ARIJIT SAMADDAR140102029,PGDM 2014-16,IMT GHAZIABAD

Sectoral Analysis : Mobile Apps Industry

Worldwide Smartphone penetration

Source: http://www.lenovo.com/transactions/pdf/CCS-Insight-Smartphone-Market-Analysis-Full-Report-07-2014.pdf

World Population vs. Mobile Devices (by 2016)

Source: http://businessdegrees.uab.edu/wp-content/uploads/2014/08/The-Future-Mobile-Application-Edit1.jpg

Mobile Applications User Base Growth Rate

Source: http://www.portioresearch.com/media/3895/MAF%202013%202017%20-%20SAMPLE%20PAGES.pdf

Evolution Of Mobile App industry

Early 2000: Mobile content market dominated by Mobile Portal Model

2008: Apple Inc. launched the App Store, a new distribution paradigm in Mobile Commerce

2008: RIM, Samsung along with new entrants like Google followed

2011: One millionth app was made available to users in December

Dominance of Mobile Apps Over Other Mediums

Source:

Daypart Comparisons: people of age 15+ using medium (US)

Mobile Applications Categories

Games Applicati

onsSocial

Networking Applications

Entertainment

BooksBusiness

And Finance

Lifestyle

Productivity

Travel

Navigation

Utilities

Break-out of Android Apps (Jan 2013)

Source: http://www.portioresearch.com/media/3895/MAF%202013%202017%20-%20SAMPLE%20PAGES.pdf

App preferences

Top 5 Apps as

per time spent

1.Search,Portals & social

2.Entertainment

3.Communication

4.Productivity & Tools

5.Commerce& Shopping

Source: http://businessdegrees.uab.edu/wp-content/uploads/2014/08/The-Future-Mobile- Application-Edit1.jpg

App Store Variants

•Integrate directly with the mobile device's operating system•Interact with hardware of phone•Takes advantage of local APIs

Native (On-deck)

• Run directly from an online interface such as a website

• cannot manipulate a device's hardware• Limited to the web application's APIs rather

than the programming packages found on the phone

Third-party (Off-

deck)

•Combine the interface and coding components of a web-based interface•Functionality derived from native applications

Hybrid

App stores: Different players

Market Dynamics: Drivers

Increase In Mobile Data Subscribers

Potential For Mobile Advertising

Growing Number Of Smartphones And Improved Device Capabilities

Boom In Gaming Industry

Lower Data Usage Cost

Restructuring Of Revenue-sharing Pattern

Advancement In Network Technologies

Market Dynamics: Restraints & Opportunities

Lack Of Engaging Mobile Applications

Reluctance Of Enterprises To Develop Own Mobile Applications

Lack Of Specialized Business Applications

Emergence Of Alliances And Open Collaborative Stores

Fragmentation In Mobile Operating Systems

Market Participants

Handset/Os Manufacturers

App Developers

Telecom Operators

To sustain competitive advantage by continuous innovation developers are crucial

Developers expect full and efficient documentation on using a particular operating system, and an active community to enhance further development

APIs, important part of development ecosystem greatly enhance programming efficiency, reduce the chance of bugs

App Developers: Complementors To The Industry

Source: http://businessdegrees.uab.edu/wp-content/uploads/2014/08/The-Future-Mobile- Application-Edit1.jpg

Telecom Operators

Business Models

Providers can add value by granting app developers access to their APIs

Making investments in the network capabilities that have the most potential to create value

Imperatives And Impediments

Attracting And Retaining High-value Customers

Tough Competition In High-opportunity Market

Dominance Of Device Vendor-owned Application Stores

Fragmentation Of Developer Community

Decreasing Asp Of Applications

Handset/OS Manufacturers

Fragmentation of OS:iOS 7 is installed on 78% of all Apple devices while Android has a far more fragmented ecosystem. Jelly Bean 4.1.x, 4.2.x and 4.3 accounts for 62% collectively, while not being the latest version. KitKat (version 4.4) is only installed on 2.5% of Android devices. Lollipop counts very less.In this scenario it has become truly important to provide compatibility as per OS .Preinstalled Apps:Preinstalled Apps have become point of attraction for many smartphone buyers. So Handset/OS manufacturers have to bundle Apps properly. So partnership with App developers or OS developers have become very crucial.Compatibility: Apps are diversifying in terms of offering. Hence phone manufacturers need to identify whether hardware provide enough room so that huge number of apps can run simultaneously without affecting its functionality.Post-sale Service:Post-sale service has become very important to provide timely app/ OS update to the user.

Strategic implications:• No room of operation in silo•Collaboration is the key•Continuous innovation•Building solid partnership with other stakeholders in Industry

Apple:

• June 2014: Apple says there have been 75 billion downloads of 1.2 million apps, and reveals the App Store gets 300 million visits per week

• January 2015: Developers have now earned $25bn from apps in the App Store - $10bn in 2014, with $500m spent on apps in January alone. Apple says there are now 1.4 million apps (725,000 native iPad apps) in the App Store.

Success Mantra : • By keeping a tight rein on both the smartphone hardware

and the operating system, and vetting the apps before they are allowed into the store, Apple could create a roster of high-quality, well integrated apps.

• For developers, access to the iPhone's premium audience is extremely attractive, especially as Apple isn't much interested in making much money off the apps, unlike mobile operators who had been the gatekeepers, deciding how apps were distributed and sold at that point.

• Apple makes margin mostly by selling hardware, but apps are really what creates the loyalty to the ecosystem, be it from a consumer standpoint or for developers.

The Marketplace

Source: http://www.zdnet.com/article/ios-versus-android-apple-app-store-versus-google-play-here-comes-the-next-battle-in-the-app-wars/

Android rivalry

• According to app analytics company App Annie, in the third quarter of last year Apple's App Store's revenue was around 60 percent higher than Google Play's.

• But Google Play's worldwide downloads were 60 percent higher than iOS App Store downloads - and much of that growth is coming in emerging markets .

• Apple leads on revenue because it still holds onto the premium market: richer consumers who can afford iPhones and are willing to pay out for apps or in-app purchases. Android has a vast consumer base but one that stretches from cheap smartphones up to high-end devices.

• That's not all - according to data from AppFigures, Google Play has now overtaken Apple's App Store in terms of the number of apps it hosts, and also the number of developers working on the platform.

• None of this of course takes into account the quality of the apps inside those app stores: Android is often criticized for the poorer quality of its apps. But it shows that Apple no longer commands the app world.

The Marketplace

App Monetization

•Making money by selling data-driven advertising space in app. One can do this independently or work with a mobile ad partner.

Free, But With Ads (In-App Advertising)

•Teasing users with a stripped down version of your app until they are hooked enough to happily buy additional features.

Freemium (Gated Features)

•“pay then play” strategy that is propped up by your mobile marketing team’s ability to convince users to buy your app instead of free substitutes.

Paid Apps (Cost Money to Download)

•Turning app into another sales channel (for physical products that are used in the real world) or a mobile storefront (for virtual goods which can only be used inside the app).

In-App Purchases (Selling Physical/Virtual

Goods)

•“pay later” or “free trial” model because users get to test drive the app, but then need to sign up for a subscription to bypass certain content limits and restrictions.

Paywalls (Subscriptions)

•Advertisers gain inclusion in app by funding rewards for your users, who earn these rewards by engaging more with your app.

Sponsorship (Incentivized Advertising)

Revenue Streams

Latin America

Source: http://www.portioresearch.com/media/3895/MAF%202013%202017%20-%20SAMPLE%20PAGES.pdf

Trends

Trends (Contd..)

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