Asking "Is An iPhone App Right For You?" the study from Forrester Research acknowledges the popularity of the iPhone and Apple's App Store -- with more than 1 billion downloads so far -- while highlighting factors that brands should consider before racing off to launch the next Tap Tap Revenge.
Among the initial considerations is cost: Forrester estimates that mobile apps range from $20,000 at the low end to $150,000 for more sophisticated ones. Since most marketers don't have the in-house resources to build apps, the report suggests turning to experienced mobile app developers such as Moderati and Genex, which created Kraft's popular iFood Assistant app.
And with more than 35,000 apps now available through the App Store, Forrester analyst Neil Strother also reminds marketers to factor in a media budget to promote their wares -- "or risk getting lost in the sea of applications that is the App Store."
Another key question: free or paid? Forrester advises most brands to offer a free app to reach the widest possible audience, pointing to the popularity of Zippo's free Virtual Lighter app (developed by Moderati), with more than 3 million downloads to date. Selling an app can help cover development costs, but since many are free, some consumers would balk at paying even 99 cents.
What about potential pitfalls? With all the hype surrounding iPhone apps, little attention has been given to the downside of an ill-conceived effort. Forrester notes how early adopters trashed Sony's "underwhelming" Underworld game app. Such negative early reviews can spread quickly and hobble an app's chances of gaining traction.
Behind every app there also needs to be a "big idea" -- an overarching strategy matched to the brand objective. A utility-based app such as Bank of America's ATM locator can be used to provide practical information fast. Zippo's Virtual Lighter or Coca-Cola's Spin the Coke and Magic Coke Bottle apps, meanwhile, take an entertainment-focused approach to building brand awareness and affinity.
Other apps can combine both strategies such as Kraft's iFood Assistant and Nike's Goal app ( in Italy), which offers the utility of live match scores with richer content like action photos and player news.
Among other practical tips, Strother urges brand managers to get their hands on an iPhone or competing device to fully understand their capabilities and how people use them. They should also do a little research to find out what devices their customers are using, whether a BlackBerry, iPhone or T-Mobile's G1.
When Coke found out a segment of its younger customers were on the iPhone, for example, it realized that an app could be another way to connect with youthful consumers at a reasonable cost.
With several competing app storefronts being rolled out, the report also points out the App Store isn't the only game in town. "If you target people who use mobile email or business-oriented services, then an application with BlackBerry's App World should be a good fit," wrote Strother. Brands targeting entertainment-centric users, on the other hand, might want to investigate an app on Nokia's Ovi store.
Regardless of outlet, Forrester emphasizes that advertisers should take a long-term view of their app and plan for future changes in mobile technology. This summer, for instance, Apple will launch the upgraded version of the iPhone operating system, which could alter development costs. The 3.0 OS will also allow for e-commerce opportunities within applications.
Unfortunately, iPhone users don't necessarily take a long-term view of apps. According to a report earlier this year from Pinch Media, only 5% of those who downloaded a paid app were actively using it 20 days after purchase. The fall-off was even steeper for free apps.