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It’s six years since Apple launched the iPhone and the age of the smartphone
began. Apple’s App Store was instrumental in leading that development which
sparked innovation and opportunity in the mobile sector. With over 700,000
apps on offer by the end of 2012, the App Store has become a competitive
environment.
He has millions and a new job from Yahoo. Soon he’ll be 18.
The New York Times, 26 March 2013
When 17-year-old, Nick D’Aloisio sold Summly to Yahoo in March 2013 for a
reported $30million it made headlines around the world. Summly was an app
(Yahoo closed it upon completing the deal) that used algorithms (belonging to
someone else – SRI International) to shorten articles (creating summaries of
the important facts) drawn from publishing websites. The app had been
downloaded over 200,000 times through the App Store, had summarised over
90 million articles, yet it had not implemented a business model nor made a
profit. It was simply a good idea, smartly executed.
Success stories like this one illustrate how the technological revolution has
moved from the PC to mobile devices. In this first tutorial, we’ll explain to
you what mobile means, explore the trends as people switch from mobile
phones to smart phones, from PC to mobile and from gaming consoles to
smart phones and tablets. We then move on to examine how people interact
with their mobile devices, as understanding these trends will help shape and
refine your ideas for an app, before we start the process of your turning your
app idea into a finished app, research.
if you have a good idea, or think there’s a gap in the market, just go
out and launch it because there are investors across the world right
now looking for companies to invest in.
Reuters
History Of Mobile
The first mobile computing device was arguably Casio’s Calculator watch,
which debuted in the early 1980s and enjoyed its very own retro revival a
couple of years ago. That being said, when people these days think of a
‘mobile’ or ‘cell’ then it’s their phone that they are referring to, and these
devices have enjoyed adoption amongst the human race like almost no
product that has gone before them, with nearly 5,000,0000,000 active
mobile users and handsets around the world today – that’s 5/7’s of the
World’s population connected.
Mobile communications have spread beyond the simple voice calls which
inspired the work of Alexander Graham Bell who invented and patented the
first telephone in 1876 – today we have Skype for ‘free’ video calls, text,
picture and instant messaging all enriching the ways we can relate to each
other.
Asia, and particularly Japan and Korea were at the forefront of mobile
adoption during the 1980s, creating telecom networks and services that
captured the public imagination and were quickly adopted. Europe soon
followed, before North America, led by Canada, caught up with the
functionality and useability of these new tools.
By 2000, this trend had spread to Africa, South America and the rest of Asia
stimulating massive growth of the telecommunication and hardware
companies. These days, farmers in Africa will receive text messages from
their relatives in the local town advising them of market prices that day,
bringing information to them quickly, cheaply and reliably, that in the past
would have taken an arduous day or more to obtain.
Apple revolutionised this in 2007 with the release of the iPhone, with its iOS
operating system making it simple to carry and access all your music, to
take, store and share photos and to access the web, all from your phone.
This operating system was matched with powerful hardware, effectively
bringing a computer to your pocket. Phones had become smart, and in no
way was this better demonstrated than with Apple’s touch screen
technology, which drew the user into and connected them with the device in
a way that bonded them to it. The iPhone was cool.
History Of Mobile Continued
As with the iPod five years before, Apple’s revolution did not stop with the
device itself. The creation of Apple’s App Store stimulated a new industry of
entrepreneurs, application developers and system designers who could
now build and sell software for the iPhone, improving the functionality and
useability of the device. App ideas could now be implemented by anyone,
not just Apple’s engineering team.
The pace of innovation since then has been dazzlingly, with Apple’s iPad
now finally delivering the promised tablet revolution to PCs that Bill Gates
predicted Microsoft would do a decade ago. Apple and Google have
created the fastest adopted technology revolution in history, with growth 10
times faster than the personal computer revolution and 3 times faster than
the Internet revolution of the late 1990s.
With Google Glass in developer trials and both Google and Apple
rumoured to have a smartwatch in development and close to being
released, mobile computing may be about to return to where it began over
30 years ago; your wrist.
Apple iPad
What is meant by mobile?
When you think about mobile, what do you think of? Most people instinctively
think of their phone, something that is always on them, that they rarely leave
home without – that they use on the bus or train on the way to work, whilst at
work, at lunchtime whilst out shopping and after work in a bar organising catch
ups with friends. However, the functionality of smartphones and the rise of
tablets are expanding this already broad definition of mobile.
If you already own an iPad or other tablet, then I suspect you don’t restrict
yourself to using that at your desk, in a study. No, the tablet, as well as the
smartphone, has taken those activities we were accustomed to restricting
ourselves to a PC to conduct: web browsing, online games, product
research and purchase and released them to all areas of the home.
If Mom wants to make something different for dinner tonight, is she restricted
to the cookbooks she already owns on the bookshelf? No, not only are there
thousands of recipes now online, but also eBooks bought through either
Amazon’s Kindle or Apple’s iBooks, or stand alone apps like the award
winning and hugely profitable Jamie’s Recipe’s (produced by Zolmo in
partnership with Jamie Oliver) mean that she can create dinner from a
knowledge pool of millions of recipes, all of which can be accessed on her
iPad in the kitchen.
Dad wants to research buying a new car; must he sit at the PC to get online
and read reviews as well as gain access to car manufacturer’s websites? No,
he can sit on the sofa whilst the family watch television and browse on his
iPad, whilst his 13 year old son may be playing Angry Birds on his iPad Mini
and his 4 year old daughter may be learning to write, using the Red Writing
app on Mom’s iPhone. Such habits have become so common, marketers now
have a term for them: “second screening”.
This then is what mobile means – freed from the desk, the power of that
PC can now be accessed anywhere and everywhere. There’s more
computing power in a smartphone today, than was possessed by the whole of
NASA in 1969 when they sent man to the moon.
Move From Personal Computer To Mobile
Whilst growth in personal computers has plateaued since the release of the
iPad in 2010, growth in smartphone ownership has taken off since 2009 and
continues to grow at staggering rates, whilst tablets have also now crossed
the chasm and are being adopted by a mass audience.
In its 2012 financial year, Apple sold 125,040,000 iPhones and 58,230,000
iPads, up from 72 million iPhones and 32 million iPads in its 2011 financial
year – growth rates of 74 per cent and 81 per cent respectively. Samsung
sold 211,530,000 smartphones, but has not released sales figures for its
tablets in 2012, which suggests disappointment in the numbers. Samsung
have announced an intention to double their tablet sales in 2013, with a
projected 40 million sales and are enjoying success with their hybrid (5-6”
screen) devices, nicknamed phablets.
IDC predicts that the tablet segment, having enjoyed 78.4% year on
year growth in 2012, will surpass desktop PCs in 2013 and portable
PCs in 2014. IDC said it expects the market for tablets to enjoy growth of
174% between 2012 and 2017, whilst the market for desktop PCs will
decline by 5% over the same period. Whilst the number of portable PCs will
also rise, sales of these will also be dwarfed by tablet sales by 2017.
Tablets are taking over the home PC market. Whilst it’s true that tablets
remain a device mainly used to consume, rather than create, content, they
are consigning the home PC into obsolescence. This trend is likely to
continue as people become more familiar and comfortable with their tablet
devices over time, then that familiarity will build their trust and they will
become comfortable in processing payments through them (mirroring the
lifecycle that has already occurred on the web). When this trust comes, then
mobile commerce sites will quickly catch up with traditional web stores, as
people move from researching their product purchases on their tablets and
completing them on the home PC, to conducting the whole process from the
couch, kitchen or bathroom (!) on their tablet.
Whilst smartphones still dominate, tablets are catching up. This trend is only
likely to continue, with Apple’s iPad mini, which it launched to compete with
the cheaper imitations like Amazon’s Kindle Fire and Google’s Nexus 7, now
rumoured to be the number one selling tablet, despite it still being priced at a
significant premium over the Android devices.
200
150
100
SMARTPHONE OWNERS
50
TABLET OWNERS
Millions 0
MAY 10 AUG 10 NOV 10 FEB 11 MAY 11 AUG 11 NOV 11 FEB 11 MAY 12 AUG 12 NOV 12
Apple
The iPhone was never conceived to be a phone that did a few extra things,
rather it was from its inception, a multi function device that could make calls,
send and receive emails, store your music, let you play games and access
the Internet as easily as from your pc.
Samsung supplied Apple with many of the component parts of the original
iPhone and there is little doubt that their own success in the smartphone
sector has been assisted by the inside knowledge they had of Apple’s
products. Apple’s annoyance at this is ably demonstrated by the long
running and very expensive patent litigation that the two companies are now
involved in globally. That said, Samsung remain a key supplier of Apple,
who continue to outsource much of their manufacturing.
Nokia
Nokia’s big strategic play was made in 2011 when they announced their
partnership with Microsoft for operating systems for their smartphones.
They later explained their reasoning for this was a belief that, despite its
open source availability, one hardware manufacture would emerge, from
what was at that time in the late noughties an even pack, to dominate the
Android platform. In this, they were proven to be correct.
Blackberry
It seems strange now to think that Blackberry dominated the smartphone
market in 2007, its anywhere email and instant messaging services being
killer apps that saw corporate employers purchasing them for their staff, as
well as celebrities buying them for themselves.
Blackberry Z10 Despite the Blackberry 10 Series of phones being well received by the
industry, Blackberry reported sales of only one million in the first quarter of
2013 and a drop of global subscribers to 76 million. That said, the one
million in sales represents a fifty per cent increase in the rate of uptake over
any preceding Blackberry device and the user experience feedback has been
very strong.
The hardware wars of 2013, have ended with Apple, Google and Samsung,
the clear winners.
The Leading Software Systems
Two platforms dominate - Google’s Android and Apple’s iOS
Smartphones
Historical trend since June 2009
The rapid change of dominant players in the global market for smartphones
is clearly highlighted by the chart below, with Symbian’s decline and
Android’s rise being the 2 most notable trends.
100%
90%
80%
Symbian
Share of Global Unit Sales
70%
60%
Other
50%
Microsoft
40%
Blackberry
Apple
30%
20% Android
10%
0%
Q32009 Q42009 Q12010 Q22010 Q32010 Q42010 Q12011 Q22011 Q32011 Q42011 Q12012 Q22012 Q32012 Q42012
Source: Gartner
So, whilst Android and Apple appear to have established themselves as the
dominant global players in the smartphone market, this equilibrium could yet
be disrupted again in the near future. Any app developer must remain
alert to new trends, as change often presents new opportunities.
US Smartphone Operating Systems
By Market Share At The End of 2012
Whilst a mature market, the United States remains a hub of technological
innovation, with app developers not only centred around the traditional hub
of Silicon Valley, but also now creating new technology hubs in New York,
Austin Texas and even Las Vegas. The access to talent, finance and know
how in these hubs, coupled with the wealth and size of the United States
market, continue to make it a critical market for innovative app companies,
even for those founded overseas, such as music streaming service Spotify.
The table below shows that Android’s global dominance is mirrored in the
United States with it being installed on over half of all smartphones.
Tablets
Whilst those numbers make uncomfortable reading for Microsoft, IDC has
predicted that the market share for Windows powered tablets will reach
10.3% by 2016.
The Problems With Android
The first version of Android that Google released in 2008, was a far weaker
and less mature operating system than the first version of iOS that appeared
on the iPhone in 2007. Iterations of the Android operating system have
therefore been more major and more frequent. In addition, the open source
nature of the Android environment has created an eco-system where
both hardware producers like Samsung, and wireless carriers, have
tweaked their own, ‘proprietary’ versions of the operating system.
d
a 48% Gingerbread b 0% Donut
a
c 2% Eclair d 29% Ice Cream Sandwich
f
g
Key reasons for this have been the fragmented nature of the Android
ecosystem, caused by there being a large number of older versions of the
operating system still in circulation (if you want your app to work on older
devices, you must tweak the development for all of them) and because of
the plurality of hardware makers utilizing it, meaning not only a multitude of
screen sizes to design for, but also a disparate array of tweaks to the
operating system.
$6,000
$5,000
Other
$4,000
Android
$3,000
$2,000
Millions $0
2008 2009 2010 2011 2012
Source: iSuppli, Forrester Research, company releases, BII estimates
In June 2012, Flurry Analytics estimated that iOS accounted for 76% of app
revenues, whereas Android only had 24%. This is a staggering statistic, given
the domination of the Android operating system, so how can it be explained?
For the most part, Android phones are cheaper than iPhones, with a carrier’s
sales staff often on higher commissions to sell them, compared to Apple
products (which have more tightly controlled margins). This suggests that
many Android users may not actually be that interested in what their
smartphone can do and what apps they might download and interact with.
Rather, they were just upgrading their old mobile phone at the end of their
contract, took the best priced option offered by the charming sales staff, and
are not that interested in engaging with it other than to make telephone calls
and send text messages and occasionally browse the web.
Another contributing factor to this trend, is that the low cost nature of the
Android devices naturally appeals to the more thrifty consumer, so we may
expect the consumer’s thrift to also apply to their appetite to purchase apps
through the Google Play Store, with them preferring free over quality apps.
Historically, Apple’s App Store has offered greater consistency and been
easier to navigate than Google Play stores, which have suffered by having
multiple variants supported by different carriers and hardware producers. In
addition, many consumers have and trust their Apple account from their
iTunes use, meaning they are much more comfortable processing payments
through Apple’s App Store.
Consider Also The iPad’s Advantage
At the moment, the iPad continues to dominant sales in the tablet
market as well as iOS dominating revenues. So, if you’re either considering
a tablet app, or a phone app, which will later be supplemented with a native
tablet version, iOS has a considerable lead over Android.
This is because the coding language remains consistent, for example in iOS
you have, Objective C, whereas Android is coded in the Java language
(don’t worry if these are foreign to you for now, as we’ll walk you through
these and other languages in Tutorial 3). If you build the app for Android first
and in the future elect to develop the app for the largest tablet market, the
iPad, you’ll need to run through nearly every step of the development cycle
again, whereas jumping up from iPhone to iPad, is simpler and cheaper.
Also worth keeping in mind is that if you do build an Android app for, by way
of example, the Samsung Galaxy S4 phone, porting that to, say, the
Google/ASUS produced Nexus tablet, or even between two Samsung
manufactured devices, is unlikely to be as easy as between the
homogenised devices of Apple.
100% Other
Android Tablet
90%
Android
80%
70%
60%
iPhone
50%
40%
30%
iPad
Source: Monetate
20%
10%
0%
Q1/2011 Q2/2011 Q3/2011 Q4/2011 Q1/2012 Q2/2012 Q3/2012 Q4/2012
The Demise Of The Web; Rise Of The App?
Google is one of the World’s largest and most innovative companies, but if
there is one thing that may keep them up at night, it’s the potential that apps
may evolve to replace the web as the main source of our information.
“It’s less and less likely that we’ll use a browser to find stuff [in future]” says
Geof Heydon, business development manager ICT Centre at Australia’s
chief science organisation, the CSIRO. Leading international research firm
Gartner supports this opinion, predicting that by 2016, use of mobile apps
will surpass that of internet domain names, making mobile apps the
dominant means of engaging with brands.
So, what is driving these bold predictions? Well, apps are likely to develop
to do the thinking for the user and provide a faster and better experience for
their user, than a traditional web search. This in part explains why Google
continue to innovate and improve their core business of search, because if
we as consumers can find the information we wish to look for via a quicker
and more reliable route, then we undoubtedly will.
Google’s own concern at this potential trend can be seen in their creation of
Android. Google released Android as open source software, without a
licencing fee. Google’s generosity in this regard is explained by
understanding that Google, for all its products and innovations, remains
primarily an advertising company (and a very successful one; over $43
billion in ad revenues in 2012). Its motivation in creating and releasing
Android then, was to give it, and its adverts, access to the new mobile
platforms.
Things that may save the web, are hybrid platforms like HTML5 which run
apps through mobile browsers (we’ll talk more of this in Tutorials 2 and 3),
the generally poor search engines that currently empower the app stores
and the fact that people won’t be abandoning their desktops at work anytime
soon.
We’ll look at this more in Tutorial 2, but apps can also be designed to
know and remember details about you. For example, Foursquare knows
what your favourite places to hang out are, be they cafes, bars or
restaurants. Weather apps remember what cities weather you’re interested
in, be it Tokyo, New York, London, Sydney or Denver Colorado. Ultimately
this and other information that apps retain, or that you input into your apps,
may make them more personal and relevant to you than your web browser.
Total Mobile App & Web Duration On Android iOS
160
140
Minutes Spent Per Month (Billions)
120
100
80
Apps
60
40
20
Mobile Web
0
Mar11 Apr11 May11 Jun11 Jul11 Aug11 Sep11 Oct11 Nov11 Dec11 Jan12 Feb12 Mar12 Apr12 May12 Jun12 Jul12 Aug12
There are 2 dominant stores for the selling of apps; the first to be
launched, Apple’s App Store and the store that supports devices running the
Android platform, which having undergone a couple of re-brandings, is
currently called Google Play.
What’s more, Apple announced in February 2013 that it had paid out a
further $1billion to developers in a little over a month following the Christmas
2012 holiday season. Many customers have an existing iTunes account with
Apple, which they trust to process payments.
Those are the positives. The potential pitfalls, include Apple’s stringent, to
the letter, enforcement of their App Store Review Guidelines. There
have been many instances of Apple denying access to apps based on
ambiguous terms in their guidelines, as well as updating their guidelines to
later preclude certain types of apps (AppGratis below) and applying their
guidelines more rigorously on an update, raising new infringement issues
they failed to mention with the apps initial release. Apple’s review process
often takes longer (up to 2 weeks) than rival stores and the store represents
the most mature and competitive environment. This approval process can be
particularly annoying in the context of releasing any critical updates of an
app and has threatened established businesses such as it pulling AppGratis
(an app discovery/promotion app) from the app store in April 2013 (a French
company, which had raised $13.5million in venture funding based on their
established and proven business model only 3 months early).
The App Stores
It’s been reported, that Google has recently taken measures to reduce the
number of spam and malware apps from the Google Play store, deleting
60,000 apps in February 2013. Instead of reviewing applications ahead of
publication on an individual basis, like Apple and Microsoft do, Google takes
the opposite approach scanning the Play Store after they’ve gone live. This
means there’s less chance of an app being refused entry, but more chance
that it may offer its users a buggy experience and be pulled after entry.
Blackberry World
As with Microsoft, the youth of Blackberry’s App World currently creates a
good opportunity for app developers, as does the support and tools that
Blackberry have created to encourage developers to produce apps for the
new Blackberry phones. With 15% of apps in the store currently being ports of
Android apps and 10% being web apps, there remain about 75,000 native
Blackberry apps – so approximately 10% the number of native apps in Apple’s
App Store.
Blackberry provides a native software developer kit (SDK), and there are tools
including HTML5, Android Runtime and Adobe Air.
As with Microsoft, the size of the opportunity presented by this store, depends
entirely on consumers’ future uptake of the new hardware.
Estimated % of app
App Store Age of revenue $ Paid to
number of the store developers
apps paid to
developer
Apple 800,000+ 6 years 70 $8 billion +
A key stat here then, is that Apple remains the only App Store operator proud
enough of their sales figures to publish them. Whilst Google Play has caught
up in terms of the volume of apps being offered and may soon overtake Apple
in this regard, it remains telling that they don’t publish how much they have
paid to developers.
As for opportunities, then both Microsoft and Blackberry have app stores that
are sparse in comparison to Apple and Google. These then present less
competitive environments in which to launch your app. What’s more, both
multinational companies are creating tools and incentives for developers to
choose to launch on their platform first. Certainly, when taken together, these
factors do present an attractive opportunity and if you’ve a limited budget and
are looking at a minimum viable product to use to attract further investment,
then they are worthy of consideration. The great unknown, and the risk,
remains what the consumer uptake of these platforms will ultimately be – the
size of the pond, may constrain the size of your fish.
The App Stores
Smartphones Tablets
c d c
e de
b b
f
a
a g
The United Kingdom and Japan are two of the most mature smartphone markets, yet users in the UK
tend to average only 6 app downloads, whereas users in Japan average 10 apps (66% more). What’s
more, whereas in Japan smartphone owners rely on search (71%) and portals (53%) to navigate the
Internet, their UK counterparts increasingly do so directly.
Owners of smartphones gravitate to games and social networks, although usage trends vary between
countries. In China, where smartphones are enjoying tremendous sales growth, users are most likely to
access weather and news apps, whereas users in the United States more often watch videos
70%
60%
50%
40%
30%
20%
10%
0%
Social Networking News Music streaming Video Mobile TV
South Korea China Australia United Kingdom United States Italy Russia Brazil Turkey India
Source: Nielson Smartphone Analytics
Tablets
Smartphones
Activity Device time used on
Games 39%
Social networking 24%
Utilities 17%
Health 3%
Lifestyle 3%
Entertainment 3%
Other 11%
Source: Flurry Analytics, September 2012
Tablets
Activity Device time used on
Games 67%
Social networking 10%
Entertainment 9%
Utilities 4%
News 2%
Productivity 1%
Other 7%
Source: Flurry Analytics, September 2012
How People Use Mobile
Device Ad
Interaction Description
Usage Effectiveness
Seeking relaxation or
“Me time” entertainment
more than games (watching a video, 46% 23%
reading a gossip site
window shopping)
Seeking a product or
Shopping service 12% 39%
Managing productivity,
Accomplishing 11% 47%
health and finances
Planning for upcoming
Preparation 7% 27%
activities
Seeking news and
Discovery 4% 17%
information
Participating in hobbies
Self-expression 1% 37%
and interests
It’s important to remember this data was pulled from a survey of American
consumers, so if your app is launching in a different market, then motivations
in that market are likely to vary.
The figures clearly show that targeting people with ads during their “me time”
is much less effective than targeting them whilst accomplishing. This, of
course, is why Google and their Adwords have been so successful –
engaged relevance.
It also confirms that these days mobile means, ‘freed from the desk’, rather
than ‘out and about’ – with 68% of all usage happening whilst in the home.
Leading Categories of Apps
Which apps do people use?
Whilst app usage continues to grow, the popularity of certain types of apps
is country and culturally specific. China and the United States remain the
two highest app users overall, with games being the most popular app
category for smartphones in more than half the countries sampled.
In Australia, games are the most popular types of apps, with 53% of
smartphone users engaging with them regularly, with social networking apps
being the second most popular category, with 50% of smartphone owners
regularly using them.
Social
Country Games Networking Video News Maps Weather Banking Retail Productivity
% % % % % % % % %
Australia 53 50 19 25 45 46 32 21 14
Brazil 68 67 49 45 51 37 36 26 24
China 70 60 56 55 63 62 48 44 40
India 39 29 29 13 14 10 14 11 11
Italy 52 47 22 33 46 39 17 17 14
Russia 60 53 42 39 52 48 31 18 53
South 61 49 36 54 61 62 47 40 11
Korea
Turkey 32 49 14 10 5 9 6 4 1
UK 54 58 24 38 45 43 26 28 14
US 61 85 65 38 84 48 53 53 74
Source: Nielsen Global Smartphone Insights, first half of 2012; Nlelsen Mobile Insights, 2012, US Nielsen Smartphone Analytics
According to App Annie, one of the leading trackers of app usage, the top10
categories of apps by revenues for iOS in January 2013 were:
Place Category Change on Jan 2012
1 Games -
2 Productivity -
3 Social networking Up 9
4 Entertainment Down 1
5 Education Down 1
6 Music Up 1
7 Books Down 2
8 News Up 1
9 Photos and Up 4
10 Lifestyle Up 1
Source: App Annie Index TM
Games
iPhone Apps
It’s easier then to find a business model to support your app idea, if it is a
game than any other type of app. However, game development is a
specialised and mature industry, with most of the large console (EA),
Facebook (Zynga) and arcade (King) platform companies now competing
across the mobile platforms along with the prodigiously successful Angry
Birds (Rovio), which alone surpassed over a billion downloads in 2012.
That said, with an expectation that mobile content will be a $12billion market
in 2013 and with games dominating that market, even a moderately
successful game may bring a great return on investment.
Social Networking
It’s not only Facebook driving the rise in revenues for social networking
apps, but messaging apps with Line (mainly Asia and Spain but launching
into the US), WhatsApp and Zoosk leading the way. You’ve probably
already used one of these apps, which allow you to send text, photo and
increasingly short video messages to friends and family over wireless
networks, instead of by traditional SMS or MMS, for which your carrier
charges more.
The United States and China combine to account for half of all social
networking downloads worldwide, with Facebook Messenger surpassing
Facebook’s own app in popularity.
The above map produced by Flurry Analytics, breaks the world into regions
based on mutual similarity in the state of their local mobile ecosystem – so
Australia, United Kingdom and United States have all been at the forefront of
the growth in smartphones, whereas the markets in other G20 countries
such as Germany and France are no more advanced than in the developing
BRIC countries of Brazil, Russia and India, whilst both China and Japan
offer such unique environments (the former for size, the later for revenue
generation per user) as to warrant their own, distinct region.
The Local Markets
Whilst the opportunities are global, it’s important to understand your local
market, or the local market you intend to launch in. According to Nielsen’s
February 2013 report, mobile phone penetration in the main global
markets in the second quarter of 2012 was:
These figures show remarkable consistency through the three main English
speaking markets of the United States, United Kingdom and Australia. So, if
you app’s users in the United States are, for example, predominantly
females between the ages of 25-34, you’re likely to have more success
launching next into the United Kingdom or Australia than Brazil, where
female smartphone usage is much lower (in addition to the language and
other localization issues).
When you submit your app to the app stores, you will designate which
countries and regions your app will be available in. Obviously, if you intend
to launch into markets where English is not the dominant language, then you
may need to consider localization: translating your app into the local
language, processing payments in local currencies and other factors which
may be more technically challenging and expensive than you expect.
Understanding regional trends is crucial to the future strategy of your app.
You’ll also need to be mindful of the legal implications within each market
you launch in, which we’ll talk more about in Tutorial 8.
The growing middle class in China has seen the numbers of smart devices
there grow from being about half those in the United States in January 2012,
to overtaking the United States in February 2013. With China having a
population of 1.3 billion people, compared to the 310 million people living in
the United States, this lead will now continue to grow.
250
Active iOS & Android Devices, U.S. Vs China (millions)
200
150
100
50
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb
11 11 11 11 11 11 11 11 11 11 11 11 12 12 12 12 12 12 12 12 12 12 12 12 13 13
With Google Play not widely available in China, a barrier to entry has been
the multitude of Android app stores, over 200 in the region. As the market
matures, how to navigate this environment is becoming clearer, with
CocoaChina saying there are six worth paying attention to: Qihoo 360 app
store, Wandoujia, 91 Mobile, UCWeb, Baidu, China Mobile’s app store and
Google Play.
This and the growing importance of the other BRIC countries (Brazil, Russia,
and India) as new, immature markets for smartphones has provided much
fuel to recent speculation that Apple may be developing a cheaper, entry
level iPhone, so as not to miss out on these opportunities to Samsung.
With an extra 1.2 billion people in India alone, these markets offer
entrepreneurs enormous untapped potential.
Will An App Help My Small Business?
Sheri Gurock, co-founder of Magic Beans, a retailer of toys and baby gear,
in the Boston area of the US, built and deployed an accompanying app as
early as the summer of 2010. Working as a testing ground for a local
developer, Magic Beans received the app for free.
The AisleBuyer app allowed customers to scan a bar code to get product
information, descriptions and reviews previously only available to customers
shopping online, as well as allowing them to buy their purchases through the
app, rather than at the register.
Average revenue per download (ARPD) for paid apps on the iPad is $4.04,
versus $2.25 on the iPhone in the Apple App Store in the US. The ARPD of
freemium (that is, apps which are free but then have charges within the app)
apps in the US Apple App Store was found to be $2.26 on the iPad, versus
$0.93 on the iPhone. In analysing these numbers, it’s important to
remember that the number of iPhones in circulation remains much larger
than the number of iPads, meaning total revenues for an iPhone app are still
likely to exceed those of an iPad app.
Whilst the ARPD was similar across the United States, United Kingdom and
Germany at around a $1, it is over three times this in Japan, at $3.52, a
figure achieved whilst excluding Puzzles and Dragons (the number one
grossing game in Japan, which bias would have raised the ARPD for Japan
to a much larger number). The choice of geographical market can therefore
have a significant impact on an apps revenue generation.
Future Trends
(1) Wearable Technology – It’s now widely accepted in the media that
Apple have a development team of at least 100 people working on an
‘iWatch’ device. The Financial Times has reported that Google are working
on an Android watch device. As seen with the latest Samsung smartphone
and Nike’s FuelBand, it’s likely that the trend of this wearable technology
being used for self-measurement and improvement is likely to continue.
Nike was rumoured to have sold out of its FuelBand in less than 4 hours
Nike’s FuelBand upon its release in early 2012.
(2) Google Glass – In development by Google for over 10 years, these are
now in trials with developers, with Google looking to learn how people might
utilise them and what apps may be built for them. Confirmed to be
compatible with both iOS and Android devices, they are expected to go on
sale in late 2013 or early 2014. Already, however, there is speculation as to
how people will react to wearers of the glasses, with the possibility that
seemingly private and uneventful moments may be recorded without others
awareness or consent. Arguably more ominous than that, is what data
Google may extract from wearers of the devices – your smartphone can
already tell people where you’ve been and what you heard, now your smart
glasses may also tell people what you’ve seen.
(3) Near Field Communication (NFC) – Rather like Google Glass, NFC has
been a decade in the making and no one is yet certain that it’s about to take
off. It is a contact-less radio technology that is capable of transmitting data
between two devices within a few centimetres of each other. Combined with
a security chip to encrypt data, it may revolutionise consumer experiences
from paperless ticketing (of concerts and commuting), to replacing the need
to carry cash and credit cards, with money being drawn directly from your
bank accounts via your smartphone.
Now, you have a solid understanding of the mobile industry, its markets,
trends and opportunities, it is time to start focusing on developing your own
idea. The process of developing an app may be broken down into the
following stages:
1. Concept – Tutorial 2
Don’t rely on a single idea. Game developers often come up with 100s of
ideas before they settle on the one they will develop. Put together a list of
all your ideas, then, with the help of colleagues and friends, pick the best
dozen or so. A robust process of exploring different ideas is more likely to
ultimately bring reward, than backing your initial light bulb moment.
2. Design – Tutorial 4
Rovia’s Angry Birds You have a limited amount of time to entice users, so decide on 2 or 3 key
features that will deliver really well and will really delight your customer.
Then split the design process into 2 channels, user interface (how the user
interacts with the app) and system (how your app responds to the user).
Many successful apps have grown virally from creating a great user
experience moment, as this prompts people to demonstrate it to their
friends.
3. System – Tutorial 3
Time to think of the nuts and bolts behind the interface. If you don’t have
programming skills, time to start the hiring process for a developer.
Consider what data the app will need, how it will access this data reliably
and quickly and how the app will express this data to the user in an
engaging way.
6. Development – Tutorial 6
Now comes the heavy lifting. Finalise your product team and start the
coding process. Build a prototype that resembles the real app. You’ll need a
programmer to start getting some stuff up on the screen, an artist who works
out what it’s going to look like and a designer to provide guidance on the
user interface. Decide on your role and recruit the others.
9. Marketing – Tutorial 9
With more than a million apps in the stores and thousands of new ones
being developed each week, marketing apps is a must. Show to reviewers,
bloggers, create social media pages and think about filming a trailer for
YouTube. The icon and name alone can make or break your app.
This forms the basis of the journey that we’ve mapped out for you over the
following nine tutorials. Assessments are voluntary and each consist of 20
questions or less and have been designed to ensure that you have
remembered the most critical information from each Tutorial. You can refer
to your materials and should you not get all of them correct on the first
attempt, you can repeat the questions at your leisure until you pass.
We’re conscious both that you’ll wish to protect your own idea and that we
continue to work on developing our own apps, whilst running the AppInstruct
Course. For this reason, each of the following tutorials also comes with an
accompanying Worksheet (found in the Resources section of the
Dashboard) designed to help you develop your own app idea. Completion of
these Worksheets is not assessed and is voluntary. We hope you’ll find them
a very useful resource in helping create your own app.
We believe that with consumers continuing to try so many new apps, the
app market is still in its early stages and there remains room for innovation
and breakthrough, new applications.
So that’s the Opportunity. Good luck with the first assessment. In Tutorial 2
you’ll learn how to properly research and consider your idea, as well as
further commercial drivers that you need to consider in choosing which
platform to build your app on.
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