Yesterday, Facebook had the world buzzing that the era of the native app was nearing an end. But before we write a eulogy for the native app it is important to understand how Facebook's already well known interest in HTML5 really impacts the market.

1. If Facebook succeeds it doesn't create a blueprint for others. Facebook has nearly 700 million users today (more than 200 million mobile) and initiatives in the emerging world are bringing the brand to billions of potential new users. So, if Facebook succeeds it does it because it need not overcome two major challenges other HTML5 apps will face.

a. Discoverability. Facebook need not worry about being discovered. It is a known commodity the world over and does not need an app store to help merchandise it.

b. Billing. Facebook is free so users are not forced to enter a new billing relationship with either Facebook or a billing aggregator to download the app.

2. Facebook doesn't need advanced platform APIs to provide value. Some apps/services will not need to take advantage of the many APIs a phone offers. So, Facebook and others (such as publishers) can release HTML5 apps because they need not keep up with all the APIs a platform offers. Instead they can rely on location and gyroscope (for turning from landscape to portrait) to serve their user base which are already covered in the HTML5 specification. Other companies seeking an edge by leveraging and keeping up to date with new technology however cannot rely on HTML5 to keep up with native app API access.

3. Facebook has a history of availability on multiple platforms. Facebook has a mobile website, was one of the first companies with a native iOS and Android app, launched Facebook Zero to give users access to Facebook without data plans or extensive browser capability. With such a long history Facebook can use that experience to create HTML5 based offerings that overcome challenges other companies may not have even imagined they will face.

To be clear, Facebook has and will be successful with an HTML5 "app". But this success does not mean anything for the broader market. The app store serves as a combination of distribution, marketing, billing, and merchandising and simply transitioning to a new technology only overcomes the albeit huge fragmentation issue native apps create. Another issue to consider is UI integration such as Apple did with Twitter in the forthcoming iOS5. Integration in to other apps will play a critical role in sharing content in the future and in order to win platform support services may need a native app presence on the platform providing additional incentive to continue a native app and HTML5 app world. The future is that of both native and HTML5 apps living harmoniously side by side.

UPDATE: Now comes word that Facebook is finally launching an official iPad app within weeks. This goes to show that native apps are still a necessary component of Facebook's strategy.

Related reports:

HTML5 versus Native Apps

When Publishers Attack, Apple Defends

Much like the one hour photo printing stores of my youth the internet affords us the opportunity to quickly wax nostalgic over recently completed events. Many in attendance are surely recounting tales of seeing Steve Jobs make his grand entrance, of seeing hours of demos, and getting hands on time with the new iOS 5 before heading home. But for analysts we must ponder weightier issues such as how iOS 5 will impact the app ecosystem before we begin the investigation into the missing iPhone 5.

1. Apple continues to evolve its role in gaming. How many times have users lamented needing to again conquer a level of Angry Birds on their iPad after they have already done so on their iPhone (or vice versa). People have more important ways to spend their time - such as playing Angry Birds Seasons or Angry Birds Rio - than dedicating hours to defeat the same levels over and over again. So, one area left underdiscussed was the announcement that app data would be saved which in theory would mean that a gamer can stop playing a game on their iPhone and pick up where they left off on their iPad. This enhances the multi-device value and could convince more developers to build iPad specific versions of their apps because the games will not be isolated experiences.

2. A reminder to developers they must constantly evolve their offerings. On the surface WhatsApp Messenger, Instapaper, Remember the Milk, and a slew of other apps were made obsolete by iOS 5. While many of the features of these apps will be integrated into iOS 5 these apps can continue to thrive. Instapaper for example works on browsers beyond Safari and well beyond the iPad/iPhone to let users archive readable versions of articles for later. WhatsApp Messenger is an instant messaging program that derives value from being cross platform - something Apple Messenger (APPM as I am going to call it) does not. So while Apple will bring many functions to the masses that third party apps offer these solutions can thrive if they evolve. They only become obsolete if they stand still.

3. iCloud is not about multimedia - yet. Let's be honest - iCloud will improve how consumers interact with their personally created content. Synching contacts seamlessly will be an important feature for non MobileMe users, having photos auto synch will make sharing photos and keeping devices in synch simple, and eliminating version control issues with iWorks will save users many a headache when they try to find the most recent version of their long gestating screenplay. But iTunes in the cloud is exactly as it is described. As of today users will not be able to stream content from the cloud, instead being restricted to downloading content over the network to the device. Users can pay $24.99 per year to access non-iTunes "purchased" music from the cloud but TV shows and movies are seemingly absent from this offering as of today. So, what iCloud really is is about keeping content one creates in synch - an extremely important necessity in the age of multiple devices but services like Slacker, Pandora, Netflix, PrimetimetoGo, Hulu, and others need not fear for their business model - today. But much like Instapaper and other have been forced to evolve thinking that Apple does not have designs on grander things with iCloud will leave competitors wondering where their customers have gone when Apple does evolve iCloud further and other services have stood still. And carriers need not fear that networks will be clogged today with excess traffic as users upload and download video with impunity. If/When Apple decides to offer more multimedia streaming - as they surely will do - then carriers can get worried. But there is time to put in place the tools to mitigate traffic and educate consumers on how much bandwidth the song they just downloaded or the photo they just uploaded demanded.

In summation, iOS 5 makes the Apple ecosystem easier to use, increases the value (and stickiness) of sticking in the Apple ecosystem, and fixes many nagging issues that have haunted iPhone users for four years. iCloud becomes the foundation of the iEcosystem today with sights on grander ambitions tomorrow. And with 200 new features and 1,500 new APIs available developers will have a treasure trove of new functionality to do what they have done best - set iOS apart.

For a bit more, feel free to see my interview on NECN news regarding iCloud. 

Related Research:

When Publishers Attack, Apple Defends

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