Summary: Mobile apps currently have better usability than mobile sites, but forthcoming changes will eventually make a mobile site the superior strategy.
The most important question in a company's mobile strategy is whether to do anything special for mobile in the first place. Some companies will never get substantial mobile use and should stick to making their desktop sites less insufferable on small screens.
But if your site happens to have decent appeal to mobile users, then the second strategy question is: Should you produce a mobile website or develop special mobile apps? The answer to this question today is quite different from what it will likely be in the future.
Current Mobile Strategy: Apps Best
As of this writing, there's no contest: ship mobile apps if you can afford it. Our usability studies with mobile devices clearly show that users perform better with apps than with mobile sites. (Mobile sites have higher measured usability than desktop/full sites when used on a phone, but mobile apps score even higher.)
The empirical data is really all you need to know. It's a fact that apps beat mobile sites in testing. To plan a mobile strategy, you don't need to know why the winner is best, but I'll try to explain it anyway.
Mobile applications are more usable than mobile-optimized websites because only limited optimization is possible during website design. An app can target the specific limitations and abilities of each individual device much better than a website can while running inside a browser.
Native application superiority holds for any platform, including desktop computers. However, desktop computers are so powerful that web-based applications suffice for many tasks.
In contrast, mobile devices provide an impoverished user experience: tiny screens, slow connectivity, higher interaction cost (especially when typing, but also due to users' inability to double-click or hover), and less precision in pointing due to the fat-finger problem. The weaker the device, the more important it is to optimize for its characteristics.
Apps can also provide a superior business case for content providers because the various app stores offer a pseudo-micropayment ability that lets you collect money from users, which is harder to achieve over the public Internet.
Finally, let's consider the differences between Nielsen's Law for Internet bandwidth and Moore's Law for computer power. Over the next decade, Internet bandwidth will likely become 57 times faster, while computers will become 100 times more powerful. (Future computers will be monsters compared to the puny hardware we're using now.)
In other words, the relative advantage of running native code instead of downloading stuff over the Internet will be twice as big in 10 years. One more point in favor of mobile apps.
Future Mobile Strategy: Sites Best
In the future, the cost-benefit tradeoff for apps vs. mobile sites will change.
Although I just said that computers will become 100 times more powerful, this doesn't necessarily mean that the iPhone 14 will be 100 times faster than the iPhone 4S. It's more likely that hardware advances will be split between speed and other mobile priorities, especially battery lifetime. So, a future phone might be only 10 times faster (but will be thinner, lighter, and able to run much longer between charges), whereas download times will be cut by a factor 57.
The expense of mobile apps will increase because there will be more platforms to develop for. At a minimum, you'll have to support Android, iOS, and Windows Phone. Furthermore, many of these platforms will likely fork into multiple subplatforms that require different apps for a decent user experience.
For user experience purposes, iOS has already forked into iPad vs. iPhone. Although they officially have the same OS software, the two devices need two very different user interface (UI) designs. (See our free report on iPad usability for tablet usability considerations.)
Amazon.com's recent introduction of the Kindle Fire effectively forked the Android user experience with a fairly different platform. And, as our Kindle Fire usability study concluded, you need a separate app with a separate UI to deliver decent usability on this nonstandard device that's selling like hotcakes.
It's only realistic to expect even further UI diversity in the future. This will make it extremely expensive to ship mobile apps.
In contrast, mobile sites will retain some cross-platform capabilities, so you won't need as many different designs. High-end sites will need 3 mobile designs to target phones, mid-sized tablets (like Kindle Fire), and big tablets. Using ideas like responsive design will let you adapt each of these site versions to a range of screen sizes and capabilities. The same basic UI design will work for both a 6.8-inch tablet and a 7.5-inch tablet if you simply shrink or stretch things a bit. (A 5-inch phone would require a fundamentally different design — not just a modified layout — with fewer features and abbreviated content.)
Most important, new web technologies such as HTML 5 will substantially improve mobile site capabilities. We're already seeing mobile sites from publishers such as the Financial Times and Playboy with UIs that are very similar to applications offered by equivalent newspapers and magazines.
Today, FT and Playboy use sites instead of apps for business reasons, not UI reasons. Publishers are tired of having a huge share of subscription revenues confiscated by app store owners, and Playboy wants to publish more titillating content than Apple's prudish censors allow.
Freedom from censorship and freedom to keep your own money are good reasons to stay with the free Internet instead of the walled garden of proprietary app stores. In the future, better UIs and more adaptive implementations will be additional reasons to go with mobile websites.
A last benefit of a mobile-site strategy is better integration with the full web. It's much easier for others to link to a site than to integrate with a 3rd -party application. In the long run, the Internet will defeat smaller, closed environments.
(Apps may remain better for tasks that are intensely feature-rich applications, such as photo editing — whereas mobile sites will be better for design problems like e-commerce/m-commerce, corporate websites, news, medical info, social networking, etc. that are rich in content but don't require intense data manipulation.)
When Will the Strategy Shift Happen?
Now for the $64,000 question — or, more accurately for most companies, the million-dollar question: When will the recommended strategy change? In other words, when will the changeover in favor of mobile sites be strong enough for you to abandon mobile apps?
Sadly, I don't know. Usability insights can tell us what's best for users under various circumstances, but they can't predict how fast these circumstances will change in the real world. In my experience, things change much more slowly than one might expect.
For example, in September 2000, I said that mobile usability required a device with a deck-of-cards form factor that would "get rid of the keys and spend every available square millimeter on pixels." A few months later, I predicted that European vendors' infatuation with non-web mobile phones would lead to the demise of that continent's lead in mobile technology.
Both predictions came true, but not until 7 years later when the iPhone was finally launched as (a) a device with almost the entire surface used for data, and (b) a product from a computer company rather than a phone company.
Even worse, in 2001, I thought that "Mobile Devices Will Soon Be Useful." Sure, if by "soon" you mean 6 years :-(
Good mobile design was so close I could taste it. I knew what was needed, and I didn't think it was so hard to do. But, as the famous saying goes, don't confuse a clear view with a short distance. As I admitted in my retrospective on my first 10 years writing the Alertbox, when I was wrong about the timing it "was often because I was too enthusiastic about a new technology's potential. When I was right, it was often because I was conservative."
To conclude: I do believe mobile sites will win over mobile apps in the long term. But when that will happen is less certain. Today, if you are serious about creating the best possible mobile user experience, my advice is to develop apps.
The full report with all our research into mobile user experience with actionable design guidelines for mobile sites and apps is available for download.