Which players are best positioned to bundle an AI assistant with their core product?
In Sunday’s post, I proposed that AI assistants are best bundled into products that already command high share of usage and high share of data across a user’s digital activity. Accordingly, the players best positioned to play that game range from products with high frequency core usage to super-apps, BigTech, and B2B workflow hubs.
General purpose assistants need to have horizontal coverage across the spectrum of user needs and horizontal visibility across the data they generate.
There’s another important piece of real estate, well positioned to host an AI assistant. It’s widely visible, yet hidden in plain sight. It’s always on and has a fair degree of visibility across a large spectrum of use cases.
The keyboard on your phone.
Consider this:
Always-on primary interface: The keyboard is an always-on interface, covering roughly 40% of your screen every time you type.
Real-time visibility into all user input: It’s the primary mechanism for user input and, hence, a default contender as a primary interface across all use cases that need user input.
Horizontal visibility across the spectrum of app usage: It captures data across the full spectrum of mobile usage, not just data about what you enter as input but also data about how often you engage with different apps, how much time you spend across different apps etc.
The first two points, in particular, provide a unique right to play. Developing user profiles through a comprehensive view of input data positions the keyboard especially well as a complement to any creative use case involving user input (with some exception of use cases involving voice, photos, and video).
While individual apps have deeper data about consumption, the keyboard is uniquely positioned in its ability to capture data horizontally across ‘creative’ use cases (i.e. use cases requiring user input).
With improvements in GenAI, the keyboard is ideally positioned as the point at which an AI assistant or co-pilot sits on your phone. The keyboard offers real estate to:
(1) Deliver organic cross-app personalized recommendations, and
(2) Inform and assist the user across all use cases on the mobile which involve input.
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Solving the keyboard trade-off
There is, of course, an inherent trade-off when you compare the keyboard with other apps.
First, the keyboard only covers use cases where user input (and, hence, intent and expression) are involved. Hence, it cannot extend to 100% share-of-usage and share-of-data and remains largely oblivious to consumption use cases like reading or watching video.
Second, it lacks deep visibility into usage within apps, something that super apps and Bigtech apps have better visibility into (although only within their app kingdoms).
However, what the keyboard lacks in depth, it makes up for with breadth of coverage across all use cases that require user input. It is uniquely positioned to understand the user's mobile usage footprint across apps.
More importantly, the keyboard’s greatest strength is its always-on presence at the time of user input. Combined with AI capabilities and with the screen real estate into which recommendations can be served, the keyboard can act as a powerful tool to enhance your experience across apps, and across the spectrum of smartphone usage.
A well-crafted AI assistant bundled into the keyboard can also help the keyboard move up the value chain from broad uncoordinated assistance to coordinated delivery of use cases. Imagine a scenario where you’re chatting with a friend on Whatsapp about meeting for coffee, receive an offer from a coffee shop nearby, and get the meeting scheduled, all without leaving the keyboard or Whatsapp.
Keyboard wars
The keyboard’s position as a layer across app usage is becoming increasingly important as AI assistance improves.
Early keyboard players - Google with GBoard and Microsoft with Swiftkey - focused largely on improving the typing experience on the phone.
More recently, realising the potential of the keyboard as an AI assistant, Grammarly launched a keyboard to serve grammatical improvements right at the point of text input.
Source: Grammarly
While Microsoft differentiates itself on productivity and positions itself as the most efficient keyboard for typing, Grammarly positions itself towards creative use cases - serving as a writing assistant.
Bobble AI, another keyboard player, positions itself as a keyboard that ranks high on expression.
Expression: Bobble’s IP of creative content - an ever-growing library of stickers, GIFs, and memes, including proprietary IP - helps users express themselves more creatively in chat and on social media.
Recommendations: Further, the Bobble AI keyboard serves recommendations of apps, products, and services in real-time based on the intent users express through the keyboard. If you’re searching for a loan on Google search or expressing that intent over Whatsapp, Bobble AI is well-positioned to serve relevant and personalized offers from lending apps, right onto the keyboard.
Assistance: With the possibility to now also add AI capabilities into the keyboard, Bobble wants to augment its creative keyboard with intelligent assistance, delivering higher productivity. This essentially creates a keyboard that can generate a LinkedIn post at the click of a button, allowing you to make subsequent edits. Or schedule meetings on your calendar without having to switch applications.
(Disclaimer: This post and analysis is sponsored by Bobble)
Winning the keyboard war
With different players taking on different positions, how do you win the keyboard war?
There are four levels at which you need to build competitive advantage in order to win the keyboard war:
Awareness
Performance
Amplification
Intelligence
Awareness
Arguably, the greatest challenge for anyone entering the keyboard war arena is customer awareness. Most mobile users don’t even realize that they can change the default keyboard on their phone and replace it with one of the keyboards above.
With 30 million active users, Bobble has likely surmounted the initial hurdle but awareness remains critical to expanding and winning the market.
Performance
Unlike most apps which retain users through personalization on the core use case, the right to win with a keyboard is first developed through basic performance of the keyboard. Most mobile users view the keyboard as a core utility rather than a tool for creative expression or an intelligent co-pilot to get things done.
To win with the keyboard, players will need to ensure that they deliver performance and reliability on the core keyboard usage experience. This is particularly important when the most dominant substitutes to your keyboard business - Microsoft and Google - are well-positioned technically. Bobble, again, is well positioned to play here with more than 7 years of keyboard technology development.
Amplification
Beyond basic performance, keyboard usage varies with user persona. Those who use it primarily to chat on Whatsapp and create content for TikTok need a different set of functionality compared to those who use it primarily to respond to emails and manage their calendar meetings.
This variance in usage creates a valuable differentiation and monetization opportunity. While the basic keyboard should deliver performance at a free tier, a premium version of the keyboard could bundle in capabilities that appeal specifically to a user persona’s unique needs. This may include providing AI assistance to a business user vs providing access to a creative library of emoticons to a user largely interested in chatting. These bundles - which amplify your keyboard capabilities - can also be monetized differently.
Essentially, the keyboard is a horizontal capability but its usage patterns are vertical (persona-specific). This verticalization presents an important differentiation and monetization opportunity.
Intelligence
Finally, winning the keyboard war requires greater intelligence and personalization over time. The more a user uses the keyboard, the more useful it should become at addressing their specific needs.
Keyboard flywheels
A keyboard that can differentiate itself beyond basic performance as a locus of amplification and intelligence is well positioned to win the keyboard war.
But in order to get there, we first need to solve the awareness problem mentioned above. How do we acquire users to the keyboard at scale?
Bobble has an elegant solution here that has already worked at scale:
As more users use the Bobble keyboard, they amplify Bobble-generated content across their network. This drives a viral effect and attracts more users to the keyboard who come on board intrigued by the interesting content. When a user first sees a unique Bobble-generated sticker shared by a friend on Whatsapp, they get intrigued and some download the keyboard to try it for themselves.
This is, in turn, bolstered by another feedback loop that constantly improves amplification and intelligence:
As users start using the keyboard, they gain value through the AI companion on the keyboard. The more they use the keyboard, the better they train this companion.
Keyboards that rely entirely on productivity lack the viral acquisition power that comes through the content/expression loop. And keyboards that do not embed intelligence lack the growing value of a constantly improving AI companion.
Interested in the keyboard-as-a-platform?
As I mentioned upfront, this analysis is a sponsored post by Bobble.
I believe the story of the keyboard as a vector for competitive advantage on the smartphone is one that is often ignored. The story deserves to be told on its merit alone.
As for Bobble, this combination of a viral acquisition loop combined with a learning loop positions Bobble uniquely well to win the keyboard war.
If you’re interested in the keyboard as an opportunity, Bobble is raising their next round of funding.
If you’d like to have a look at their investment pitch, just reply to this email and write back or drop me a note at sangeet@platformthinkinglabs.com.
About sponsored posts
If you’d like to sponsor a future post on the newsletter, please feel free to write in to liz@platformthinkinglabs.com.
We won’t do company-specific stories but if you’re pursuing an opportunity whose strategy and economics hold important lessons for a wider audience, we would likely have a fit.
Which are the sides for Bobble as a platform?
Thanks for the thoughtful piece.
My early thinking is that GenAI will result in a collapse of Apps.
I do see the potential you have outlined here for the medium term.