How to make money on mobile, in three easy steps

I figured, in response to many questions and comments, it was only fair to get a little wonky for a moment about who actually is making money on mobile, or how a site or start-up might try a mix of potentially successful strategies in the future. Here are my guesses.

First, the only apps and companies making significant money on mobile right now are making most of that money off in-app purchases. The apps are free, and if you want upgrades like extra jewels, more levels, additional features and so on, you pay small amounts of money over time. Research house IHS speculates that in-app purchasing would generate $5.6 billion in revenue in 2012, up from $970 million in 2011. That number would equal fully 64 percent of app revenue.
And in-app purchases can take all kinds of forms: it doesn't just have to be buying extra jewels in Bejeweled 2 or the Mighty Eagle to get you out of your Angry Birds jam. It's a popular option in photo filter apps, fitness apps like Skimble are trying it for additional workouts, and the model works fine for subscriptions, as well.

Just buy your way out of trouble, with Mighty Eagle.

Amazon just started testing in-app purchasing, and while it appears that only 2 percent of Android apps offer in-app buying, that really just means it's kind of an untapped market. It's a proven winner, too: 72 percent of revenue from App Store titles on iOS come from apps with in-app purchasing.
So, that's one obvious mixer in the money-making cocktail we're creating here.
The next is retail and leads: a company gets paid because users click on coupons, take advantage of a local deal, or buy things that are aggregated on a mobile site or app. I know Groupon's current stock price would seem to indicate that local deals are a dead end, but I've never seen a busier cul-de-sac. There's still something to the idea of local offers -- maybe not local deals that feel a little off, somehow, but to the concept of letting you know what's around you when you've got your nose glued to your smartphone while you're walking.
Plus, there are in-app commerce opportunities galore. Apps like Karma, which we profiled at South by Southwest, have a simple premise: aggregate products, make it super easy and social for you to buy gifts for people, and then get paid every time you buy one of said gifts. (Why Facebook, for example, doesn't have gift-giving integrated all on its own is just beyond me.) Start imagining a fun, easy-to-use app that's social, offers in-app upgrades, and lets you buy really great curated items either as gifts or based on your interest and location...and you start feeling like you've got a winner on your hands.

Social gift-giving app Karma lets you send actual, real-life tasteful gifts to your Facebook friends.

(Credit: Karma)

Then, of course, you've got the booze in the shaker: ads. Advertising is still the biggest moneymaker in mobile -- it's just had a slow takeoff. You can't blame Facebook entirely for not making any money on mobile (although they should have seen the mobile shift coming and made some alternate plans). Mobile advertising accounts for just 29 percent of mobile revenues because advertisers have been slow to jump in the pool. That means, as Mary Meeker pointed out this week at All Things D, that there is massive growth potential in mobile advertising.
Right now, advertisers are concerned that maybe mobile ad tracking isn't as detailed as Web tracking; publishers are figuring out how one ad in an app or on a mobile Web site can make up for five or 10 ads on a full-sized Web page; everyone is trying to figure out mobile CPMs and targeting that isn't too creepy and how to work with ad networks that can sometimes be more trouble than they're worth.
But as I said earlier this week, these issues will sort themselves out, especially as advertisers and publishers start to see how much money is really on the table. Maybe that money will come in smaller increments, and it will take a creative combination of money-making strategies. But it'll happen; only question is who will get the proportions right first.

New Apple guide details iOS security features

Quietly released guide outlines the security architecture, encryption, and data protection features on the mobile operating system.

Apple has quietly published a detailed security guide for its iOS operating system, suggesting that the company, known more for keeping technical details secret, is embracing a more transparent approach to security.
Apparently released late last week, Apple's iOS Security Guide (PDF) outlines the security architecture, encryption, and data protection features of the operating system that powers iPhones, iPads, and iPod Touch devices.
"For organizations considering the security of iOS devices, it is helpful to understand how the built-in security features work together to provide a secure mobile computing platform," the guide says in its introduction. It goes on to encourage business "to review their IT and security policies to ensure they are taking full advantage of the layers of security technology and features offered by the iOS platform."
Coupled with the App Store submission process, the guide boasts that code signing, sandboxing, and entitlements "provides solid protection" against viruses and malware. Indeed, the guide discusses in detail the process of code signing, which controls which user processes and apps are allowed to run on the OS:

To ensure that all apps come from a known and approved source and have not been tampered with, iOS requires that all executable code be signed using an Apple-issued certificate. Apps provided with the device, like Mail and Safari, are signed by Apple. Third-party apps must also be validated and signed using an Apple-issued certificate. Mandatory code signing extends the concept of chain of trust from the OS to apps, and prevents third-party apps from loading unsigned code resources or using self modifying code.

The document also discusses how address space layout randomization (ASLR) can prevent memory corruption bugs:

Built-in apps use ASLR to ensure that all memory regions are randomized upon launch. Additionally, system shared library locations are randomized at each device startup. Xcode, the iOS development environment, automatically compiles third-party programs with ASLR support turned on.

The guide's publication is important because it seems to be the first time Apple has publicly discussed the aforementioned features. It also seeks to dispel the theory that Apple creates devices for consumers rather than the corporate market.
"Apple is committed to incorporating proven encryption methods and creating modern mobile-centric privacy and security technologies, to ensure that iOS devices can be used with confidence in any personal or corporate environment," the guide concludes.

Google: Chrome's No. 1 (or 2) worldwide

StatCounter, Net Applications, pah. The browser market share figures are weighted, inaccurate and vary day by day. Google, with a firm grasp of its own numbers, gives its assessment.

The global browser numbers race between Chrome and Internet Explorer remains highly contested, but Google has sent the strongest signal yet that Chrome holds the crown as the Web browser leader.
Google Chrome senior vice president Sundar Pichai, speaking at D10, started off noting Chrome's growth:

"Chrome grew roughly 300 percent last year -- we have hundreds of millions of active users. We have many ways of looking at it. You can argue about the data, but in general I think we have gained substantial mindshare since we've launched the product."

Amid the hedging, he went on (emphasis mine)::

"I think it's fair to say that we are number one or number two in all countries in the world. It's fair to say that roughly a third of people are using Chrome; I think it's much more than a third in the consumer space. Most users in enterprise use IE because it takes a long time for that space to upgrade."

Pichai added:

"There are places where our share is over 50 percent today. I think the speed of Chrome is much more notable when you have a slow connection."

What could be seen as a bold statement could also be seen as a Dewey victory. Having said that, only Google knows exactly how many downloads it's had for Chrome, but downloads do not equal installs or active use.
Plus, at least one browser counter suggests Chrome really is in the lead.

StatCounter said Chrome overtook Internet Explorer in May, even after it took into account a pre-rendering adjustment. The research firm said the move did not have any "significant" impact on its statistics.
It currently sees Internet Explorer at 32.12 percent, with Chrome a fraction ahead at 32.43 percent.
It's also worth noting that it is not the first time Chrome has jumped ahead of Internet Explorer, according to the analytics firm. Chrome was the "world's top browser" for a single day on March 18. It's likely the figure jumped on the Sunday because the vast majority were at home and not at the office, where Internet Explorer still dominates the work environment.
But it doesn't mean Internet Explorer can't recoup its losses and claw back the market share it's losing.
On the flip side, Net Applications pegs Internet Explorer at 54 percent with Firefox ahead of Chrome at 19.7 percent and 19.6 percent respectively.

Samsung: We've sold 50M Galaxy S and S II phones

The company is touting 24 million in unit sales for the Galaxy S and 28 million for the Galaxy S II to date.
 
Samsung's Galaxy S II has racked up 28 million in sales since its debut.
More than 50 million Samsung Galaxy S smartphones have been sold since the original phone debuted in 2010, according to the Korean handset maker.
Plugging its achievement in a news release today (English translation), Samsung said that 24 million units of the first Galaxy S phone have hit the sales market since June 2010, followed by 28 million Galaxy S II phones over the past year.
Samsung uses the term "sales." But it's important to note that the company is actually referring to shipments since the numbers point to how many units have been shipped to retail channels. However, the hot demand for the Galaxy S phones means there's likely to be little difference between shipments to retailers and sales to customers.
The news release says that the 50 million in record sales last year was double that of the entire smartphone market. Ironically, the English translation refers to that as a "shame." It's certainly a shame for the rest of the industry, but a high point for Samsung. Collectively, Samsung and Apple have scooped up virtually the entire mobile phone landscape, leaving little but scraps left over for the remaining players.
The company's Galaxy Note has also joined in on the festivities, reaching 7 million in unit sales since its launch last October.
Samsung is probably expecting even hotter sales this year.
The company just released the Galaxy S III phone across parts of Europe and the Middle East, with other regions slated to pick it up early this summer.

Friday Poll: Is Facebook mobile enough for you?

In the shadow of a less-than-stunning IPO, Facebook now faces questions about its long-term viability, especially in the face of the onward march of mobile technology.
 
 Facebook for iPad is an app with a rough reputation.
While Facebook is a pillar of online social media, it hasn't really proven itself to be a moveable feast when it comes to mobile. In a piece this week that got a lot of you talking, CNET Executive Editor Molly Wood looks into how mobile could eventually be the social-media giant's death knell.
Facebook's mobile apps have been notoriously sketchy in quality. It's at the point where I don't even try to download the latest iPad app update, I just use my browser when I want check in on the site.
In IPO documents, the company admitted that mobile is an issue, especially the ability to monetize views coming in from mobile apps.
Facebook is in no danger of immediate collapse, but the trend toward mobile access is undeniable. The IPO documents also included a figure of 425 million monthly active users accessing Facebook on a mobile device in December 2011. That number is only expected to grow.
Facebook may eventually go the way of MySpace. If that happens, a mobile-native replacement may be the hot new commodity that pushes it off the social-media cliff.
This brings us to how you're feeling about Facebook's mobile efforts. Have you given up on the iPad app? Do you use your smartphone's browser to access Facebook rather than tangle with an app?