[With the phenomenal success of mobile apps, the world of content is migrating from web 2.0 to apps as the new format for creating, packaging, discovering, paying and interacting with information. Andreas Constantinou analyses how apps are the evolution of Web 2.0 and where this phenomenon will lead us next]

Billions of downloads. That’s how the success of software platforms is measured today. And while downloads is not a currency (it does not necessarily translate into revenues), it does create plenty of free buzz for software platforms. This is the world of apps. But what is an app really? It’s not just a bunch of code and a fancy UI. Apps are the new channel for delivering services and experiences in mobile devices, taking over from the old world of web pages, texting, ringtones, wallpapers, MMS, Mobile TV – and some would argue voice, too. What’s interesting all these technologies were agreed over 1,000s of meetings and years of standardisation work taking place across (mostly) network operators in the 80s and 90s. In the case of apps, none of this had to be ‘standardised’, just adopted by a critical mass of software developers and in turn a critical mass of users. Today the billions of downloads are indeed that success metric of de-facto standards like iOS, Android, Blackberry, Symbian and Java – even if the vast majority of downloads take place on a small fraction (5%) of the devices sold. Note: There is a poll embedded within this post, please visit the site to participate in this post's poll. Despite the fragmented nature of the app economy, we ‘re reaching a milestone at the end of 2010: more than 500,000 mobile apps will become available for Apple, Android, BlackBerry, Java ME, BREW, Symbian and Windows Phone devices in total. The number is only a fraction of the big picture; what apps have accomplished is an unprecedented speed of innovation and a diversity of use cases. Think about it; traditional mobile services cater mostly to communication needs. Apps cater to the entire spectrum of consumer needs: entertainment, travel, health, food, sports, finance, education. Network operators have for years been trying to increase service ARPU, i.e. revenues stemming not from voice, texting or data traffic (which are consistently declining due to regulation and competition), but revenues stemming from additional services. Operators (aka carriers) have taken a technology centric-view which is that new revenue can come from the introduction of new technology – MMS, Mobile TV and 3G. Instead apps have taken the view that new revenue can come from addressing new consumer needs. And that’s how apps have allowed mobile to tap into a far more segments of the user spending pie. Apps as the Web 3.0 Such is the allure of apps that every brand and every service provider is looking to create their own apps, whether as part of their brand identity, as a lead generator, a traffic driver or even a direct revenue source. Soon every enterprise will want their own set of apps, essentially creating a more intelligent mobile intranet, for example with apps for guiding you to your next meeting, for inventory tracking or on-the-spot videoconferencing. We can easily imagine a world where there will be an app for every brand, every service provider and every corporate intranet. Apps have grown out of the roots of the web; in a sense an evolution of Web 2.0, adding not only new forms of interaction, but also new forms of discovery, monetisation and deeper user context, as summarised in the next table.

Apps Web

Discovery app store text results or URL

User context location, contacts explicit info only

Access mode online/offline online

Monetisation micropayments ads

UI design focus tailored experience compatibility

Interaction model touch, sensors, keys mouse, keys

Usability focus get things done explore

Economy download economy attention economy

Some aspects are worth highlighting: Discovery is critical to the take-up of mobile apps. Webpages are discovered through Google search or a memorable address. The results you get back from Google take a lot of second-guessing as there is no information semantics describing a webpage or its relationship to other pages. On the contrary apps are published with semantic information as part of the submission process; genre, description, price and screenshots, while downloads, ratings and recommendations are added in-life. This makes discovering apps much more straightforward and intuitive. User context. Apps have access to location and contacts (subject to certification/approval in some cases) whereas web pages only have access to explicitly provided user info. Monetisation should also not be underestimated. The freemium business model and the ubiquity of freely available news on the internet arose from the lack of effective micro-payment mechanisms; it is too cumbersome to take out a credit card and pay 10 cents for reading a newspaper online and no payment provider has managed to simplify this (although Paypal and Google Checkout are trying). On the contrary, many app stores have included micro-payments (pay per download) from day one. Apps are now going beyond mobile. Not only to tablets (see iPad and the tablets coming with Android 3.0) but also to the web (Chrome Web Store), the desktop (Mac App Store) and the billions of connected devices out there from TVs to cars. Apps are also changing the rules of the game for Google. The search giant rose due to three factors: the open (crawlable) web, the lack of information semantics (necessitating a pagerank-type taxonomy) and the lack of a micro-payments (thereby increasing the demand for ads). Now the world of apps is coming to threaten the foundations of Google’s success: the web is becoming segregated into walled information gardens (exemplified by Facebook and Apple’s App Store), apps carry information semantics (thereby greatly reducing the search space), and micro-payments are the primary revenue model for apps (thereby decreasing the need for ads as a monetisation medium). Google is of course preparing for the world where apps become a mainstream means of accessing the world’s information by launching is own walled gardens (Orkut and Buzz), its own app store (Android Market and Chrome Web Store) and now integrating a payments technology (NFC) within Android handsets. So where are we going next? The web as the new app Not to be left behind, web technologies (HTML, JavaScript and CSS) are being driven forward by the world’s web benefactors. Google actively invests in ‘web development’ with the aim to advance the state and adoption of web technologies so that it can supplant the otherwise proprietary technologies (Apple, Microsoft, Nokia, RIM and its own Android) which today power the world of apps. This is part of Google’s strategy to level the playing field where it doesn’t compete directly and Chrome is a big part of Google’s web development efforts, incl. WebKit and v8. HTML5 standardisation (and initiatives like Webinos) are trying to make the web a primary app platform with offline access plus access into contacts and other user information. In parallel the WebKit engine is being consistently adopted in mobile handsets by just about every manufacturer with over 350M deployments up to the end of June 2010. More than anything, web technologies are being adopted by mobile platform vendors looking to renew their platform and developer strategy. In order to be competitive, a platform today needs to have three elements: - mature technology and tools - hype/buzz - an active developer community While you can buy technology, buzz and developer communities are very expensive to build. Like a deus ex machina, web technologies come out of the box hype-ready and with an established developer community. As a result, Nokia, Palm (now HP) and RIM all chose web technologies in WRT, WebOS and WebWorks respectively, as the technology basis of their platform. I believe players who need to refresh their platforms (like Qualcomm’s BREW MP, Samsung and LG) would opt for web technologies. Web technologies also allow mobile platform providers to tap into new developer segments (designers, scripters, back-end developers, CMS developers and more). More importantly, web technologies reduce the development costs for cross-domain development across mobile, tablets, desktop, car, and consumer electronics from toys to TVs. Once web technologies are consistently adopted in 3-5 years we should see web move from today’s lowest common denominator to powering the next-generation of apps across connected devices, from toys to TVs and from web pages to apps – and the browsing (exploratory, lowest-common-denominator) experience moving to resemble an app (getting things done, immersive) experience. Perhaps this is the Web 3.0 we ‘ve all be waiting for. The question is: are apps a ‘blip’ on the radar before the web takes over again? No – apps represent the evolution of creating, packaging, discovering, paying and interacting with information – and while today’s apps are based on mostly proprietary technologies (Apple, Android, BlackBerry, BREW, Symbian, Windows Phone) tomorrow’s apps will be mostly based on web technologies. As to the open web vs closed web silos debate (analysed eloquently by Wired magazine) history teaches us that closed silos are faster at innovating that the open web – and that the web governance will oscillate between the yin and yang for the years to come. - Andreas You should follow me on Twitter @andreascon

This week we had a chance to visit Puerto Rico for the first time. We were in Culebra, not great, in Vieques, amazing, in Old San Juan which beats La Habana, and then came the rest of PR, the great and the ugly. The great is the interior of Puerto Rico, as you can see in the pictures below, it is beautiful and authentic. Ugly is the coastline of Puerto Rico. Ugly in the sense that it is all franchised. It is so fast food, gas station, double lane roads and intersections with big traffic lights, that you would not guess you are in Puerto Rico, unless of course, you are from Puerto Rico and know what it looks like. But the interior of the island, not easily accessible, is really nice, lost in time. Places like Maracao, where we had lunch, are so withdrawn from the Burger King odor of rest of the island that you think you are somewhere else. Indeed as we ate a simple but great meal in the general store, we thought that PR could be a great experiment on what fast food does to people. The study would simply consist of studying the average weight of people living in the interior of the island, say Maracao, and contrast it with the average weight of people in Arecibo. And in order for the science to be good, we also have to be open to the possibility that there is actually no difference. e Share This

. This December 15th Fon will launch the Peek in Europe under the brand PeekFon. The Peek is an efficient email gadget whose unique feature is that it will have no roaming charges in any European country. I will personally do the announcement tomorrow at LeWeb and be at the Speakers Lounge to answer questions for bloggers and journalists at noon. Please follow me @martinvars on Twitter to see if there are any changes in time and location. Please write to me @martinvars or at

to schedule interviews. The PeekFon will be 99 euros to buy, a reasonable price especially considering that the price includes both the gadget and 6 months of all you can eat email service anywhere in Europe. No roaming charges. No contract. After that we will charge euro 12.90 per month for the service but as opposed to other email machines out there, there is no cancellation penalty of any kind if the user does not want to continue with the service. This is a complementary service to Fon WiFi but it is not a WiFi product. It is a GPRS product. The idea is that with Fon you share a little wifi at home and roam for free but the PeekFon addresses those moments in which you can’t find WiFi in spite of Fon´s over 800,000 hotspots now available in Europe. With the PeekFon you get the most important piece of messaging, your email, anytime.
Browsing, Twitter, and other functionalities will be added within months but for now buyers have to think of the PeekFon as an email machine with a full keyboard.
Why is Fon launching the PeekFon? Because in Europe we pay huge roaming charges when we leave our own countries. As a German you can come to France and easily pay in a day what the Peek will cost in a month. Because many people still prefer a phone that looks like a phone for phone calls and sms and an email machine for email and don’t mind carrying two devices that do their jobs well. Because even if you never leave your country Blackberry services, iPhone and Android services in Europe cost around 50 euros a month and have minimum 2 year stays and include no talking minutes. So in Europe even if you stay at home you spend 1200 euros to get email and if you travel around Europe you spend double that on the average. This would compare with 312 euros with PeekFon vs 2400 euros if you roam and 1200 euros if you don’t. So there are enormous savings for getting email. Having said all this Fon recognizes that “apples to apples” a Blackberry, an iPhone, an Android is a better product than a Peek and if you have the extra money to sign 1200 euros contracts and spend a few thousand more for roaming the Peek can’t compete with the complete iPhone, Blackberry, Android experience. But as a pure and simple email machine the Peek can and its price is just reasonable. We also recommend Americans and Asians and other non Europeans coming to Europe to get a PeekFon as roaming charges by US operators are a killer over here so much so that the iPhone for example comes with a feature to disable roaming. The PeekFon will be available at Fon.com December 15th. It will be available for shipping to all European countries for which shipping is now provided for the Fonera. If we see demand from USA and Asia we will also have it available at our US and Asian shops to be activated when landing anywhere in Europe. GPRS service for the PeekFon will be provided by the new Pan European MVNO for gadgets Spotnik. Fon will be Spotnik’s first customer. Share This

In this blog I have criticized Europe’s way of doing business on different occasions. But as I continue to build Fon in Spain and reject the possibility of moving the company to USA, I feel I owe an explanation as to why we are staying put.
But first let me go over the obvious reasons why Fon, a tech company, should be in Silicon Valley. Silicon Valley is the epicenter of the global buzz machine and since Fon has become the largest WiFi network in the world based on word of mouth it would much easier to create positive buzz from there. Indeed the few times that I manage to deal with the 9 hour jet lag and go to Silicon Valley for a few days we end up getting great coverage for Fon. As sad as it is Europeans and the whole world mostly buy what Silicon Valley blogs tell them to buy. And US bloggers and journalists have a great nationalist bias many times not so obvious to them. The second reason to be in the Bay Area is that so many brilliant minds are there. While everyone competes with each other there is also tremendous collaboration and Fon is left out of this creative flow. But aware of these positive factors, I have estimated them against the costs of moving to USA and have decided against the move as there are three huge negatives of doing business in USA. They relate to the three unreasonable burdens faced by the American entrepreneur: legal costs, medical costs and yes, military costs. Allow me to explain. Calvin Coolidge said in the 20s that “the business of America is business”. After having done business in USA for 20 years I would say, the business of America is business…provided that lawyers say so. And even if they say so it is an unstable and incredibly expensive legal environment to do business in. I have built start ups in USA and in Europe and have enough data to make the comparison. In the life of a start up, legal bills in Continental Europe are, I estimate, 75% lower than in USA. In Continental Europe, legal systems are based on written codes derived from Napoleonic times that are very clear on what is legal and what is not. When I do business in the States I have to pay lawyers over $600 per hour to spend endless hours and never give me a clear answer. I don’t blame them. Case law is just very expensive to study and its outcome is uncertain. In Europe the same lawyer may cost us $200 an hour and spend a maximum of say 3 hours to give us a yes or no. As a result my legal bills at Viatel for example were around $600K per year and the legal bills of Fon are around $90K per year. And not only are business lawyers cheaper. A typical tax filing, lawsuit of any kind in Spain may cost a pittance compared to what it would cost in USA. When I lived and managed companies in USA I always felt that I had a legal Damocles sword hanging over my head. Here when people pour hot coffee on themselves they don’t sue the McDonalds. They just say “mierda”. But not only is the legal system in USA a terrible burden on business. There’s another enormous “tax” on US business and that is health care. In Spain for example Fon’s employees go to state hospitals and get treated for free. Fon has no medical costs as a company. As this report shows in USA the average cost to a company per employee is close to $10K per year. In Spain, an engineer fresh out of university may cost $40K all inclusive to the company. If we had to pay another $10K of medical expenses that would mean that 20% of our costs would be to provide medical care for this new hire. So in Spain and many other places in Europe are not only total employee costs lower than in Silicon Valley for a very well educated population (not lower than in Texas for example but lower than Silicon Valley) but we don’t have to pay medical expenses. And lastly there is another burden to the American entrepreneur that is hard to quantify but it is there. And that is the fact that USA spends close to half of what the whole world spends on the military. What does this mean to the average entrepreneur in Europe? In simple terms that we don’t pay a “defense tax” every time we do business. In USA military spending is 21% of the budget and an estimated additional 8% in other parts of the budget that are affected by the military with a big part being taking care of veterans. In Germany, Spain, Netherlands the military account for less than 7% of the budget. And who supports these huge efforts? For an entrepreneur it is a real cost of doing business. Less services more costs for the company. The best example is education. Education in general and university education and training in Europe is mostly free. Education and training in USA is occasionally free but frequently extremely expensive. In the end the entrepreneur in USA has to pay salaries that allow his/her employees to educate their children. Moreover expensive education spills over in other areas of society. Europe has an incarceration rate of less than 100, USA has an incarceration rate of 750 people per 100K inhabitants. In my view there is an inverse correlation between spending on education and incarceration that favors Europe. If all US prisoners were moved to a city they would overflow Madrid. Maybe spending less in the military and more in free education would have a more beneficial effect on society. Another example is public transportation. Most employees at Fon come to work in public transportation which is lacking in many American cities. Not having a car means great savings. Also Europeans who have cars pay much less in car insurance because the legal system in Europe while giving awards in case of accidents do not find it fair to distinguish between your leg and that one of Leo Messi. As a result European employees make less after tax income but have less expenditures because our government here spend much less on the military and have almost 18% of their budgets more to spend in social services. Should it surprise us then that European GDP is 30% greater than US GDP $18 trillion Europe compared to $14 trillion USA? Why is it that this continent who Americans consider so 20th century is holding its own without a common language and with many barriers to business that don’t exist in USA? Or why is it that entrepreneurs like my friend Loic LeMeur moved to Silicon Valley only to hire and fire people in USA and ending up being a Silicon Valley company with European employees? In my view it’s these three factors, legal costs, medical costs and military costs, these three abnormal burdens to the daily life of the American entrepreneur, explain a great deal of the European advantage. It is not that we are better. It is America’s self inflicted damage that sinks its currency and helps us in relative terms. Until the Obama administration addresses these three burdens and effectively lowers health care costs, establishes a system of limits on legal awards and spends less in the military USA, in spite of its unparalleled ability to innovate, will continue to struggle.
US accounts for almost half of global military spending Share This

Our home in Madrid is called Casavars. It was designed by the Spanish Architects Acebo y Alonso. I recently started photography lessons. I am on to my second class. My teacher is Spanish photographer Mauro Fuentes who is also Spain´s number one photography blogger. His blog is called Fotomaf. I have a detailed post in Spanish on my latest lesson and what I learned about using tripods, developing with Lightroom and overall handling of my camera, a Canon 50D (not yet the 5D) with two lenses: a fixed 1.2 85mm and a 24-70 2.8 Zoom. Here are my pictures:

And here are Mauro´s pictures:

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People are not absolutely rich, absolutely middle class, or absolutely poor. A person who makes 1000 euros a month is poor in Europe and well off in Brasil. Now add financial crisis to the euro at $1.5 and while I can´t gurantee you that you will be rich in Miami I assure you you will definitely be richer in Miami than wherever you are from Europe. Prices in Miami are insanely low for European standards. Let´s say you are a young graduate in a relationship and you managed to save 6000 euros and so has your boyfriend/girlfriend and you want to take time off or can´t find a job. Well with 12,000 euros a couple could come to Miami and live for half a year tickets included. I will give you an example. Even though we rent a car for 28 euros per day we love to go around in a scooter. And in Miami you can buy a NEW scooter for 650 euros. And because gas costs half of what it costs in Europe you can go anywhere around South Beach in this scooter for 60c per day which is what we do. We prefer the scooter to the car. Restaurants are in such competition that if you walk on Lincoln Road you are bombarded with offers to eat a good meal for 10 euros per person. Apartments are in great supply that you can rent one for say 6 months for 3000 euros. And on top of this you are in Miami. These days every day is a high of 31C and low of 23C, perfect beach weather. People are nice and fun, and even though they are going through the worst crisis in their lifetime, they don´t show it.
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