Verizon just made an announcement that they’re going to be offering free Skype-to-Skype phone calling on its 3G phones starting March, 2010. Even my lame Curve 8330 will be able to make those calls. Similarly, AT&T/iPhone has backed down in its argument against Google Voice and they’ve even opened up the platform for the SlingPlayer to stream video over the device.

Are we living in a topsy turvy world? Carriers are willingly allowing applications go after their core revenue model (phone minutes) or eat up their bandwidth (streaming video). For years, in the age of the “anybody can do anything” Internet, carriers have done an excellent job controlling their network: what goes on it, how people use it, and how they charge for it. With the proliferation of smart phones with direct Internet access that can use VoIP services, access to calling plans that undermines the carriers’ pricing (even free) is just an application download away.

In an app-enabled mobile world how long can carriers hold onto their old pricing mechanism for consumers? They can only block Google Voice and Skype for so long. You remember the old adage, the customer is always right? Well, in this new mobile world, the customer is calling the shots. And if you want to keep them, you better revise your revenue model.

Who doesn’t love FREE?

While the cost of making phone calls has dropped dramatically, the wonderment of FREE phone calls still holds true. There are so many services that offer cheap-to-free calls, yet every time another one is announced it’s big news. And with BlackBerry it’s still big news because they’ve got the largest penetration of smartphone users. Much higher than the iPhone.

Free phone calls, even for a short period of time, makes an impact. When I was in Paris, Skype gave us Traveling Geeks a month of international Skype-to-phone calling for free. That was absolutely huge, and it was timed perfectly as I called my wife and parents every night from Paris. What was so powerful about that short promotion (free international calls for one month) is they gave me something that affected me personally. How often can a brand do that? Provide something ongoing or even as a promotion that attaches their brand to a personal intimate experience. Skype did it, and as a result I’m a customer for life. More importantly, I’m telling everyone about it. I’m blogging about it.

Free phone calls are powerful. What can you offer for free, continuously or for just a brief time, that could deliver that impact?

Creative Commons attribution to VoipMAN and re-ality / CC BY 2.0

Augmented Reality No Longer Science Fiction

Layar, which has been the ‘poster child’ for augmented reality smartphone apps, just launched a brand new app in the iPhone’s App Store.  If you’re still at a loss as to the significance of augmented reality, Layar’s own explanation from inside the app explains it well:

“Layar is a tool to browse the world. It enables exploration, more informed decisions, serendipity and fun. [...] While looking through the phone’s camera lens, a user can see houses for sale, popular bars and shops, tourist information of the area, play a live game, etc.”

How it all works

The app retrieves information from third-party developers who contribute their “layers” to the Layar platform. For example, there’s a layer called iMetro, and when it’s selected and you’re standing outside, Layar will display digital overlays of nearby bus stops and the time the next bus is arriving.

Layers are similar to plug-ins that customizes desktop browsers. There are also layers for Yellow Pages, Las Vegas casinos, and Wikipedia. The layers are free, as is the Layar app. However, Layar told Wired.com that after the platform generates enough interest, it might begin charging users for premium layers.

Some marketers have experimented with augmented reality (AR) to promote products through interactive and web-based applications, but AR is still in its infancy stage despite the huge potential it has to make our virtual experience very close to our real world.

Check out this great example from GE:

PepsiCo just underwent an onslaught of public dissent (#pepsifail) and debate over the “Before You Score” iPhone application for its AMP energy drink. Here’s the commercial that shows the application in action.

There’s been endless debate on the subject. Read Mashable’s article on the issue and then their follow up piece on AMP’s apology. Here’s my summary of what PepsiCo/AMP did right and what they did wrong.

What did the PepsiCo/AMP brand do right?

1. They created a controversial application that got people talking.
2. They created an application specifically targeted towards their demographic, young men.
3. When the online anger took off, they immediately responded and apologized if some saw it in bad taste, but that their intention was humorous. Here’s the tweeted apology.
4. They invited feedback.
5. They saw that the discussion was trending on the hashtag #pepsifail and tagged their tweeted apology with it. This first and foremost guaranteed that their apology would be seen, but they also accepted the community decision that this was how this story would be classified.

What did the PepsiCo/AMP brand do wrong?

1. The application’s content was not unique, it just played off of tired stereotypes.
2. It could have been funnier. AXE’s commercials and content are funnier because they create a completely over-the-top male fantasy. And AXE’s content really pokes fun at the male fantasy. This one didn’t really poke fun at male behavior, even though that was AMP’s tweeted intention. Rather it stereotyped women in an often unflattering way.

Having done standup comedy myself I know that offending people is an unfortunate part of the business. It’s hard to get away from it. There are very few comedians that don’t offend anyone. Even Jay Leno who is about as squeaky clean as you get actually has a mean streak as he makes fun of people for their ignorance in his “Jaywalking” segments.

Ultimately, was this application, the community response, and AMP’s response successful? I think it was successful for the following reasons.

1. I didn’t even know what AMP energy drink was before this happened. I’ve now “discovered” AMP.
2. Nobody died and they had an open and honest dialogue with the community about the application, and their intention. They didn’t cave to pressure and pull the application down (the usual response). Rather they engaged in a very open conversation. We’ve seen true social media failures where the communications department runs in around in circles trying to hide their mistake. Those epic failures live on as what not to do in social media. This will not live as one of those examples. Instead this case will live on as an example of how to spin a mistake into a win in social media.
3. They got TRAFFIC! As of Friday last week all of 150 people had download the program. Today, Wednesday, they have over 17,000 downloads, according to an AMP spokesperson I talked with. UPDATE: I talked with the AMP spokesman again, and it turns out those numbers are very dated. As of Thursday morning they had nearly 77,000 downloads of which 75,854 came AFTER the story broke on Mashable. They’re now the #2 free entertainment application, and #12 overall in free applications.

What do you think? Can you argue with success like that? Do you think the PepsiCo/AMP iPhone application was a success or a failure?

I can’t make heads or tails of this, but the cost of mobile applications varies widely between different mobile platforms, or sometimes not at all. There’s no consistency. It’s all over the map. For simplicity, I’ve decided only to compare iPhone vs. BlackBerry applications.

Let me show you some examples:

BlackBerry app more expensive than iPhone app

iPhone/iPod

BlackBerry

iPhone app more expensive that BlackBerry app

iPhone/iPod

BlackBerry

iPhone and BlackBerry app priced exactly the same

iPhone/iPod

BlackBerry

While both BlackBerry and iTunes have many free apps, only iTunes seems to have inventory of $.99 apps. With BlackBerry, after free, the applications cost $2.99 and up. Most wouldn’t think much between $1 and $3, but that is THREE TIMES AS MUCH.

A few top selling $.99 iPhone applications

In this sample I only looked at games, not productivity applications. When you get into that space the price varies even more widely, especially when you start comparing Windows Mobile applications which back in the day could cost hundreds of dollars on Handango. Now productivity applications have come down to a more reasonable arena of about $29, but it’s still violently more expensive than other applications. I’m just confused as to why the pricing of the mobile applications have no rhyme or reason to them. I don’t track the gaming market that closely, but I can say that when a game is released on the three major platforms (XBOX 360, PS3, Wii) it’s priced the same. So why isn’t it the same for mobile platforms?

Possible explanations for the complete inconsistency in mobile application pricing:

• Who cares? It’s usually less than $5.
• Nobody is deciding between an iPhone or a BlackBerry app. They’re deciding whether they’re going to get the app at all, so they never compare prices on other platforms.
• The cost of applications is never a deciding factor when purchasing a mobile device.
• Pricing for mobile applications is far from settled. We’re all still in a “figuring it out phase.”

Got some other explanation? Let me know.