There is a confluence of conflicting forces underpinning mobile today and the outcome will define the mobile experience of tomorrow.

Here are two of this morning’s announcements:

1. Snapchat announced they were adding video chat and instant messaging
2. Foursquare’s move to split their app services into two separate apps

On the surface, these may seem like inconsequential developments but they speak forcefully to how the mobile user experience is evolving.

In a recent interview with Mark Zuckerberg, he was asked about the work Facebook’s Creative Labs is focused on.  Creative Labs is an internal Facebook team assigned with “crafting new apps to support the diverse ways people want to connect and share.” In other words, Creative Labs is tasked with leveraging (and one might even say cannibalizing) the popularity of Facebook to ensure the company remains relevant on mobile. Here is an excerpt from the interview with Zuckerberg:

“So Facebook is not one thing. On desktop where we grew up, the mode that made the most sense was to have a website, and to have different ways of sharing built as features within a website. So when we ported to mobile, that’s where we started — this one big blue app that approximated the desktop presence.

But I think on mobile, people want different things. Ease of access is so important. So is having the ability to control which things you get notifications for. And the real estate is so small. In mobile there’s a big premium on creating single-purpose first-class experiences.

So what we’re doing with Creative Labs is basically unbundling the big blue app.”

Jon Steinback, Foursquare’s VP of product experience, describes their decision to break existing Foursquare services into separate pieces as follows:

“I think mobile forced this fundamental switch. We were born in mobile but we were born in this idea that each mobile app was kind of like a web property bundled up for mobile. And as mobile usage has broadened and evolved you get individual experiences instead. You open an app to do a specific task and not as a gateway to a large complicated experience.”

Foursquare – one of the original mobile-first companies – is breaking services into separate stand-alone apps. Facebook, who in addition to beginning to build a suite of stand-alone, single-purpose apps (starting with Paper), is also acquire siloed apps. Last month it was Whatsapp and late last week the Finnish fitness tracking app Moves announced they had been acquired by Facebook. At the same time, you have companies like Snapchat – also a mobile-first company – expanding into adjacent service categories within their existing app structure.

Among other things, these moves speak to user engagement. In the early web environment – when our web experience resided exclusively on the desktop – user-engagement was primarily focused on length and depth of engagement. How long did a user stay on your web property and how deep (ie number of pages) did they go. But this traditional measure of engagement might be changing. Foursquare found that breaking well-defined services into separate apps led to shorter, but more frequent sessions. Frequency is become a key metric for mobile engagement.

Historically, when a large company like Facebook would acquire a smaller company it would integrate the intellectual property (most importantly the team).In some instances, the larger acquiring company might move users over before closing down what had been a competitive service to one of the larger firm’s offerings. Google has a long history of both shutdown companies they acquire but also integrating them into core Google offerings. The Blogger team was bought and brought over. Grand Central ultimately became Google Voice. And earlier this year, Google shutdown Bump – an app it had acquired last Fall. There are thousands of similar examples from Google, Apple, and a long host of companies both inside and outside of the tech industry.

But this model is changing – especially when it comes to mobile. This year Google acquired Waze and Nest. Both are continuing to operate on a stand-alone basis and likely will for the foreseeable future. And despite the generally held fear that Facebook will amalgamate all future acquisitions into the “big blue app,” Facebook continues to operate Instagram as a  stand-alone app.

In mobile we are are seeing conflicting evolutionary paths. The question remains why consumers appear to gravitate towards single-purpose mobile app experiences? Is it driven by time constraints and therefore developing mobile apps that are used for shorter (though more frequent) sessions is the key to success in mobile? Is it being able to launch a specific app “solution” quickly, perform a small finite number of operations, and exit the app as quickly as you entered? Or is it driven by the general inability to multi-task on a mobile device like we can on a PC?

While both of these drivers are likely in play, I think the answer is found more broadly in how mobile has evolved. This also begs the question if single-purpose apps are the steady-state for the mobile experience. If not, should we expect consolidation of apps over time and should we expect to see app service offerings expand? It is worth noting that consolidation is a strong element of industry structure. Most industries consolidate as they mature. This has been true in nearly every sector – from automotive to defense to aviation to consumer tech. More, this consolidation happens at every level of the supply chain. There are not only fewer automotive manufacturers today, there are also fewer tire manufacturers and  fewer gasoline system providers.

Many mobile apps – and certainly a majority of the successful ones – were built with a single purpose in mind. But this is because many of these mobile-first solutions were designed to provide newly discovered “needs” that developed as a result of having an always-on connected device in your pocket. The need created the service rather than the service being ported to the platform. Companies like Instagram, Flipboard, Pulse, Square, Rovio, ZeptoLabs, and yes Foursquare and Snapchat, were born “mobile first” and typically started with one core solution in mind. One of the big reasons we see so many mobile apps with just a single well-defined solution is because consumers are interested first and foremost in a first-class experience and these companies originally set-out to provide a single offering to resolve one well-defined problem.

But as mobile matures we are seeing a number of these mobile-first companies explore changing business models. Many of the early mobile-first companies, such as Shazam, are in the process of exploring how they can expand their growth opportunities. Companies typically expand either (1) geographically, (2) within their segment (vertically), or (3) by entering adjacent segments (horizontally). While many mobile-first companies started with a well-defined solution in mind, they will eventually expand offerings in order to produce growth opportunities. While it might be true today, it doesn’t have to always be true that mobile applications can only do one thing and one thing well. For example,  if Spotify had a strongly integrated Shazam-like feature then I would probably abandon the stand-alone Shazam app.

I’m not suggesting an unbundled mobile experience isn’t what consumers want. But we are very early in the evolution of mobile. The mature mobile platform will look very different than our current nascent mobile platform and right now conflicting forces are pulling in rather opposite directions.  

A Tax haven is a essentially a jurisdiction (often a country) that has taxes, tax rates, or other legal structuring that provides a lower total tax burden than other jurisdictions. The ability to lower or remove a give tax burden provides an incentive for  companies or individuals to establish a presence in these jurisdiction in order to reduce or remove the imposed tax burden of the jurisdiction for which they might currently be domiciled within. This creates tax competition across jurisdictions as these jurisdictions seek to attract businesses and and individuals. As Wikipedia puts it “the central feature of a haven is that its laws and other measures can be used to evade or avoid the tax laws or regulations of other jurisdictions.”

The same aspects that drive corporate entities and individuals to establish a presence within a given jurisdiction because of tax differentials are starting to play-out when it comes to data management. Since the revelation of and concerns around spying from the National Security Agency (NSA) and other concerns of governments’ surveillance of the Internet more broadly both within the United States and other countries in the world, companies are taking a more proactive – and public – examination of where data is stored. As Nick Wingfield and Mark Scott wrote for The New York Times, “in an interview with The Financial Times, Brad Smith, Microsoft’s general counsel, said the company’s customers should be able to “make an informed choice of where their data resides.”

I posit in the coming years we will begin to see countries compete to provide privacy over stored data in many of the same way that countries today are competing to provide attractive tax environments and incentives to entities.

Deflationary price pressures have definitely been evident in the sensor market where motion sensing for example has dropped from over $7 an axis of motion capture in 2005 to around $0.50 an axis of motion capture today. With wearables – and especially with fitness trackers – sensors are a key element of the hardware solution. A move into wearables is a natural move. Input prices are down, demand is up, competition will compress prices and correspondingly margins which all combine to create an attractive business environment for whitebox manufacturers. Perhaps more importantly many of the OEMs have gained important experience with key components over the last few years as they’ve manufactured whitebox tablets and smartphones.

But unlike tablets, hardware isn’t the only element of the solution. For tablets, whitebox OEMs could turn to Android for an essentially of-the-shelf operating system, but no such option really exists for many of the wearable categories. Whitebox smartwatches can run Android, but today most fitness trackers are using proprietary operating systems. The fitness and activity tracker segment is currently the biggest segment of wearables and the most likely place for whitebox OEMs to enter. The fitness and activity tracker segment is currently dominated by the likes of Jawbone, Fitbit, and others and saw many of the major consumer electronics manufacturers like Sony and LG enter the category earlier this month at the 2014 CES.

But the use case scenario for tablets are starkly different than for wearables. While the value-add of activity and fitness trackers lies partially in the hardware and especially within the hardware design, it primarily resides in the algorithms that drive the recommendations delivered to end-users. The interface and mechanisms for delivering these recommendations combined with the algorithmic-derived recommendations themselves have become the key differentiation for fitness trackers. I suspect that should other wearable categories breakout, it will require the proverbial “killer application” and that application will be driven by the algorithm and interface part of device and not but inexpensive hardware. To be successful in the wearables space, OEMs will need to deliver a holistic and full 360 solution that delivers a rich interface driven by meaningful algorithmic-derived recommendations.

Increased rates of digitization are leading to tech design changes that enable dynamic customization of the user experience. Take for example SwiftKey, an Android app that replaces the default Android keyboard on your device. Swiftkey learns not only what you say and how you say it (including across multiple communication channels like SMS, email, or Twitter), but also the physical way in which you say it. Always hitting the wrong key? SwiftKey will reshape the keys to improve the accuracy of your typing. As Ben Medlock, SwiftKey’s cofounder and CTO put it, “A new range of tools are required to solve a new class of problems that didn’t exist 10 years ago.”

I call this new class of tools transformative computing. As hardware becomes software, or rather what were once hardware features become software features, the change of these features from analog to digital allows changes to the user experience to happen in continuum rather than in a stepwise process which is what was required when hardware had to replace hardware. In the case of SwiftKey the physical keyboard has been replaced by a digital keyboard which allows change to be dynamic and continuous based upon user interaction with the device.

Transformative computing also impacts services. Look at how services like Netflix try to provide unique, customized recommendations to each user within a subscription. The recommendation engine (ie the algorithms) can be applied to each viewer ultimately because the entire experience is digital. Video games like Far Cry 3 are also building in more robust dynamics that cause elements of the digital experience to change based upon what the user does within the game. But some of the most interesting early applications of transformative computing is happening when analog hardware features are replaced by its digital counterpart.

The ‘sensor’ization of consumer tech plays a key role in enabling transformative computing.  Nest Thermostats for example utilize embedded sensors to adjust settings that historically would have needed to be physically adjusted by users. The Eversense thermostat can pull down the GPS coordinates from your phone and make adjustments based upon your proximity to your home. The Jawbone up features an idle alert that will alert you if you’ve been sedentary too long and the smart alarm feature is designed to wake you up when you are in a stake of light sleep around a pre-specified time. The forthcoming explosion of gesture, motion, and voice capturing capabilities that is now being embedded into devices will digitize a myriad of hardware features into software features. These features push forward the growth of transformative computing.

The push towards more personal devices also aids the move towards transformative computing. As we move from utility devices like shared desktop computers to personal devices like individually owned and used smartphones and tablets the customization of the user experience becomes more pronounced. A number of apps are starting to appear that provide a contextual user experience.

Sensors are combining with sensor to create sensor arrays. These sensor arrays are combining with computing power to solve complex problems and create complex systems.  The next big step is to combine these complex systems across a wider user experience. This is happening in a real and measurable way in many places, but especially inside the vehicle. Ultimately, this is how we’ll end up with fully autonomous vehicles – complex systems will combine with a large number of complex systems across the entire vehicle experience.

All of this will happen through starts and fits.  Hybrid periods I like to call them.  Here’s the next hybrid period I’d like to see:

My GPS system knows the speed at which I am traveling and also knows the speed limit for the road on which I am traveling.  But right now this information isn’t conveyed to other complex systems in the vehicle – like cruise control. Cruise control is evolving with developments like adaptive cruise control. Utilizing cameras on the front of the vehicle, these adaptive cruise control systems are now able to adjust to vehicles or other objects you are approaching at speed. If (read: once) my cruise control system has full access to my GPS system it could then adjust my speed to some function of the speed limit of the road on which I’m traveling. I could for example always travel the speed limit even though the speed limit is changing as I come into, through, and out of towns and other speed restricted areas.