Usa today case_study_j_mathis

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Title of Case Study Cell Phone Applications Make Big Money: The Cost of
Mobile Information
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Case Study Title: Cell Phone Applications Make Big Money: The Cost of Mobile Information
Article Information:
Article headline: App leads you to store deals
Byline (reporter(s)’ name(s): Jefferson Graham
USA TODAY publication date: August 12, 2010
Section (News, Money, Sports or Life): Money
USA TODAY page number: 3B
Article headline: Phone apps keep transit riders on time
Byline (reporter(s)’ name(s): Jeff Schweers
USA TODAY publication date: August 31, 2010
Section (News, Money, Sports or Life): News
USA TODAY page number: 3A
Article headline: Apple relaxes restrictions for app developers
USA TODAY publication date: September 10, 2010
Article headline: There’s a fund for that
USA TODAY publication date: September 16, 2010
Article headline: Development of mobile business apps set to take off
Byline (reporter(s)’ name(s): Byron Acohido
USA TODAY publication date: October 11, 2010

Summary Statement:
Zynga, Booyah, Pinger, and Shopkick? These are a few applications available for
smartphones. There are apps that allow people to see the location of family members and
business apps to help find a nearby restaurant. Cities across the country have begun using
mobile applications to help people find better bus routes or report faulty traffic lights. Billions
of dollars are made with the development of mobile applications that allow easy access to
limitless information with the touch of a button. Certain applications make user information
available to others when activated. Some applications share information about the user in
order to customize and improve certain aspects of the application, but many people believe
that there are security issues and privacy risks because of this. However, app developers and
other businesses continue making large profits from the development and use of mobile
applications, and the benefits of mobile apps strongly outweigh the risks.
The days of a phone being just for phone calls are over. Business apps give even more
power to corporations and consumers. Applications used in retail stores help inform customers
in the store about products or services, give information about sales promotions, and direct
customers to their desired item, all while gathering information about the app user’s shopping
habits and preferences for the retailer.
Necessity may be the mother of invention, but money is the father of mobile
applications. The research firm Gartner ranked money made from the sales of mobile business
apps fifth in 2010 behind mobile apps for games, shopping, social networking, and utilities. This
means that the importance of instant access to information surpasses the importance of
fashion, groceries, and even gasoline. Although many applications are free, some come with a
fee anywhere from $2 to $5, particularly applications created by third-party developers. With
Apple having more than 250,000 applications for the iPhone and iPad, and Google having over
100,000 applications for the Android, the purchase of all mobile applications has increased
almost two-billion dollars in the last year. Much like the craze of the dot-com era, the
developers of mobile applications see their fair share of success and failure. Venture capitalists
that invest in mobile application development are encouraging developers to come up with the
next big thing, something that will do for the mobile industry what Amazon and Google did for
the Internet. For example, new healthcare laws inspired apps that share information between
patients and doctors without office visits.
Even with potential security problems, today’s society definitely sees the benefits of the
democratization of Information through mobile applications. Software developers are including
opt-out options and better encryptions to improve security. Still that may not be enough to
convince skeptics because, unfortunately, the few security issues that occur wind up in the
media. However, despite the bad publicity, mobile apps are still produced and continue to
become popular, generating more profits every day. With many countries struggling
economically, the world is in need of a powerful capital-gaining industry like mobile application
development and sales.

Discussion Questions:
1. Is the ability to share and receive information so important that people should risk the
security of their personal information? What are the pros and cons of downloading
mobile application that share and receive information between the business and the
consumer? How are the companies that develop mobile phones and applications
working to improve security issues and protect the user? Do these companies care more
about profits than consumer security?
2. Many people today have replaced their home phone lines with cell phones. With the
popularity of mobile applications rising and cell phone technology becoming smaller,
faster, and easier to develop; what may become of the PC? Are more productive phones
likely to completely replace the home computer for basic internet use such as news,
email, and social networking? Why or why not?
3. In 2009 the FCC forced television stations to completely convert to HD broadcasting in
an ongoing effort for the advancement of technology. Recently the National Association
of Broadcasters is proposing a new federal law that would force manufacturers to
implant FM tuners in all mobile phones. This has the potential to increase radio
advertising revenue, which has dropped 26 percent since 2006, and it may also be found
very beneficial in an emergency when non-broadcast wireless networks become
clogged. What are some reasons not to include FM tuners in mobile phones? Are there
other reasons in favor of this? Will other non-traditional devices be incorporated in
future mobile phones, such as the T.V. remote? What kind of applications will likely
appear if this law is passed?
4. How can further development of mobile applications impact the economy? Will it
stimulate the economy or dampen the market? Why or why not?
5. Google, one of the most recognizable companies today, is competing with Microsoft’s
web browser, MSIE, using their own browser, Chrome. They are also competing against
Apple in the smart-phone market with the Android. There have been unconfirmed
stories of a Facebook phone under development. If this product were developed, would
it be able to compete against Apple, Google, and even RIM, the developers of the
Blackberry? What other product integrations may emerge in the rise of the smart-phone
and mobile application era? Will they be good or bad?

Future Implications:
The need to share and receive information has always been important and will always
be a part of life. That is why, despite the recession and security concerns, revenue generated
from mobile applications continued to rise. Research Firm Gartner says that if apps for business
continue to increase, the projected amount of money consumers will spend on smart-phone
and tablet apps could reach over 20 billion dollars by 2013. This means that not only app
developers but ambitious tech and net savvy people will have a chance at competing in an ever
growing market. This will increase the number of ways to get information. Applications can be
created to help with future problems to save time and money, such as ending the need for
paper, or mobile virtual-life business conferencing which already occurs via PC. The possibilities
may be endless; however, there may be many companies that attempt to enter the smart-
phone market to take advantage of these financial possibilities, flooding the market with even
more choices for consumers. Consumers may then change the way they decide on what phone
to buy, and it could possibly be based on the quality and quantity of applications available.
Additional Resources:
Ankeny, J. (2010, February). The app store that never closed. Entrepreneur, 38(2). 22-27.
Carr, N. (2008) The big Switch: Rewiring the world, from Edison to Google. New York: W.W.
Norton & Company Ltd.
Kleiner Perkins Caufield & Byers. (2010). Seeking outstanding iPad & iPhone innovators.
Kpcb.com. Retrieved from http://www.kpcb.com/initiatives/ifund/.
O’Shea, D. (2010, June). The new power of mobility. Entrepreneur, 38(6). 45-52.
Shilton, K. (2009, November). Four Billion Little Brothers? Privacy, mobile phones, and
ubiquitous data collection. Communications of the ACM. 52(11), 48-53.
Sikes, P. (2010). Make Money Online With Facebook by Creating Applications. Articlesbase.
Retrieved from http://www.articlesbase.com/internet-marketing-articles/make-money-
online-with-facebook-by-creating-applications-3534508.html.

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