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Mobile and social profits: Like chasing purple unicorns

By
Don Reisinger
Don Reisinger
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By
Don Reisinger
Don Reisinger
Down Arrow Button Icon
September 7, 2012, 12:57 PM ET

FORTUNE – Staying ahead of the competition in the tech world often seems more like a dark art than any sort of science. Every day brings new product launches, and for one reason or another, some catch on with customers while many others fall flat.

That’s especially true in the Web and mobile markets, where companies with better ideas have come along and changed what it takes to be successful. On the Web, Google (GOOG) and Facebook (FB) found ways to innovate and practically eliminate competitors. In the mobile space, Apple’s (AAPL) iPhone, along with Google’s Android, all but destroyed Nokia (NOK) and Research In Motion (RIMM).

Those companies not only anticipated consumer demand but the forces that drive customer purchases as well. For Facebook, it was about delivering a better social experience. For Apple, it was about understanding consumers’ mobile needs.

Since then, the two factors that made those companies successful — enhanced mobility and social experiences — have become key components in nearly every available product. Nowadays, if a product or company doesn’t have some sort of mobile focus, it looks old. And if a social element isn’t tacked on to software, it’s considered a mistake, and for arguably good reasons.

MORE: Amazon ups the ante in war against Apple

Last year, customer-retention company KISSmetrics released a study it conducted on the impact of mobile efforts on our everyday lives. The organization found that between February 2009 and August 2011, mobile browsers had increased their share of the Web-surfing market by 1,000%. The company discovered that 25% of mobile users expect to access the Internet from their devices at least once a day, and said that Web users are 51% more likely to visit an online retailer if it has a mobile site.

Meanwhile, social media has become an increasingly important aspect of the industry. Research firm Gartner said in July that total social-media revenue — generated through advertising, gaming, digital goods, and other sources — will hit $16.9 billion this year. That figure is up from $11.8 billion last year. And by 2016, it’ll hit $34 billion, according to Gartner.

Consumers are obviously the greatest benefactors of the social and mobile movements, but the enterprise — long the change agent in the technology world — is also playing the game. It’s hard to find a single company, both large and small, that doesn’t use social media in some fashion.

It’s not uncommon for companies to promote their Facebook pages or Twitter feeds rather than their own Web sites. And when given the chance to develop a mobile application or stick to the old days of PCs and Web browsers, they’ll choose the former nearly every time.

Mobile and social haven’t just become favorites in the corporate world, they have become necessities. And yet, so few companies truly benefit from that.

MORE: Apple could buy 60 Pandoras

For example, Google has long tried its luck in the social market, but in nearly every case, its efforts have failed. And although the company claims its latest social network, Google+, is popular, its actual usage figures have been disputed.

Even Apple has had a rough road with social. The company, like so many others in the industry, decided to tack on a social element into one of its products. The winner? iTunes. The loser? Users.

Dubbed Ping, the social element delivers little value to the average user simply trying to download some music. And artists, who would want to leverage the feature, according to Apple, aren’t doing so to the degree the iPhone maker would like.

Research In Motion and Nokia, meanwhile, have entire business models centered on mobility. And yet, consumers who have found more to like in competing devices are ignoring them. And despite countless attempts to the contrary, only a precious few developers have been successful at captivating mobile customers.

Simply having mobile and social elements, in other words, means very little.

Still, it’s highly unlikely companies will stop bundling social or mobile features into their products anytime soon. According to the latest estimates, there are approximately 1 billion smartphones floating around the world right now. Add that to the nearly 1.5 billion social media users, and it’s apparent why so many companies are seeing those spaces as viable targets.

MORE: 9 superhuman innovations

Finding the secret to success, however, has proven most difficult. It’s easy to see why Facebook succeeded — it delivered the right experience to the right users at a time when its chief competitor, MySpace, was getting ugly and unwieldy. And Twitter scratched the itch for those who wanted to quickly express themselves. But why did Google’s ill-fated Buzz fail where Pinterest has succeeded? Why is the iPhone our favorite smartphone and not the Nokia Lumia 900?

Your guess is as good as mine. And today’s consumers, voraciously seeking mobile and social services at every turn, are benefiting each step of the way.

About the Author
By Don Reisinger
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