Reverse Innovation

Short piece in Newsweek talks about the concept of reverse innovation as being the next big driver of globalization.  In essence, it is innovation flowing from developing countries to developed countries .tata_nano_1

An example cited is the  Tata Nano out of India designed for that marketplace (very low price and cost of ownership) but as a product finding interest in the developed world.

This is also already happening somewhat in the Telecom world with the rise of low cost innovators like ZTE and Huawei. (it is not just about manufacturing costs anymore!!!).

Taken to its logical conclusion, companies will become global not just international. Leading the way is IBM with not only globally distributed manufacturing and research but also with administrative functions being managed and run on a world wide basis in places such as Brazil, China and India. Perhaps, in a few years the concept of a centrally managed company with home-country assignees managing foreign subsidiaries will disappear.

Maybe they aren’t really applications after all?

The New York Times ran a small story last week titled “What Do All These Phone Apps Do? Mostly Marketing”  It makes the point that there are a number of iPhone apps whose primary purpose is advertising and/or brand building with the actual function of the application being almost secondary.

A good example cited is a ‘spirit level’ application from Stanley Works.  While I don’t expect my local contractor to whip out his iPhone to make sure that the wall he is building is nice and level. It does a nice job of getting the Stanley name out there and build brand reinforcement as an innovative tool company. There are 400,000 downloads claimed for this application, which seems quite high (my guesstimate is that there are about 10 million at&t  iPhone customers in the US) – which points to an amazing retention rate for an advertisement. No wonder, nearly every business is clamoring to get on the iPhone app bandwagon.

From what I have been able to tell, the same phenomenon is not as pronounced with Android, Windows Mobile, or Palm phones.

Just came across two  other posts – from the attention digital blog a spreadsheet of ‘branded apps’ – it has been populated with iPhone apps (over 200)  so far but there are tabs for Android, Blackberry and Palm. The second is a piece of analysis done by ComScore on the % of US Internet users who click on internet ads. Contrasting the 2007 and 2009 figures for all US internet users

 

July 2007

March 2009

Total clickers

32%

16%

Heavy Clickers

6%

4%

Moderate Clickers

10%

4%

Light Clickers

16%

8%

Others

68%

84%

It appears that the percentage of the internet user population that is ‘clicking’ through on Ads is declining significantly. 84% are not reached by the ad at all. As the mobile internet becomes more prevalent, maybe the  dominant advertising model will become ‘sponsored apps’ and not click through advertising.