right now.”
Given the current situation, the industry might be inclined to give up. That, however, is not feasible in part because NTT DoCoMo’s i-mode service in Japan is proof that there is money to be made on the wireless Internet. And now the industry in the United States is scrambling to catch up.
“They embarrassed us into coming up with strategies for monetization,” Zsigo said of DoCoMo.
Because the carrier discovered a way to make money-and lots of it-from the wireless Internet, U.S. companies are now obliged to follow suit. This is proving difficult, however, because U.S. carriers so far have been unwilling to give in to a DoCoMo-style revenue-sharing business model with content developers. Carriers fear that they will become responsible for the content they offer, Zsigo said. Since they are reluctant to do this, developers are in a tight spot because they have no solid method of bringing in cash.
“That’s the problem,” he said.
There are thousands of developers in this exact situation right now. Personal digital assistant maker Palm Inc. boasts of its weighty developer community, and wireless vendors Nokia Corp., Motorola Inc. and others have set up developer centers in an effort to enlarge their pool of applications. Other developers have banded together to form their own businesses, selling their services to wireless companies looking for a particular application.
Evan Uhlfelder, chief technology officer and co-founder of application developer company HIPnTASTY Inc., describes the company’s products as “not for grownups.” HIPnTASTY designs games and lifestyle applications, “goofy” utilities that work to entice users who are looking to have some fun. One short message service application, for example, allows users to tease friends with fake messages.
Uhlfelder said the company’s main focus is to help wireless companies put a face on their technology. HIPnTASTY will team with a technology company that wants to have an application showing off what their particular product can do.
“We’re helping them figure out why they spent so much money on that infrastructure,” he said.
HIPnTASTY designs applications for everything ranging from short message service messages to WAP to Bluetooth to advanced network technologies. The company recently designed a truth-or-dare party game for PacketVideo Corp.’s new streaming video technology.
“Everybody knows what the networks are capable of, no one knows what the users will see,” Uhlfelder said. “It’s a hell of a lot of fun.”
However, one of the problems HIPnTASTY has run into is unrefined application programming interfaces, which are the basic guidelines application developers use to design a product or service for a new platform or technology. Uhlfelder said most of the APIs the company gets are slightly unfinished, which makes it hard for the company to design a fully working application.
“We have to wait for these companies to shake out their APIs for version two or three,” he said. “It’s not worth it for us to learn and work out all the bugs for version one.”
This forces HIPnTASTY to take on more of a consulting approach, asking a particular customer where they want to go with their technology instead of just how they want it to look.
“It’s more about strategy than it is about code,” Uhlfelder said.
Brian Selzer, co-founder and head of production for Eruptor Entertainment, said one of the most challenging aspects his company faces is trying to take into account all the different technologies and interfaces in today’s fractured wireless industry.
“It’s a little complicated for the first-time user,” he said.
Selzer said he’s now in the process of writing the frequently asked questions section for Eruptor’s new wireless entertainment site, and the details that must be included are lengthy and complicated. The questions address differing operating systems, screen sizes and a variety of other problems users may come across.
“It’s a huge, monumental task,” Selzer said. “That’s probably the biggest challenge in this medium.”
HIPnTASTY, Eruptor and other application developers are waiting for the nation’s carriers to set up some kind of money-making strategy for their wireless Internet service, Zsigo said, before they can really get their feet wet. Faster network speeds and other technological advances aren’t as important as figuring out a way to get a paycheck.
“The model is currently kind of goofy,” he said.
Each carrier has its own idea about how to monetize the wireless Internet. Some are planning on a premium-service business model, while others are planning to charge per use. The plans are as varied as there are carriers, Zsigo said.
“There’s no trend that has emerged,” he said. “Inevitably, someone is moving in the wrong direction. Every possible tactic is being tried in the United States. The developers have a very difficult time now because they have to approach each carrier and provider differently.”
This situation will likely have a positive outcome, though, because at least one of the carriers should hit on a business model that works, Zsigo said. And when this happens, the developer community may get a chance to stop worrying and start developing.
