Mobile Application In Business: Usage, Models And Effectiveness

Abstract

Describe about the Mobile Application in Business?

Mobiles are being used for almost every purpose of business, education, healthcare, government etc. Apart from being a communication device, now it has become an integral part of our daily lives. It has become an important part of business. Especially with the emergence of smartphones and mobile application the use of these mobile applications in business have become essential. Mobile commerce, mobile marketing etc. are influencing thousands of business worldwide. Thus, there are different mobile marketing models for different kind of business. In this paper, there will be an extensive study on use of mobile applications in business, different models of mobile marketing etc.

Interment and ecommerce have accelerated the growth of several businesses from different industries for last few decades. Other than accelerating existing business processes, these information and communication technologies have given birth of new era of business. For example, online shopping of goods. These technologies helped businesses to go over ‘click and mortar’ businesses, from their ‘brick and mortar’ business models. (Head, 2009)

Evolution of mobile technologies have raised the platforms like smart phones and more recently android and iOS based phones. These mobile phones are applications oriented and businesses are utilizing these application oriented phones for their mobile commerce and mobile marketing activities. (Lee, 2012) There are new types of business marketing models are being used by different kind of businesses. People do not need to have web browser and visit some ecommerce business website to shop online. Rather, businesses are providing all ecommerce facilities within a dedicated application.   (May, 2001)

By definition mobile application is a specially designed and developed software or application intended to run on mobile devices. Mobile applications are highly platform dependent. (McWherter & Gowell, 2012)

In this paper, the key area of the study is to ponder over the effect and effectiveness of mobile applications in the world of business and to study the models of implementation for a positive impact in productivity and growth for the business. The problem will dwell into the need for mobile applications in business and then unfold to study some models in the field of marketing and research concluding on the effect on productivity. (Chen & Skelton, 2005)

At the end, a critical discussion on how mobile application can help to bring revenue to the business.

In today’s industry, people always on the go hence it became very critical to make the business and market moves with them to ensure 24/7 availability. Currently, people can make information available at anywhere, anytime and on any platform to staff, customers and prospects via mobile application. Therefore, mobile applications became the key for business owners, whether they want to market their services and products or to just simply run their business (Roma, 2010)

It has been calculated that currently almost four billions of mobile phones are used in the world and one billion of them are smart phones which are able to exchange data, internet surfing, connecting people around the world and facilitate business. Smart phones can have major impact on productivity of the company and the staff as it helps in enhancing the business process through offering their staff and customers with access to application using their own mobile devices (Peter, 2009)

Mobile Applications Overview

Virtually, today’s application must be designed with mobility in mind, providing the required functionality on a small touch screen.

The following figure shows the increased usage of mobile apps in 2010 and 2011;

In the last few years, Smartphone sales boomed around the world after becoming a commodity that is important for people at all levels and ages.  In the last 5 years, after a few manufacturers competed in the global market to impose their devices and gain a footprint in this challenging market and increase their market share. By end of 2009, Samsung, Apple, KG, Lenovo, Sony, HTC, Huawei, Xiaomi and Nokia developed many new models in order to reach to customers with innovation and quality. In 3^rd Quarter 2014, only Samsung, Apple, LG and Huawei got the big market share. By the end of 2011 and beginning of 2012 Samsung and Apple broadened their shares 10 times and 4 times respectively.

In the third quarter of 2014, Samsung was the leading smartphone vendor in the world based on shipments, with over 78 million units shipped globally. This is almost twice the amount of units that were shipped by its closest competitor, Apple, in the same quarter. Overall Samsung held a 23.8 percent share of the smartphone market in the third quarter of 2014, a slight fall from the 30.2 percent share it held at the beginning of the year. The company’s influence in the market peaked in the third quarter of 2013 when it was responsible for 32.5 percent of all smartphone shipments, shipping a total of 85 million units.  Apple was the second largest vendor of smartphones according to latest figures as it shipped almost 39.3 million smartphone units in the third quarter of 2014, an increase of 5.5 million units from the same quarter in the previous year. Sales of the iPhone peaked at the beginning of 2014 with sales of over 51 million units in the first quarter, contributing to record sales of 170 million units for the whole year.  Lenovo’s influence in the smartphone vendor market has increased significantly from 7.9 million shipments at the beginning of 2013 to almost 17 million by the third quarter of 2014. This meant that, as of the third quarter of 2014, the Beijing-based company held a 5.2 percent share of the smartphone vendor market.  (Statista, 2015)

It is very obvious that Samsung and Apple are heading the market share globally. But, that’s not all what is taking place with the global smartphone market as the operating systems that run in the phones. The operating systems play a big role in customer friendliness and subsequent satisfaction through providing all the features, graphics, apps compatibility and user interface when using the Smartphone.

While Samsung’s smartphone share was up in 2013 it slightly fell by 1.6 percentage points in the fourth quarter of 2013. This was mainly due to a saturated high-end smartphone market in developed regions. It remains critical for Samsung to continue to build on its technology leadership at the high end. Samsung will also need to build a clearer value proposition around its midrange smartphones, defining simpler user interfaces, pushing the right features as well as seizing the opportunity of bringing innovations to stand out beyond price in this growing segment. 

Smartphone sales in the last five years

Strong sales of the iPhone 5s and continued strong demand for the 4s in emerging markets helped Apple see record sales of 50.2 million smartphones in the fourth quarter of 2013. 

“However, Apple’s share in smartphone declined both in the fourth quarter of 2013 and in 2013, but growth in sales helped to raise share in the overall mobile phone market,” said Mr. Gupta. “With Apple adding NTT DOCOMO in Japan for the first time in September 2013 and signing a deal with China Mobile during the quarter, we are already seeing an increased growth in the Japanese market and we should see the impact of the last deal in the first quarter of 2014.” 

Huawei smartphone sales grew 85.3 percent in the fourth quarter of 2013 to maintain the No. 3 spot year over year. Huawei has moved quickly to align its organization to focus on the global market. Huawei’s overseas expansion delivered strong results in the fourth quarter of 2013, with growth in the Middle East and Africa, Asia/Pacific, Latin America and Europe. 

Lenovo saw smartphone sales in 2013 increase by 102.3 percent and by 63.1 percent in the fourth quarter of 2013. Lenovo’s Motorola acquisition from Google will give Lenovo an opportunity to expand within the Americas. 

Company	4Q13 Units	4Q13 Market Share (%)	4Q12 Units	4Q12 Market Share (%)
Samsung	83,317.2	29.5	64,496.3	31.1
Apple	50,224.4	17.8	43,457.4	20.9
Huawei	16,057.1	5.7	8,666.4	4.2
Lenovo	12,892.2	4.6	7,904.2	3.8
LG Electronics	12,822.9	4.5	8,038.8	3.9
Others	106,937.9	37.9	75,099.3	36.2
Total	282,251.7	100.0	207,662.4	100.0

                                                                Source: Gartner (February 2014)

Operating System	2013  Units	2013 Market Share (%)	2012  Units	2012 Market Share (%)
Android	758,719.9	78.4	451,621.0	66.4
iOS	150,785.9	15.6	130,133.2	19.1
Microsoft	30,842.9	3.2	16,940.7	2.5
BlackBerry	18,605.9	1.9	34,210.3	5.0
Other OS	8,821.2	0.9	47,203.0	6.9
Total	967,775.8	100.0	680,108.2	100.0

It has become imperative for business to adapt with the latest technology and mobile applications are taking the world by a storm and hence forming essential existence in the field of business. Use of mobile applications in business gives companies to engage with their customer channel via real time mode and social sharing utility (Gebauer, 2004) to collaborate the customers in just a single application. Mobile applications have made the customer problem appraisal simpler and the way to interact with them has become really efficient raising their satisfaction level. The most obvious use is mobility where customers can shop online with the help of these applications. It can be of a great help to create virtual offices at anywhere and anytime. It is advantageous for a cost-effective marketing for raising funds, organizing events, reinforce brand power (Lyytinen, 2001) and gain exposure in target customers. It is an innovative marketing tool for boosting brand value and enhancing the customer base. Therefore, the profusion of mobile applications has changed the face of expectations of consumers.

According to (Fegian, 2011) the following explain in details how mobile applications can be used to solve business problems;

• Creating Virtual office: Regardless of the physical locations of people, they can connect to each other if they have smart phone. Virtual offices offer instant respond and easy access to multiple software applications including client relationship management software, invoicing, time tracking, project management software and much more.
• Cost effective marketing: Announcing for your event, products and services can be done in a great expense. Lately, organizations started to develop applications geared specially to a specific segment with their corporate funder’s sponsorship. The funders collect advertising opportunities to support their brands as well as increasing product exposure to larger segments.
• New software platforms: The boundaries of smart phones abilities are expanding due to continue progress in mobile technology. Each sector in the industry has its own software which is highly supply their respective market. Unlike previous decades were software companies were limited to build for Mac or PC which result in a lot of budgetary expense, now a days market has entered into new stage of being able to expand for all smart phones as well

Top Smartphone Vendor Analysis

For the realm of marketing or generating revenue, there can be various innovative models for inclusion of mobile applications in marketing, technology and other fields. It is important to know about the problem domain of the company and the type of application required to raise the profits. Free applications with in-app advertisements is an effective model to attract users and is lucrative for a huge profit usually practiced by Facebook app. Freemium is another gated feature in which there is charge for premium features with a goal to engage users and make them willing to pay for additional options. Angry Birds game is an example for such a business model. There is a model for paid applications which are innovative, user friendly and have an excellent interface (May, 2001). However, this may hinder a large number of customer base due to its cost. Another app monetizing strategy is in-app purchases that involves selling of some features or services including physical goods or virtual goods. This is a very well utilized model for ecommerce brands and provides flexible approach. Paywall model of business applications focuses on content (Leem, 2004) and prompts for a subscription and attracts the users for more. Sponsorship is another business model for incentivized advertisements fostering partnerships with advertising companies or by redeeming rewards to the users.

Mobile applications have provided plethora of advantages and have uncovered untapped features of the business world to enhance the revenue and fostering great profit opportunities. The massive growth and refinement of adoption of mobile application technology have made various business to effectively make their firms recognized as a major brand in the contemporary firm. The productivity in terms of marketing, communication and networking are enhanced with inclusion of such services in the realm of existing business. The use of mobile applications are helping professionals for consumerism of IT to transform the purchases of enterprises, distribution of assets and consuming of mobile softwares (Lee, 2004). The enhanced productivity is a result of time saving, uniqueness from competitors, maintaining office productivity, cost reduction or a means of virtual collaboration. As mentioned in (Nilson, 2011) the following list some ways for how mobile applications can help to bring revenue to the business;

In 2010, Google’s CEO Eric Schmidt expected the future of mobile applications to bring pleasant surprises to businesses. He said mobile devices will make all information about the world available to users at all times. Businesses can use Geo-targeted push notifications in many ways. For example, a restaurant can use this technology to send special offers to customers who had visited the restaurant recently in order to promote loyalty. Or, a store can make announcement for sale on certain items based on seasonal needs like umbrellas when customers get weather alerts on their mobile devices. Music bands can also use this technology to let people know which city they are visiting to perform there on order to promote ticket sales among fans of that band.

Smart phones represent a great opportunity for many businesses to where shopping applications can facilitate the relationship between those businesses and their customers. As people tend to use their smart phones when they are awaiting the bus, or riding the train on their way to work or even at the airport before flying. This is the best time for those people to shop so they make up for the delays and waiting time in their busy life. Before smart phones became available, people used to read during this free time, but today, they like to get busy with their smart phones to read, search, and shop.

That being said, the opportunities are being at their max for the mobile applications to reach out to customers at any period of free time.  Additionally, a stored password keeps a customer logged in at all times just to make a transaction easier.

The classic targeted ad story goes something like this: A potential homeowner is stuck in traffic on his daily commute home and looks out his window to read a sign on a new housing development that says, “If you lived here, you’d be home by now.” (Peter, 2009)

With a billion devices out there in use, there are endless opportunities to direct advertising toward smart phone. Smart advertising application can target customers based on their geographic location and customize advertisements accordingly. Also, to make it easier, those applications can advertize directly on a map, where the customer can get direction very easily.

Groupon is now on top of the mobile application of what is called just-in-time offers. In order to boost revenue, businesses utilize data through Geo-tracking to deliver advertisements as the art applications calculate are needed by customers.

As an example, a Cinema or a restaurant can have some commercially dead times where there is not much business. Groupon is geared to push special offers for those businesses at those slow down times when a customer happens to be in the area where the business is located.

According to a statistic conducted by Statista, in 2009, worldwide mobile app downloads amounted to approximately 2.52 billion and are expected to reach 268.69 billion in 2017. In 2010, earnings of mobile apps providers amounted to 6.8 billion U.S. dollars. (Statista)

It is known that not all well established large companies are innovative and technology savvy.  Anyhow, so many smaller and not very well known companies use technology that can enable them beat bigger competitors by utilizing technology and introducing mobile apps that developed along with the spreading of smart phones that went into the pockets of millions of people.

There are also a few considerably large companies that are admired for employing resources and taking risks in mobile apps. Here are a few of those large reputable companies that have made success in mobile technology and are ranked at the top innovators for the challenging mobile technology.

Geico, an American insurance company, was founded in 1936.  Although being a very old company, they have stayed fairly up to date with technology, as illustrated by their marketing campaigns Gecko, as well one of the most helpful iphoneapps. which was very well crafted to help their customers manage their policies for auto or home insurance.

I won’t pretend that Geico’s iPhone app is thrilling or entertaining, but it’s definitely useful. If you’ve lost your insurance card, the app can display it digitally right on your smartphone’s screen. If you’ve gotten into an accident, it offers a step-by-step guide for handling it the right way. If your car is stranded, broken, out of gas, or if you’ve simply locked your keys inside, it can guide you to the nearest gas station, locksmith, or auto shop to get you back on the road.   

It sometimes seems like there’s a Starbucks on every corner, but once you’re actually looking for one, they’re not nearly as easy to find. The Starbucks mobile app has a store locator, as you might expect, but it also includes a surprising array of other features that make it much better than the we-made-a-basic-app-because-we-felt-like-we-had-to approaches of most large companies.

Starbucks customers can use the “Drink Builder” feature in this app to help them find their way to pick their preference of the wide and rather confusing verity of options the Starbucks offer.  Customers can use the app to load Starbucks credit so the customer can purchase drinks for themselves or others electronically or through social media like Facebook. These features add such a great experience that makes sense for the customers side by side with the ability to locate a nearby Starbucks wherever they happen to be.

Here is the biggest organic and natural food supermarket chain in the world. Instead of just introducing a mobile app that helps customers locate a store and offer some promotions and coupons with special deals and discounts, they developed a couple of apps solely designed for the customers. One of those free apps is “Whole Foods Market Recipes” that simply offers useful information to customers ranging from recipes to health advice to cooking tips. The other app is called “Whole Foods Market Mission” that avails health advice and highlights great incentives of healthy eating that enlightening to users of this app.

The two apps made Whole Foods Market appear as friendly and simple as one’s neighborhood grocery store despite the fact that Whole Foods Market is on the industry giants.

Conclusion:

In this paper, the main topic of discussion in the use of mobile applications in business. The objectives of the study and the context of the topic has been discussed in the introductory part. The outline of the next parts of the paper have been also discussed in that section. In this report, the use of mobile applications in businesses, the benefits of the same, have been discussed along with statistics on the usage of mobile applications and web browsing for businesses, ecommerce etc., market researches from Gartner etc. The statistics clearly shows that, during last few years, the usage of web browsing has been reduced by increased use of mobile applications. There have been use of various other statistics and market researches that clearly shows that mobile application have better prospective in businesses. These can be used for virtual offices, cost effective marketing, new software platform etc. There are various mobile application models that can increase productivity of the business. Finally, how top companies are using mobile applications in their business that have been shown as case studies. In this list of case studies there are companies like Starbucks, Geico, Whole Food markets Inc. etc.

It can be concluded that inclusion of mobile applications in the world of business have led to tremendous success and innovation by increasing productivity, reducing dependability and fostering flexibility. Different industries and businesses are embracing this new opportunity and increasing their revenues. There are various mobile service provider, manufacturers and operating system platforms. These have opened up more number of possibilities to the business. Instead of using one mobile application channel, now they can use several channels. Also, it helps to widen the reach to prospective customers. (Zheng & Ni, 2010)

In today industry, companies need to consider mobile applications as key to develop their business and gain more sales and advertising in cheap prices. This will improve the customer experience and help in attracting and attaining the current company’s customers. In addition, mobile application can help the customers as well, as they can get access to the inventory products, receive notifications of special offers or launches and much more. 

References:

Chen, L.-d. & Skelton, G. W., 2005. Mobile Commerce Application Development. s.l.:Idea Group Inc (IGI).

Head, M. M., 2009. Mobile and Ubiquitous Commerce: Advanced E-Business Methods. s.l.:IGI Global.

Lee, I., 2012. Mobile Applications and Knowledge Advancements in E-Business. s.l.:Idea Group Inc (IGI).

May, P., 2001. Mobile Commerce. s.l.:Cambridge University Press.

McWherter, J. & Gowell, S., 2012. Professional Mobile Application Development. s.l.:John Wiley & Sons.

Zheng, P. & Ni, L., 2010. Smart Phone and Next Generation Mobile Computing. s.l.:Morgan Kaufmann.