Companies Spend Little On Mobile Initiatives

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Despite the surge in smartphone adoption and growing shift of traffic from the desktop to mobile, many businesses are starved of funds for mobile initiatives. A new Forrester report, “The State of Mobile Technology Adoption,” finds that the majority of companies surveyed have less than $500,000 to spend annually on mobile services.

That amount barely covers a simple application and a mobile-optimized site. “Spending at these levels mostly takes existing services developed for a PC experience and migrates them to the mobile phone’s small screen,” noted study author and Forrester analyst Julie Ask, in a related blog post. “It doesn’t allow for developing specifically for the unique use cases on mobile phones.”

Given current funding levels, businesses have covered the mobile basics. More than half (56%) have a mobile-optimized site, and 91% plan to by year’s end. About a quarter (25%) have been built with HTML5. About seven in 10 have a native app and all plan to by the end of 2012. Most usually create an iOS app first before moving on to Android.

For marketing-focused apps, the research firm recommends building hybrid apps, which combine native and Web-based programming technologies.

But while iOS and Android dominate the smartphone market, fragmentation persists. Each platform regularly releases new software versions and upgrades. And Android phones come with different screen sizes, keyboards and other features, which translates into higher development costs.

Few companies have developed strategies specific to the device. Less than a third have developed tablet apps or tablet-optimized sites. But Forrester suggests businesses should be focusing more attention on tablets, pointing out that the number of U.S. tablet owners is projected to nearly double to 60.7 million people by year’s-end.

Among other factoids in the report:

*62% of companies are building mobile Web sites in-house, with 46% relying on their IT team directly

* More than half (58%) have outsourced mobile app development

*Only 34% of the eBusiness professionals we surveyed have strategic relationships with their vendors, while 46% are still hiring vendors for project-based work

The study findings were based on separate research projects by Forrester including a survey of 245 professionals from its ongoing marketing and strategy research panel in the fourth quarter of 2011; and consumer benchmark surveys conducted in the second and third quarters of 2012 with U.S. and Canadian adults. 

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1 comment on "Companies Spend Little On Mobile Initiatives".

1. Rob Schmults from Intent Media
   

   commented on: October 5, 2012 at 1:34 p.m.
   Given that -- at least among retailers -- companies overwhelmingly recognize the importance of mobile, a lack of prioritization is probably not driving the "low" spending. I'd bet it is instead driven by two things: First, retailers have realized that for the vast majority of their traffic, an app is not the right answer. Instead, a mobile optimized site is sufficient (and even preferred) for the bulk of their mobile traffic. And a mobile optimized site just isn't that expensive to create and maintain. Second -- and closely following on the preceding point -- retailers have also backed off their previously "app happy" stance, where they were often making multiple apps and throwing money at problem before the solution was understood. Some retailers should and will spend more. Tablet commerce can get expensive, particularly in the form of the rich imagery that that categories like fashion and travel can require. But will these costs show up as "mobile" or as a rapidly growing studio expense line? Similarly, maintaining even mobile optimized sites across different operating systems is a common pain point and a source of expense. But as companies and vendors have gained experience, they've increasingly found ways to mitigate these costs. Anyway, I guess I have a less pessimistic view than the Forrester analyst as to what the spending levels imply for the current state of mobile.

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