Vision mobile developer_economics_q3_2013_v1

© VisionMobile 2013 | www.DeveloperEconomics.com/go

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Contents

Key Messages

Chapter 1: State of the device nation, Q3 2013: The inflexion point

Chapter 2: Ecosystem economics: competing against the odds

Chapter 3: State of mobile developer Mindshare: Q3 2013

Chapter 4: Choices, choices, choices: Which platform is right?

Chapter 5: The multi-platform developer: It’s all about priorities

Chapter 6: How developers mix and match mobile platforms

Chapter 7: Developer attention in tablets catching up with smartphones

Chapter 8: Developer revenue models: a box of chocolates

Chapter 9: Developer tools: crossing the frontier of platform innovation

Chapter 10: The kaleidoscope of HTML5 app development

Chapter 11: Understanding the complex mosaic of developer personas

Chapter 12: Sizing the app economy

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Copyright © VisionMobile 2013

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Key Messages

Our latest research of 6,000+ developers – the largest and most global mobile developer survey to date – shows an unprecedented level of detail in developer attitudes, platforms preferences, revenues, revenue models used and tools of the trade.

The Mobile Developer Mindshare Q3 2013 shows Android leading at 71% of developers using the platform, followed by iOS at 56%.

HTML5 has entrenched itself as a mobile development technology of choice, with 52% of the developer population using HTML5 technologies for developing mobile apps.

Once we double click on that 52% of HTML5 mobile mindshare, a kaleidoscope of colour and options appears. The largest share (38%) of HTML5 developers develop mobile websites with another 23% developing mobile apps, i.e. incorporating offline functionality and deeper browser integration. Hybrid apps, such as those produced by PhoneGap, account for 27% of HTML5 mobile developers. A minority of 7% of HTML5 mobile developers use platforms exposing native APIs via JavaScript, such as Firefox OS and BlackBerry 10. Last but not least, 5% of HTML5 mobile developers use a Javascript-to-native converter tool like Appcelerator.

BlackBerry has been successful in transitioning BB legacy developers over to its new BB10 platform, with the new platform having almost the same mindshare as the legacy BlackBerry 5/6/7 had, just before the release of BB10 six months ago.

The strong interest in Windows Phone observed in past surveys is still there (35% of developers planning to adopt WP), but has subsided by 12 percentage points since Q1 2013. Mobile developers now have a wide gamut of options with challenger platforms competing for their attention. Windows 8 is at 40% of Mobile Developer Intentshare, followed by BlackBerry 10 (28%) and Firefox OS (capturing 27% of all developers planning to adopt a platform).

There is no one-size fits across mobile platforms. Our research shows that iOS is selected more frequently than average by developers that value revenue potential (+12%), graphics (+7%), app discovery (+8%) and user reach (+10%). Developers tend to use HTML5 more frequently as their primary platform when they value porting (+9%) and speed & cost of development (+4%). BlackBerry 10 is used more frequently than average as a primary platform by developers valuing developer community programmes (+16%). And Windows Phone is most popular for developers


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looking for the right development environment (+3%) and documentation (+2%).

Whether hobbyists or IT managers of Fortune-500 companies, developers use 2.9 mobile platforms concurrently, according to our recent survey of 6,000+ mobile developers. This is the first time we are observing a shift towards diversification, since our earlier 2011-2012 research pointed towards continual platform consolidation: on average mobile developers used 3.2 mobile platforms in our 2011 survey, compared to 2.7 in 2012 and 2.6 in our Q1 2013 research.

At 2.9 concurrent platforms on average, today’s developer is multi-platform. In this world, not all platforms are equally important to a developer. Prioritisation has an impact on which platform new apps and features first rolled out on, as well as the focus, app quality, sales and revenue on that platform. Our data shows that 84% of mobile developers are using iOS, Android or HTML5 (mobile) as their primary platform.

Our research indicated developers prefer iOS (59%) over Android (49%) as their primary platform. Whereas Android has 4x times more devices shipping and a significant lead in Mobile Developer Mindshare, it lags behind iOS in terms of Android developers using it as their lead platform.

Platform priorities also depend on the level of experience. Developers who are fresh to mobile have a much stronger preference towards Android, with almost twice as many new mobile developers preferring Android (40%) than iOS (21%).

At $5,200 per developer per month on average, iOS continues to be the most revenue-generating platform for developers, ahead of Android developer monthly revenues by a margin of 10%.

Our research of 6,000+ mobile developers shows that there is no single revenue model that is dominant across all platforms. On Windows Phone, developers have a strong preference towards in-app advertising (43%) and pay-per download (40%). BlackBerry 10 developers have a strong preference towards pay-per download (47%). The picture is much more balanced on Android, iOS and HTML5, with no revenue model dominating to the extent observed on Windows Phone or BlackBerry 10.

Contrary to popular perception, money is not the only motivator for mobile app developers - in fact, far from it. Revenues, in some form or other, are the goal for just 50% of mobile developers.

The hierarchy of developer motivations shows some surprising findings. At the base of the pyramid, the majority (53%) of mobile developers are motivated by creativity or the sense of achievement, making this the most


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popular motivator. The fun of making an app, is a motivator for 40% of mobile developers.

Our research shows that developer tools are in the must-have app development arsenal of the most sophisticated developers, and also those making the most revenues. Across the tools spectrum, iOS developers are the most active and sophisticated, with 92.5% reporting that they use at least one tool. Therefore, iOS developers have an advantage due to the higher percentage of tool users, which means they have the infrastructure to innovate and differentiate.


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About Developer Economics

Welcome to State of the Developer Nation, the 5th edition of Developer Economics - the de-facto research series by VisionMobile on mobile development and the trends of the app economy. This report tracks the state of mobile ecosystems, developer mindshare, monetisation trends, revenue models and developer tools, based on the largest, most global developer survey (over 6,000 respondents from 115 countries)

In this report, we take a close look at some of the latest trends in the mobile ecosystem, including developer Mindshare and platform prioritisation, platform adoption criteria, revenue models and revenues, as well as multi-screen development. State of the Developer Nation examines some of the top mobile platforms, pitting the three leading horses in the race (Android, iOS and HTML5) vs. the newcomers (BlackBerry 10, Windows 8 and Windows Phone) and the up-and-coming platforms (Firefox OS, Tizen, Jolla, Ubuntu).

The findings and insights of this report are based on an online survey of over 6,000 developers, as well as 21 phone interviews, conducted between April and May 2013. The survey had an unprecedented global reach, with respondents from over 115 countries worldwide. Our sample was balanced between Asia, Europe and North America, but we also had a large number of developers from Africa, Oceania and South America. In order to reach a global audience and regional developer communities, the survey was available in eleven languages (Arabic, Chinese, English, French, German, Japanese, Korean, Portuguese, Russian, Spanish and Swedish).

We hope you'll enjoy our report - we've certainly enjoyed writing it! If you have any questions or feedback, you can get in touch at [email protected]. The contents of the report will also become available in web format over the summer of 2013 at www.DeveloperEconomics.com/go

AndreasP, Matos, Christina, AndreasC, Dimitris, Vanessa, Chris, Michael, Nick, Stijn and Mark at VisionMobile.

@visionmobile www.visionmobile.com/blog


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Thank you!

We'd like to thank everyone who helped us in this project and helped us create the best Developer Economics report to date!

Our sponsors, without whom we wouldn't have been able to complete this project: BlackBerry, Mozilla, Intel, Telefonica and MoSync.

Our Regional and Marketing partners, who helped us reach an unprecedented 6,000 developers across the globe, breaking new records for the largest, global mobile developer survey.

The developers and mobile insiders that took the time and interest to share their experiences with us.


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Research Methodology

Developer Economics 5th edition is based on a large-scale online developer survey and 21 one-to-one interviews with mobile app developers.

The online survey was designed, produced and carried out by VisionMobile over a period of five weeks between April and early May 2013. One to one interviews were conducted from May to June 2013.

The online survey received over 6,000 responses, making this the largest mobile developer survey to date. Respondents to the online survey came from over 115 countries. The online survey was translated to 10 languages (Arabic, Chinese, French, German, Japanese, Korean, Portuguese, Russian, Spanish, Swedish) and promoted by 46 marketing and regional partners within the app development industry. As a result, the survey reached an unprecedented number of respondents, globally balanced across Europe (40%), Asia (24%) and North America (28%). The survey also attracted a significant developer sample from Africa (3%) and South America (5.5%).

Respondents came primarily from the US (18.7%), India (13.9%) and the UK (5.6%) followed by Russia, Germany and France and stretching all the way to Venezuela, Uruguay, Vietnam and Kazakhstan to name a few of the 115+ developer countries who participated, making this research truly reflective of the new, global, mobile app economy.


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The survey gathered responses from developers using as their main platform Android, Bada, BlackBerry 5/6/7, BlackBerry 10, Chrome, Facebook, Firefox OS, Flash / Adobe AIR, iOS, Java ME, HTML (targeting desktop), HTML (targeting mobile), OSX (desktop), Qt, Symbian, Windows (desktop), Windows Phone, Windows 8 and Tizen. We excluded respondents not using a mobile platform as their primary development platform.

To minimise the sampling bias for platform distribution, we compared the distribution across a number of different developer outreach channels and identified statistically significant channels that exhibited the lowest variability from the platform medians across our whole sample base. We derived a representative platform distribution based on these channels and weighted our results based on this distribution, as depicted in the graph below.


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CHAPTER ONE

State of the device nation, Q3 2013: The inflexion point

2013 presents an inflexion point in the evolution of app ecosystems. Apple’s iOS and Google’s represent an unprecedented 92% of all smartphone shipments in Q1 2013, fueling claims that the platform landgrab has ended. At the same time, a new breed of mobile platforms, BlackBerry 10, Firefox OS and Tizen are appearing on handsets in 2013, hoping to compete with the Apple/Google duopoly where Microsoft’s Windows Phone has failed to compete.

Android: the falling price floor

The production of feature phones (i.e. phones without an app ecosystem) has long turned into a commodity business of low-margin, sub-$50 phones for mostly developing markets, whose pricing boundary is defined by the lowest-priced Android handset. As the price floor of Android handsets continues to drop, shipments of feature phones are in a steady and predictable decline for the past two years, and have been for the first time surpassed by smartphone shipments.

Of the top handset manufacturers, only Nokia is still shipping feature phones in their majority, with all other handset makers - led by Samsung - having refocused on smartphones. Interestingly, Nokia is one of the few handset makers who can squeeze profits out of low-end feature phones. Nokia’s 105 feature phone retails for $20, with a 29% gross margin according to IHS.

It might still take years for the installed base of billions of feature phones out there to be replaced in their majority by smartphones, but the shift in the sales base has already started. Manufacturers such as Nokia who rely primarily on feature phone sales, having failed to successfully transition from own Symbian to Microsoft-powered smartphones, will continue to lose market share and revenues.

The market continues to be flooded by Android devices, from low-end, $50 retail, feature-phone replacements with no data plans, to high-end, $700 devices on flat data tariffs. In Q1 2013, Android claimed 75% of all smartphone shipments, while iOS claimed another 18% leaving very little room for anyone else. 2.5 years since launching its latest Windows Phone platform, Microsoft is still struggling to make inroads in smartphones, capturing a measly 3% of smartphone sales. Microsoft’s latest attempt at gaining a mobile market share is Windows 8, the


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latest hybrid tablet/notebook version of Windows, with sales slightly up on a quarterly basis but no sign of being an imminent threat to either Android or iOS.

A new wave of platform challengers hits the device floor

Developer momentum is building up on the HTML5 front, despite the negative sentiments created from Facebook’s transition to native apps. Developer Mindshare puts HTML5 almost on par with iOS and Android as we shall see. A new set of platform challengers - Firefox OS, BlackBerry 10, Tizen, Jolla and Ubuntu - aim to capitalise on the millions of existing web developers that have yet to step into mobile, and of course the formidable mindshare of HTML5 among mobile developers.

Among new entrant platforms, BlackBerry 10 is gradually making a transition into the company’s shipment mix, shipping 40% of BB10-powered devices out of 6.8 million smartphones in Q1 2013. Firefox OS has recently announced the first two devices hitting the market - the Alcatel OneTouch Fire and ZTE Open - the latter just launched in Spain from


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Telefonica for €69 ($90) contract-free including €30 ($39) of airtime for prepaid customers. Tizen handsets are not expected in the market before Q4 2013, with Ubuntu devices planned for 2014

Among handset makers, Samsung remains in lead position in smartphone sales, followed by Apple. LG finds itself in third position, partly due to positive sales of the Google-branded Nexus 4 in the first quarter of the year. BlackBerry and Nokia continue to lose market share and continue to resist jumping on the Android platform bandwagon.

The handset maker consolidation at the top end, led by Samsung, is also combined with a fragmentation of smartphone makers at the long tail of the distribution. The “other” segment of smartphone manufacturers is now selling as many devices as Samsung. These handset makers are made up of 100s of Android handset producers, leveraging off-the-shelf hardware platforms from Qualcomm and Mediatek and delivering customised Android handsets to Asia and Africa, with as small as a 10-people production team and own distribution networks. In this sense, Samsung’s biggest competitor in terms of market share isn’t Apple, but the 100s of handset makers who are able to supply the cheapest possible smartphones, customised for every corner of the developing world.


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The elusive ticket to smartphone profits

While Android is a ticket to the smartphone market for handset makers, it’s not a ticket to smartphone profits. In Q1 2013 HTC’s profits were down by over 90% and was overtaken by Chinese vendors Huawei and ZTE mainly due to their exceptional performance in the Chinese market.

Competition among OEMs in the Android camp is intense: all major Android vendors are pushing “hero devices”, i.e. cutting-edge smartphones, in the hope that they will be able to capitalise on features, brand recognition and retail relationships to increase their market share.

However, profits are elusive for all modular handset makers (i.e. everyone other than Apple and BlackBerry) with one exception: Samsung. In a modular market, differentiation for handset makers is scarce. As such, profitability has has little to do with the platform - be it Android, Windows Phone or Firefox OS - and everything to do with the current industry structure.

The reason Samsung is solely making profits among modular handset makers is because they have realised that there are no profits to be made in handset production itself. In other words, hardware is dead. Instead, value has migrated to upwards in the technology stack (to services) and downwards (to handset components).

Samsung owns the design and production of memory, processors and screens, which make up the most visible components (in terms of features) and most expensive (in terms of hardware cost). This gives the handset maker two unique benefits.

- Time to market: Samsung can secure availability of these components first in the market, and ahead of all competing handset makers, including Apple, which it supplies. Time to market is crucial to handset makers, as every month of handset delays is equivalent to an estimated 15 million dollars of lost handset profits, since the development cost is already sunk.

- Lower price points: Samsung can secure those components at the lowest price point possible, thereby making room for profits. It is the ownership and integration of hardware components that makes Samsung profitable amongst all module handset makers.

Samsung can then reinvest those profit gains in advertising (where Samsung spends more than Coca Cola), R&D (e.g. Tizen), distribution partnerships and acquisitions that strengthen the competitive advantage it already has, creating a virtuous cycle. For an analysis of Apple’s and


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Samsung’s profit recipe see VisionMobile’s 2012 Mobile Insider research note at www.visionmobile.com/insider

It’s not just smartphones eating into feature phones. It’s also tablets which are eating into PCs (notebook & desktop) shipments. In Q1 2013, PC shipments experienced a sharp slump ending a two year period of a stalled, but relatively stable PC market. This has allowed tablets to claim an even larger share of the combined PC-tablet market, now accounting for over 39% of total devices sold. The rise of tablets has been assisted by the significant sales of Android tablets, including the Google Nexus. Android now claims a higher market share of tablet sales than iOS, although many of the Android devices are low-spec offshoots.

While tablets are not direct PC replacements, they are to some extent substitute products for desktop and notebook PCs. Given the lacklustre sales of Windows tablets, the erosion of the PC market share in the combined mobile computing category (tablets, notebooks) has an adverse effect on Microsoft. As a result, the company sees its 20-year dominance in the computing world being threatened as it fails to build up scale in mobile computing.


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CHAPTER TWO

Ecosystem economics: competing against the odds

2013 presents an inflexion point as a new set of challengers to the iOS/Android duopoly appears. Two years after Microsoft and Nokia debuted their new mobile strategy with Windows Phone, a new set of entrants have surfaced, namely BlackBerry 10, Firefox OS, Tizen, Ubuntu and Jolla. The challengers have chosen to compete head-to-head with Apple and Google, rather than disrupt them.

Ecosystem economics clearly act in favour of the dominant players, and with Android and iOS literally dominating consumer and developer mindshare, challengers that aim to change the status quo are competing against the odds. Understanding ecosystem economics means understanding whether and how the new entrants can challenge the duopoly.

Android and iOS have grown on the back of strong network effects, whereby they grow stronger with each user and developer added to the ecosystem. Users drive demand for apps and hence developers. Developers and apps drive user adoption.

Network effects take place not just between users and developers, but also between all four sides of app ecosystems, including handset manufacturers, and network operators. The next chart shows the network effects at play within the iOS ecosystem, and the value added and captured, by each side.


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The Android-iOS duopoly is still holding strong with no sign that it can be challenged in the foreseeable future. Once network effects have kicked in and scale has been achieved, it is almost impossible for contenders to compete directly and displace the leaders. Beyond network effects, the incumbents have established developer habits, user stored value into the apps themselves, external subsidies in the form of developer time & effort, and abundant telco support.

Any challenger to the Android-iOS duopoly therefore faces an uphill struggle and, as mentioned earlier competes against the odds. Markets dominated by network effects are what we call “Black Oceans”. Whereas Blue Oceans exhibit no competition, Red Oceans are shark-infested, Black Oceans make it near-impossible to compete. Even Microsoft with an estimated over 5 billion dollars invested in Windows Phone has managed to secure a tiny 3% smartphones sales share in 2.5 years since the platform launched.

The iOS ecosystem drives the core business of Apple: device sales

Source: VisionMobile | http://visionmobile.com/M2M | June 2013 Licensed under Creative Commons Attribution 3.0 License


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Asymmetric competition

Instead of competing directly with the Apple/Google duopoly, a far more effective strategy is to follow the recipe that brought down the pre-iPhone industry and installed iOS and Android at the top of the app economy: not direct, but asymmetric competition. It will take a fundamental change in the basis of competition to uproot either of these platforms from their positions.

This strategy requires contenders to compete not directly, but challenge the control points of modern ecosystems: app development, distribution and consumption of apps. This is exactly the strategy followed by Amazon and Facebook, and inadvertently by some HTML5 proponents.

Facebook for example competes with iOS/Android by diluting the ecosystem control points rather than head-on. Facebook offers App Center, an alternative to the native app marketplaces for distributing apps, and Facebook Home, an alternative to app stores for consuming apps. In turn, Amazon offers it’s own App Store for distributing and consuming Android apps on Kindle devices, which is bundled on certain handsets or carriers, including Verizon Droid devices.

Three platform control points to stimulate network effects

Source: VisionMobile | http://visionmobile.com/M2M | June 2013 Licensed under Creative Commons Attribution 3.0 License


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Challenging the odds

Mozilla, along with several carrier partners, have launched Firefox OS, a browser-based mobile platform. Mozilla is taking HTML5 from a set of specs and APIs into a fully-fledged ecosystem, including an app store, monetisation and handset maker deals with Alcatel and ZTE.

Our Developer Economics Q3 2013 data indicates that HTML5 has almost equal mindshare to Android and iOS among mobile developers and is leveraged heavily by enterprise IT staff mobilising corporate assets. Mozilla is also using its browser installed base to increase brand awareness of Firefox OS towards desktop users. The browser company is also a thought leader amongst the millions of web developers out there. Despite these assets, we argue that Mozilla should spread its bets, not just by competing head-on, but also on diluting the iOS and Android control points - for example by helping web developers create good-as-native, browser-less apps on any platform, and integrating native app search within its desktop browser search.

Microsoft has played the synergy card, aiming to bridge and cross-sell Windows Phone and Windows 8 products to both developers and users. Nevertheless it is currently struggling on both fronts: Windows Phone is not even close to the point of being considered a challenger for iOS or Android, but, perhaps more worryingly for Microsoft, Windows 8 has been having a difficult time spurring the update cycle on the desktop/notebook front. Right now, Microsoft’s mobile strategy appears dispersed across smartphones, tablets and notebooks that look like tablets.

Microsoft needs to solve a fundamental challenge: that its software licensing business model is outdated in the post-Android age, in that handset manufacturers are unwilling to pay software royalties for licensing the operating system. Right now, Microsoft’s mobile division appears to be more successful as a patent licensing business, than a software licensing business.

BlackBerry 10 has finally appeared on the market and judging by our data on developers’ reactions the company has managed to shift mobile developer mindshare from the legacy platform to BB10. BlackBerry have reduced barriers to entry for developers by providing a straightforward porting facility for Android apps to BlackBerry 10. Webworks also provides a hybrid native/HTML5 path for web developers allowing access to hardware APIs and UI elements on BlackBerry 10.

While developer barriers to entry are quite low, consumers have not yet adopted the new platform as BB10 handset sales in Q1 2013 reached 2.7 million handsets, well below the expected 3.3 million. BlackBerry Messaging is giving way to WhatsApp as BB users’ favourite messaging


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platform. The entire BYOD (bring-your-own-device) megatrend is essentially about migrating enterprise users away from CIO-sanctioned BlackBerry devices. BlackBerry has performed extremely well in terms of developer mindshare, but its user mindshare is underperforming, and both are needed to sustain the ecosystem’s network effects.

Samsung’s bada platform was designed as a negotiating card against Google - as an alternative Samsung could use to offset the power of Google on its handset features and software. With Samsung becoming the Android kingmaker, the tables are now reversed and a negotiating card is no longer needed. Instead, Samsung’s new platform Tizen is an effort not just to break its reliance on Android, but more importantly to copy the Apple recipe, in the form of a fully-controlled platform. Samsung’s challenge is to modernise a legacy Tizen OS (based on the older SLP platform, with fragments of Maemo and LiMo software) and to convince developers to back yet another app ecosystem. It also needs to revamp the language the company speaks with developers,, from the legacy mobile industry language still reminiscent of the Android launch era of 2008 (“Tizen is an open source, standards-based software platform supported by leading mobile operators, device manufacturers, and silicon suppliers”)


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CHAPTER THREE

State of mobile developer: Mindshare, Q3 2013

Has the platform landgrab ended? Well, Android and iOS maintain their Mobile Developer Mindshare since our last survey published in Q1 2013. Our latest research of 6,000+ mobile developers shows Android leading at 71% of developers using the platform, followed by iOS at 56%. HTML5 has entrenched itself as a mobile development technology of choice, with 52% of the developer population using HTML5 technologies for developing mobile apps. The Mindshare chart shows the % of developers using each platform out of the total mobile developer population.

We still stop short of calling this a triopoly though, for two good reasons. Firstly, HTML5 is a technology stack, not a full ecosystem like Firefox OS. Secondly, most HTML5 mobile developers are targeting the browser, with a minority targeting iOS/Android app stores through PhoneGap, so in any case end up “hitting” the same iOS and Android devices which form the vast majority of smartphones sold.

__________ Comments?


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Meanwhile Windows Phone has - for the third time running - failed to capitalise on the huge interest that developers have shown in the platform, remaining in fourth place, significantly behind the incumbents. Despite extensive marketing efforts, slightly increased sales of Windows Phone devices and generous developer programs, Microsoft is still struggling to convince developers that its platform can compete head-to-head with Android or iOS, since the platform lacks in user reach, which is the most motivator for developers to invest in a platform. To adopt a new platform, developers need to consider not just the learning curve of Windows Phone, but also the opportunity cost of scaling down on iOS or Android. Where these costs are softened is the case of Windows 8, which can attract traditional developers who haven’t yet made the transition to mobile and are already familiar with the Windows toolset. Still, user reach remains a fundamental platform adoption reason, and in 2013, the tables are clearly skewed towards Android and iOS.

BlackBerry has managed to retain Mobile Developer Mindshare, with the new BlackBerry 10 platform having almost the same mindshare as the legacy BlackBerry 5/6/7 had just before the release of BB10 six months ago. While it lags behind WP in terms of Mobile Developer Mindshare, BB10 does pose a viable threat to Windows Phone as it has managed to amass a sizable following in just a few months following its initial launch. This makes BB10 one of the most successful operations of transitioning developers across platforms.

Beyond BlackBerry 10, the decline of older generation platforms such as JavaME, Flash/AIR and Symbian continues, as the platforms are being phased out, with the device sales base declining with the Developer Mindshare. These platforms have now become case studies of the demise of once thriving ecosystems of the pre- app store era.

Samsung’s bada experiment is coming to an end, having failed to gather Developer Mindshare despite a promising user reach, that saw higher sales than Windows Phone in 2011 and most of 2012. In retrospect, bada’s performance is exactly the opposite that of BB10: where BB10 thrives in developer mindshare, it suffers in device shipments (the equivalent of user mindshare).

The case of bada is also an interesting example of the network effects that dominate app ecosystems: user adoption does not suffice in the new app economy. The positive feedback loop must include developers who benefit from an increased user base. If developers are left out of the loop, the necessary network effects will not kick-in and the platform will fail to grow. Samsung’s and Intel’s attempt at a home-grown platform, Tizen has some early developer adopters but with no devices in the market it is too early to risk predictions.


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Developer Intentshare

The Q3 2013 Mobile Developer Intentshare data shows a few new kids that have appeared on the block.

The strong interest in Windows Phone observed in past surveys is still there (35% of developers planning to adopt WP) but has subsided considerably since November 2012 (47%) as new contenders BlackBerry 10 and Firefox OS are capturing developer attention, with over a quarter of developers expressing their interest in each of the latter platforms. Microsoft’s inability to convert Windows Phone interest into adoption is due to lack of commercial traction (the equivalent of user mindshare), with Windows Phone sales accounting for just 3% of smartphone sales in Q1 2013.

BlackBerry has been successful in transitioning BB legacy developers over to its new BB10 platform, and creating the third-highest Mobile Developer Intentshare after Windows 8 and Windows Phone at 28% of all developers planning to adopt a new platform. The real challenge for BlackBerry now is not to transition, but to recruit new developers, as Firefox OS and Windows 8 are gaining momentum and competing for Developer Mindshare. The ease of porting Android apps to BlackBerry will lower barriers for developers that want to experiment with BlackBerry, but the company’s biggest developer relations headache will be Microsoft’s sizable developer marketing budgets for Windows 8.


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Mozilla, has provided the missing web platform: until now web technology lacked the ingredients that would turn a technology solution into a platform: as a single API set and development environment, and a means to distribute, monetise and discover web apps. With HTML5 already being used by more than half of mobile developers, the prospects for Firefox OS are looking good and there is a very healthy level of interest in the platform. Our data shows that 27% of developers are planning to adopt Firefox OS, out of those that plan to adopt any platform. In terms of Mobile Developer Intentshare, this puts Firefox OS just ahead of iOS and Android.

In just a short space of time, Firefox OS has managed to amass a respectable Developer Intentshare, even before devices hit the market, and while competing for Windows Phone, Windows 8 and BlackBerry 10 all of which are much older platforms, with devices in market and billions of market dollars behind them. The insight here is that early adopters are driven by the promise of HTML5 openness and cross-platform capabilities.

Yet Mozilla, needs to deliver on its promise. Much like BlackBerry, Mozilla must deliver value to both developers and users to succeed where Microsoft has so far failed. Getting right one part of this equation (e.g. just developers) will clearly not suffice. And profitability for smartphone makers has little to do with using Firefox OS or Android.

Tizen exhibits some level of developer interest but without any devices in the market it is too early to say whether this will materialise beyond developer hype. Tizen’s HTML5 pedigree is aiming at attracting web developers and it’s “open-source, standards-based software platform” is aimed at softening the dependence on Samsung.

While several platforms currently appear as distant challengers to the Android-iOS duopoly, the economics of app ecosystems are such that any position below the top is unsustainable. The governing network effects favour the growth of the first comer platforms while inhibiting the growth of laggards.

Platform owners do not only face the challenge of recruiting developers, but also convincing users that iDevices and Androids are not their only option. This is much easier to achieve in developing markets where Apple is weaker (such as in Africa) or where, for example, BlackBerry is stronger (such as in South America). Indeed, there are significant differences in platform adoption across regional markets. This is due to different demographics or regional influence that vendors have achieved by focusing on specific markets.


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Clearly, the leaders (Android and iOS) as well as HTML5 dominate every regional market. At the same time, we see that there is significant variance in the level of regional Developer Mindshare: iOS commands a 62% Mindshare in North America but only 48% in Asia and 33% in Africa. And Windows Phone is stronger in Asia than in North America.

Regional Developer Mindshare is of course tied to regional device sales. Developers will adopt platforms depending on their strength in their market. While developers are not bound by regional markets, i.e. they can sell apps globally, the majority of developers will target local markets, as we saw in Developer Economics 2012.


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CHAPTER FOUR

Choices, choices, choices. Which platform is right?

The Apple/Google duopoly is the safe choice. It commands a phenomenal Mobile Developer Mindshare, with 86% of mobile app developers using either iOS or Android as evidenced by our recent survey of 6,000 developers - and a staggering 42% of developers using both platforms. These numbers are no less phenomenal than the combined market share of iOS and Android handset sales which reached 92% of all smartphones in Q1 2013.

But what about developers venturing beyond the duopoly waters? Choices like HTML5, Windows Phone, or the newer Windows 8, BlackBerry 10, Firefox OS, and the upcoming Tizen, Ubuntu and Jolla. Which platform is right? Or better: which platform is right for *me*?

Our latest research shows that developers’ platform choices depend very much on the goal they aim to achieve. When it comes to platform selection, contract developers will opt for platforms that will generate more revenue, CIOs will focus on efficiency and low cost, CMOs will focus on reach, while hobbyists will want to experiment with newer platforms. For an analysis of the hierarchy of developer motivations see our Developer Segmentation Q3 2013 report.

Rather than asking which is the best platform, we asked something more meaningful. That is: which platform is right for me? The next chart analyses the choices developers make most often (and least often), when they chose a platform for a specific reason. Pick what platform aspect is most important for you, and then see which platform other developers selected most often, according to our survey of 6,000+ mobile app developers.



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Our research shows that iOS is selected more frequently than average by developers that value revenue potential (+12%), graphics (+7%), app discovery (+8%) and user reach (+10%). However, it is selected much less frequently by developers that value nearly every other quality, and in particular open standards (-24%), community programs (-21%) but also portability (-9%) and choice of development environment (-8%).

Android is selected as a primary platform more frequently by developers that value open standards (+16%) but lags when it comes to app discovery (-4%).

Developers tend to use HTML5 more frequently as their primary platform when they value porting (+9%) and speed & cost of development (+4%) but less if they value rich APIs (-6%) or graphics capabilities (-6%). Finally, BlackBerry 10 is used more frequently than average as a primary platform by developers valuing developer community programmes (+16%). And Windows Phone is most popular for developers looking for the right development environment (+3%) and documentation (+2%).

For developers deciding which platform to invest in, the earlier chart offers some peer advice. Do I need deep access to device APIs for the type of apps I will develop? Am I looking to experiment? Do I need a marketing edge in less crowded platforms? Is reach more important than money? The same


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chart will help the platform vendors themselves understand how they score against the competition in each of these attributes and the areas they need to improve to remain competitive.

Overall, three platform selection criteria dominate: revenue potential, user reach and speed & cost of development. The next chart shows which are the most important selection criteria for developers Android, iOS, HTML5 mobile, Windows Phone or BlackBerry 10 are their main platform.

Speed and cost of development is a dominant selection reason for all developers except those that mainly develop for iOS, who value revenue potential above all (+12% above average). This sets iOS apart from the other four platforms that seem to offer little differentiation among them in this respect. Of course, revenue potential is not an all-or-nothing attribute. But having a clear advantage in one area makes platform selection a lot simpler.


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CHAPTER FIVE

The Multi-Platform Developer: It’s all about priorities

Despite the candid efforts of Apple and Google, today’s developers are not wedded to any single platform.

Whether hobbyists or IT managers of Fortune-500 companies, developers use 2.9 mobile platforms concurrently, according to our recent survey of 6,000+ mobile developers. This is the first time we are observing a shift towards diversification, with our earlier 2011-2012 research pointing towards platform consolidation: on average mobile developers used 3.2 mobile platforms in our 2011 survey, compared to 2.7 in 2012 and 2.6 in our Q1 2013 research.

The new entrants of Windows 8, BlackBerry OS are capturing not just developer hope and hype, but actual investment of developer time, money and effort. And there are good reasons. More platforms allow developers to increase reach, diversify revenue opportunities, spread their risk, and cater to new requests for commissioned app development work.

Platform discrimination

At 2.9 concurrent platforms on average, today’s developer is multi-platform. In this world, not all platforms are equally important to a developer. Platform discrimination is abundant.

Developers’ platform prioritisation will follow their selection criteria, whether it is revenue, reach, cost, speed, discovery or dev environment that they are after. Beyond the lead platform, our data shows that developers are making conscious decisions to down-prioritise platforms to second, third or even fourth place.

The lead platform, is where new apps and features are first rolled out and which is always the star of the marketing launch. Prioritisation will also have an impact on focus, app quality, sales and revenue. As such, the way developers prioritise the platforms has a direct impact on the overall perception of the platform. Consider that if most developers treat a platform as a second-class citizen, this will reflect negatively on the app quality and consequently, on developers’ revenue opportunity on that platform. Developers that prioritise a platform will act as evangelists for that platform, as they ‘re likely to create the highest-quality, most up-to-date apps and speak out for the platform at events or social media.


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Our data shows that 84% of mobile developers are using iOS, Android or HTML5 (mobile) as their primary platform, as the next chart shows. Android and iOS are the dominant primary platforms, preferred by 34.4% and 32.7% of mobile developers respectively, while HTML5 is the priority platform for 17.3% of mobile developers.

Naturally platform priorities are not one-size-fits-all. We see very clear trends emerging in developers prioritisation of iOS vs Android, based on audience targeted, developer experience, and app category.

The audience targeted (B2C vs B2B apps) has a significant impact on the primary platform selected. Looking at the consumer vs. enterprise app market, we observe that while iOS and Android are equally important to developers in the consumer segment, developers targeting enterprises have a stronger preference towards iOS. Moreover, HTML5 is the platform of choice for a quarter of all developers targeting enterprise customers.

Platform priorities also depend on the level of experience. Developers who are fresh to mobile have a much stronger preference towards Android, with almost twice as many new mobile developers preferring Android (40%) than iOS (21%). This is most likely related to the steeper learning curve and higher barriers to entry for iOS, such as ownership of a Mac development machine and the $99 developer fee. More experienced developers tend to adopt iOS as their main platform: 44% of developers with three to five years of experience will use iOS as their main platform vs. 31% that select Android.


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Platform priorities are also influenced by the category of apps developed: Games developers have a slight preference towards iOS as their primary platform (37% vs. 35% for Android), while developers of music & video apps have a preference towards Android over iOS (36% vs 29%).

"From a business standpoint, there's a lot of education needed for the acceptance of HTML 5. There's a gap between what we developers can provide and what the client thinks we can provide." Ciprian Borodescu, CEO, Webcrumbz

More importantly, platform priorities depend heavily on the developer motivations, according to VisionMobile’s Developer Segmentation Q3 2013 report. Guns for Hire and Hunters who are motivated by app revenues most often prefer iOS. BlackBerry 10 and Windows Phone are frequent favourites for Hobbyists and Explorers who are experimenting and care about learning and having fun. Finally, Android is a most popular choice for all other segments - Enterprise IT, Product Extenders, Digital Content


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Publishers and Gold Seekers - who are motivated by extending a non-mobile business with apps.

"Content is king… develop apps but deliver content." Jaime Enriquez, CEO, Inode

The real measure of developer loyalty

To understand the true picture of the multi-developer world, look not at how many SDKs are downloaded per day, monthly active uniques on developer websites, attendees at developer conferences, or how many billions spent in developer marketing. Instead, to understand the true picture of today’s multi-platform landscape, look at where developers are putting their effort, time and money.

In the words of Andy Grove, former Intel CEO:

“To understand a company’s strategy, look at what they actually do rather than what they say they will do.”

Developers’ strategy is set by the hundreds of everyday decisions about where developers spend their effort, time and money. To unveil how developers are really using the top-5 platforms we look at developer platform priorities.

The picture on the next chart shows a strong lead of iOS over Android with 49.4% vs 59% of platform developers preferring it as their main platform. Whereas Android has 4x times more devices shipping and a significant lead in Mobile Developer Mindshare, it lags behind iOS in terms of Android developers using it as their lead platform. This has fundamental implications in the feature, quality and marketing, and revenue delta that these developers will prioritise on iOS, and the resulting better experience for iOS users.

The picture of the duopoly becomes rock solid when one looks at lead platforms share. Within iOS/Android, the lead platform share is an average of 54%, dropping to down to almost half (27.5%) for the next three platforms, HTML5 mobile, Windows Phone and BlackBerry 10.

Lead platform share adds a lot of colour behind the dull “total number of apps” numbers that permeate the blogosphere. It


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explains why Android and mostly iOS app store stickers are the first to appear for new startups advertising their app on a website, a billboard or a taxi. It explains why feature updates appear first on these platforms, for most apps. It explains why so many Windows Phone apps lack the design edge and attention to detail. It explains why most HTML5 apps are an extension rather than a starting point for a brand’s experience.

Platform vendors should set see lead platform share figures as key performance indicators and benchmarks of their developer relations teams - there is no better testament to developer loyalty than to having set a platform as their lead priority.

Beyond the duopoly, lead platform share drops dramatically. 28% of BlackBerry users prioritise BlackBerry 10 as their main development platform vs. 22% for Windows Phone. Looking at developers who use BlackBerry as a first or second priority, it is evident that BB10 developers are far more loyal, on average, than Windows Phone developers. For BlackBerry 10 this is an advantage that can outweigh its Developer Mindshare deficit vs. Windows Phone since BB10 developers will focus their attention on the platform, producing higher quality apps there first.


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CHAPTER SIX

How developers mix and match mobile platforms

We used to same data from our survey of 6,000+ app developers to see the multi-platform world from a different angle. We know that 78% of developers use at least one secondary platform concurrently with their primary one. We then asked: which platform do iOS, Android, WP, BB10 and HTML5 (mobile) developers use as a second preference? The next chart shows a very telling picture of how developers mix and match mobile platforms.

We knew that Android would be the most popular second choice for iOS developers - which the data confirms as 69% of iOS developers use Android. The picture is different for Android developers, who use iOS as a second platform (40%), just ahead of HTML5 mobile (29%).

BlackBerry 10 developers show very low preference for iOS (7%), but much higher for HTML5 (30%) and Android (23%), which is sensible given that BB10 supports both HTML5 and Android apps, offering cross-platform synergies. We also observe a preference for Android developers towards


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BlackBerry 10 as a secondary platform by developers who mainly use Android as they can, in many cases, easily port their apps across to BlackBerry 10.

Windows Phone developers are in their vast majority (58%) using Windows 8 as their secondary platform with only Android as a distant second (18%).

As far as HTML5 mobile developers are concerned, they prefer Android (32%) or iOS (39%) as secondary platforms, since they can develop hybrid apps and sell them via native app stores, thus leveraging the monetisation and reach advantage that both these platforms provide against others.

The economics of apps make it extremely difficult for challenger platforms to compete against the duopoly, which has well established network effects working in its favour. Asking a developer to switch to a different platform is like asking someone to learn a foreign language - it’s a task that takes months if not years of disciplined effort to master. And it’s not just about the language (Objective C, Java, HTML or JavaScript) itself. It’s the set of APIs, development environment, publishing process, and the 3rd party tools ecosystem that supports the platform.

"Learning a language nowadays is not very hard, they all look the same (literally). Really what you have to learn is the API." Jean-Jacques Dubray, Founder, Convergence Modeling

The earlier chart shows how developers’ preference on mixing and matching platforms depends highly on the level of synergies that can be achieved - whether it is easy porting across platforms (e.g. Android to BB10 or Windows Phone to Windows 8), or leveraging the same codebase (e.g. HTML of JavaScript) to both hybrid (e.g. PhoneGap -based) and browser-based apps. This goes back to our earlier argument about asymmetric competition: the easiest way to compete with the duopolists is not head-to-head, but by challenging their control points. Diluting the app creation control point means exactly that: making it easy for developers to target a much wider device base with the same development tools and APIs.


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CHAPTER SEVEN

Developer attention in tablets catching up with smartphones

Tablets are now everywhere. In living rooms, cars, meeting rooms and airports. Tablet sales have grown dramatically from just three million units sold in Q2 2010 with the iPad launch, to over 49 millions tablets sold in Q1 2013, with Android now dominating tablet sales.

Tablets sales are approaching a quarter of smartphone sales in Q1 2013. Despite the sales gap, developers have embraced tablets almost as equal citizens to smartphones. Our recent survey of 6,000+ app developers shows that tablets are now being targeted by 70% of mobile developers, representing a significant mindshare increase from 61% six months ago. Tablets closely track smartphones with 93% of mobile developers targeting smartphones.

Among Android developers, the share of developers that develop for tablets has risen sharply to 71% from 64% in our January 2013 study, driven by the proliferation of tablets both from tier-1 and white label manufacturers. The most impressive rise is observed among developers using HTML5 mobile, 80% of whom now develop for tablets, up from 71% in January 2013.



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Feature phone development remains on the same level (18% of mobile developers) as that observed in January 2013, with 18% of mobile developers working on feature phone apps. The huge installed base - over three billion units - still represents a sizeable addressable market for developers in emerging markets dominated by low-end handsets. The data also reveals a fair amount of interest in developer investment into feature phone apps in order to reach markets where smartphones are slow to penetrate.

Development for TVs and set top boxes has slightly subsided since our Q1 2013 report from 6% to 4% of mobile developers, as a result of developer disillusionment from TV apps, an area which has yet to deliver consumer adoption in large numbers. Interestingly, TV apps remains one of top two “screens to watch” on the mobile developers’ radar, following tablet apps.


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CHAPTER EIGHT

Developer revenue models: a box of chocolates

Not all developers care about making money - some are experimenting, having fun, learning and others are extending a product’s brand reach. But those who do care about making money, have a bewildering array of revenue model choices to choose from.

An app’s revenue model will depend on many developer considerations. Which is the target market and how much will users spend on the app? How are other successful apps in the same category making money? Should I drop prices to attract traffic and monetise through in-app payments? Will my app generate enough traffic to justify an ad-based revenue model? Can I create premium content that I can monetise via subscriptions? Does my target audience have a credit card on file to pay for app store purchases? Are Android users less likely to pay for downloading an app than Apple users?

Our research of 6,000+ mobile developers shows that there is no single revenue model that is dominant across all platforms. as the next chart shows. Developers will often use different revenue models on each platform. For example Angry Birds and WhatsApp messenger are paid apps in the Apple app store while they are free on Google Play.

On Windows Phone, developers have a strong preference towards in-app advertising (43%) and pay-per download (40%) and relatively low usage of in-app purchases or freemium. BlackBerry 10 developers have a strong preference towards pay-per download (47%). The picture is much more balanced on Android, iOS and HTML5, with no revenue model dominating to the extent observed on Windows Phone or BlackBerry 10.

Contract work is more popular among iOS and HTML5 developers (29% of iOS and HTML5 developers) than on other platforms, reflecting the popularity of these platforms among clients outsourcing app development. Overall, among developers that develop commissioned apps, 40% use iOS as their primary platform, while 30% use Android and 20% use HTML5. As the next chart shows, for developers looking for contract work globally, iOS, Android and HTML are the platforms they should be focusing on, in that order.


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At $5,200 per developer per month on average, iOS continues to be the most revenue-generating platform for developers, and


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ahead of Android developer monthly revenues by a margin of 10%. The next chart reveals monthly developer revenue, by primary platform, including revenues beyond app store revenues such as contract development, advertising, e-commerce sales and licensing fees. The gap between iOS and Android, when considering app-store only revenues is likely to be larger.

HTML5 mobile developer revenues are mainly associated with contract-based development and advertising due to the absence of an established app-store. At the same time, as we shall see, just over one of four HTML5 mobile developers will package their apps as hybrid apps (based on PhoneGap / Cordova) which are open to app store revenues. HTML5 mobile developers also show a large disparity between have’s and have-nots. This is because HTML5 as a platform used both by companies extending a brand onto mobile and by Fortune-500 IT managers, looking to mobilise existing web assets, on very sizable development budgets.

Finally, BlackBerry 10, being a new platform, is unsurprisingly lagging behind other platforms in terms of developer revenues, as the platform is first being picked up by Hobbyists and Explorer developer segments, who are looking to learn and improve rather than to build a business. For an analysis of developer motivations and monetisation by segment, see our Developer Segmentation Q3 2013 report.


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CHAPTER NINE

Developer tools: crossing the frontier of platform innovation

Today’s app economy has created jobs and hobbies for over 500,000 app developers globally, using a multitude of platforms. In the early years (2008-2010) of the app economy, all of the tools needed by developers to develop and distribute apps were provided by the platforms themselves. After all, in those early days, all you needed was a development environment, a set of APIs to code against, a marketplace to distribute your apps through, and a way for tracking app sales. In recent years however, the number of apps has multiplied to nearly 1 million apps for each of iOS and Android, and a development environment and app store just won’t cut it. The bar for app quality has increased, and the app discovery bottleneck has been continually shrinking.

To support those 500,000+ mobile developers to innovate and stand out in the market, a new “SDK economy” has emerged. A storm of over 500 SDK startups and Enterprise IT incumbents, have emerged, starting in 2009, to help developers in everything from app prototyping and debugging, to user analytics, planning tools, and customer support. These days developers can choose from a gazillion tools to scale their development across multiple platforms, monetize their apps, test, monitor app performance, manage security, study user behaviour, cross-promote apps to attract & engage users, and manage API use and simplify use of cloud services. Our DeveloperEconomics.com website tracks over 20 developer tools categories, and over 500 vendors.

"The productivity gains from using external tools and services far outweigh the costs, which are negligible compared to the salary of good developers." Startup CEO, Sweden

The data from our last two mobile developer surveys consistently show that developer tools are not just nice-to-have. Tools are in the must-have app development arsenal of the most sophisticated developers, and also those making most revenues.


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In fact, only 14% of all mobile developers in our recent research don’t use any tool.

So which are the most popular tools and why? The next chart shows the breakdown of developer tools popularity, by sector, from our recent survey of 6,000+ mobile developers.

User analytics tools such as Flurry , Google Analytics and Appsalar, are by far the most popular among developer tools and services, used by 38% of developers in our sample. User analytics tools are essential in helping developers understand how are users behaving within their application, and using that to improve downloads and revenues through marketing campaigns.

"The biggest bottleneck in cross-platform tools is performance issues and delay in exposing the latest native APIs. But for most applications this is something you can live with." Leo Palacios, Engineering Director, Dextra Technologies


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The next most popular tools category is cross-platform tools (CPTs), such as PhoneGap, Sencha, Xamarin, Appcelerator and RunRev, used by 29% of all mobile developers. CPTs are essential in reducing cost when scaling up support of multiple platforms, and usually optimised for either enterprise IT, games or web developers.

It’s interesting to note that the backend-as-a-service tool category is oversupplied by 48 BaaS vendors, but under-demanded, with only 11% of mobile developers using such a service.

“BaaS is really hard to justify the value of. It has value in terms of efficiency gains rather than revenue gains. An enterprise would pay 20x to drive revenues but only 2x times to drive cost efficiencies.” David Reisfeld, CTO, Exceda

At the other end of the popularity spectrum we find cross-promotion networks (8%) and voice services (6%). Cross-promotion networks like TapJoy and Chartboost has raised a lot of controversy and has been targeted by Apple in the past couple of years due to the artificial inflation of app rankings it may create. Voice services are currently employed by a small number of developers despite the fact that they can add “edge” to an application with features like speech recognition, voice search, voice calls and texting.

Tools, a hygiene factor for mobile platforms

Across the tools spectrum, iOS developers are the most active and sophisticated users, with 92.5% reporting that they use at least one tool. With the exception of cross-platform tools and ad networks, iOS shows the highest usage in each tool category, as shown in the next graph. Ad networks are the most popular tools/services among Windows Phone developers, in agreement with the popularity of advertising as a revenue model on this platform.

For newer platforms like BlackBerry 10, the tool usage level drops to 71%, indicating both the Hobbyist and Explorer early adopter crowd of BB10, but also the early days in developer tools support for the new platform. At the same time, BB10 developers show the most appetite for tools, particularly user analytics and push notifications, which tools vendors should take notice.


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"It doesn't make sense for a startup to do native development for multiple platforms, both in terms of time and money." George Spyrou, Founder, Plusapps LLC

In today’s hyper-competitive app economy, developers can’t innovate without a supporting 3rd party tool ecosystem. In this economy, iOS developers have a clear advantage as being most advanced in tool use, and therefore having the infrastructure to innovate and differentiate. The better tools at the developer’s disposal, the more competitive that developer is.

For newer platform vendors like BB10, Firefox OS and Tizen, a SDK economy around their platform, is not just a competitive advantage, but a fundamental hygiene factor. SDK vendors are a necessary component of a successful ecosystem. Lack of critical SDKs can even become a reason for developers to churn from a platform. This was the case with PhoneGap which delayed PayPal API support, following PayPal API changes, and pushed some developers to abandon PhoneGap so as to not lose revenues.


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Tools are for pros, not rookies

The best testament to the importance of the SDK economy, comes from the fact that the more experienced a developer is, the more likely they are to use third party tools. One could be excused for thinking that developer tools are for rookies, since experienced developers prefer to do things “their way”. Our data shows the exact opposite picture, as shown in the next chart. The more experienced the developer, the higher the usage of developer tools, and in an almost linear way. Experienced developers are much more serious about understanding users, reducing multi-platform costs, monetising from ads and fixing post-launch crashes. An interesting exception is the consistent decline in the use of BaaS, crash reporting and push notifications tools among developers with 10+ years of experience, as these veteran developers often opt for in-house solutions for integration with legacy databases or internal infrastructure.


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The common challenge for developers is the tool discovery bottleneck. There is far too much noise in the developer tools space. Developers are often at a loss when required to select a tool for a particular job either because they don’t know any tools or because they do not know how to go about selecting a tool, i.e. what are the right questions to ask. Which is why experienced developers will have a better visibility of the tools market, knowing which tools are right for the job. Our DeveloperEconomics.com portal tracks 500+ tool vendors across 20+ categories, and helps developers exactly in knowing what tools are available for the job.

With over 500 developer tools companies, both incumbents and startups, it would be natural to think that the developer tools space is congested. Yet, with developers pushing the boundaries of apps, someone needs to address developer needs popping across the spectrum. One such need is for tools to help developers connect with, and support, users during the app usage phase. As notes George Karavias, Founder of education apps startup Anlock, “Users are not so willing to give feedback nowadays. Even if they


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want to contribute, they expect to see their suggestion implemented immediately, which is impossible - so they’re demotivated.” Solving the customer support bottleneck for app developers is an area where we expect to see substantial tools innovation.


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CHAPTER TEN

The kaleidoscope of HTML5 app development

HTML5 is a technology that stands to rival the duopoly of the app economy. In terms of Mobile Developer Mindshare, 52% of developers are using HTML5 in some form, closely behind Android (57%) and iOS (72%) developers, according to our Q3 study of 6,000+ mobile app developers.

Once we double click on that 52% of HTML5 mobile mindshare, a kaleidoscope of colour and options appears behind the five short letters of HTML5. Some developers will build responsive websites that scale down gracefully when viewed on smartphones and tablets. Others will develop fully fledged web-apps that work offline and are smart enough to adapt to the user’s location. Others will combine HTML5 elements with native APIs within a wrapper such as PhoneGap, or Icenium and which can then be sold via app stores. Others will leverage native platform support for JavaScript APIs available through BlackBerry WebWorks and Firefox OS. And others will use cross platform tools which take JavaScript and convert it to a native app such as Appcelerator for enterprise IT use, or Ludei and Ejecta for gaming apps. Last but not least, we have seen cases of HTML5 being used by app building tools as an interim language, so that it can be rendered across multiple devices with ease.

"We thought of developing our own HTML5 framework because we didn't want to be limited by the Sencha Touch or jQuery mobile capabilities, for example when they will support new platforms such as Firefox OS. But we postponed as it requires a major investment." Ciprian Borodescu, CEO, Webcrumbz

The next table analyses the many approaches to HTML5 mobile development, including routes to market and examples of tools used.


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Approaches to mobile development using HTML5

HTML5 usage Description Distribution Built using (examples)

Mobile websites Websites that are designed to be rendered on small screens, incl. responsive websites

Web Wordpress

Mobile web apps Websites with offline storage and deeper browser integration

Web BackBone.js, JQuery Mobile

Hybrid apps (using native wrapper)

HTML code wrapped in a chrome-less browser, within a native shell.

Native app-store PhoneGap, Marmalade, AppMobi, Icenium, Trigger.io

Apps using native JavaScript API

Platforms exposing software and hardware services through a JavaScript API

Native app-store BlackBerry Webworks, Firefox OS, Tizen

HTML5/JavaScript apps converted to native

Tools which take JavaScript and convert it to a native app

Native app-store Appcelerator (generic). Ludei, Ejecta (gaming)

Amidst this kaleidoscope of approaches to HTML5 mobile development we asked: which developer tools and approaches are used most often? Based on our recent survey of 6,000+ mobile app developers, we found that the largest share (38%) of HTML5 developers develop mobile websites with another 23% developing mobile apps, i.e. incorporating offline functionality and deeper browser integration. Hybrid apps, such as those produced by PhoneGap account for 27% of HTML5 mobile developers. A minority of 7% of HTML5 mobile developers use platforms exposing native APIs via JavaScript, such as Firefox OS and BlackBerry 10. Last but not least, 5% of HTML5 mobile developers use a Javascript-to-native converter tool like Appcelerator.


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In a future Q3 2013 report we ‘ll be looking in detail at the HTML5 approaches to market, and what are the revenues, tools, and challenges for each.

"We use HTML5 a little but it doesn’t give the high end graphical experience we want. We use only use HTML5 for apps with low interactivity." Jeff Bacon, Mobile Director, Fuel Industries


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CHAPTER ELEVEN

Understanding the complex mosaic of developer personas

Forward-thinking businesses today realise that developers are their innovation engine, their most promising affiliates, their evangelists or their fastest growing resellers. Businesses are discovering that developers are modern-day channels that help them reach new consumers, discover new use cases and propel their growth.

The millions of dollars in developer marketing efforts serve one purpose: to persuade developers to use a specific platform, network, tool or API set. Yet, in 2013, mobile developer attention is becoming extremely scarce, and dominated by the three leaders of developer marketing: Apple, Google and Facebook. Competition for developer attention is intensifying month by month, with players bombarding developers with promotions, organising developer events and preaching the advantages of their APIs or toolsets.

The scarcity of developer attention has to do not just with skepticism to marketing. Learning a new platform takes months. Learning a new SDK can take weeks. Learning a new API can take days. It’s a serious investment of resources. As a result, developers take the decision to invest in a platform, tool or API seriously.

Most business are resorting to traditional, textbook marketing techniques to segment developers - by technology (web, Java, Windows, Android, Apple), job function (coders, designers, architects, team leads, IT managers, CxOs), by company size, app category (games vs enterprise developers), by audience (B2C vs B2B) or by demographics (age, income, education or location).

Yet all these segmentation models are bound to fail, as they fundamentally neglect to address how developers make investment decisions in a new platform, API or SDK. In other words, it’s not age, job function, audience or technology background that influences how a developer chooses between Apple, Google, Windows Phone, BlackBerry or Tizen.

To understand the complex mosaic of developer personas we segment developers in terms of their outcomes, or what developers are trying to achieve. This is based on the Jobs to Be Done methodology, popularized by Harvard Professor Clay Christensen and which constitutes today’s cutting edge in segmentation techniques. We have backed this model with unprecedented statistical rigor and hard data, from the largest-ever mobile developer survey of 6,000+ developers.

__________ More data?


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Building on our earlier Developer Economics 2012 research work, we extracted hard data on thousands of developers in terms of their aspirations, motivations, challenges and plans in app development. We produced a unique model of eight developer segments - the Hobbyists, the Explorers, the Hunters, the Guns for Hire, the Product Extenders, the Digital Content Publishers, the Gold Seekers and the enterprise IT developers.]

How do these eight segments and three clusters contribute to the app economy? More importantly, when do these segments interact with platforms?

We find that Explorers and Hobbyists, those seeking to learn, have fun and self-improve, make up 33% of the mobile developer population but only 13% of the app economy revenues. These segments prefer - more than average - BlackBerry 10, Windows Phone as a platform, as these are more often associated with experimentation and learning.

The Hunters and Guns for Hire, those seeking revenues from the app economy, make up 42% of the developer population and 48% of the app economy revenues. These segments prefer - more than average - iOS as a


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platform, due to the consistent revenue-generating opportunities of the platform.

Product Extenders, Enterprise IT developers, Digital Content Publishers and Gold Seekers, aiming at extending a business, make up 29% of the developer population, and a whopping 39% of app economy revenues. These segments prefer - more than average - Android and HTML5 as a platform - due to the reach that these platforms offer across the entire smartphone and feature phone installed base.

Our data also shows, that contrary to popular perception, money is not the only motivator for mobile app developers - in fact, far from it. Revenues - in some form or other - are the goal for only 50% of mobile developers, which challenges the assumptions of developer marketing programs that use money as the main developer incentive.

The hierarchy of developer motivations on the next chart shows some surprising findings. At the base of the pyramid, the majority (53%) of mobile developers are motivated by creativity or the sense of achievement, making this the most popular among motivators. The fun of making an app, is a motivator for 40% of mobile developers - which is important to many more developer segments than just Hobbyists and Explorers.


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Our Developer Segmentation Q3 2013 report drills deep into each of these developer segments. We map developers in terms of their goals (“what” they are trying to achieve), their success metrics (“how” they are trying to achieve it) and more importantly the personal motivations behind their choices (the “why”).

We further profile each segment across 5 dimensions: who and where they are, which markets they target, what choices they make, how they make money, what platforms they select and what challenges they face. These unique insights into developer segments can provide a strong competitive advantage for organisations for which developer outreach is a key element of their strategy.

The Developer Segmentation report is available on our website: www.developereconomics.com/Seg13


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CHAPTER TWELVE

Sizing the app economy

In the past few years the mobile industry has experienced a powerful upheaval sparked by the launch of the first iPhone and the creation of the first, true app ecosystem. This event brought about a gradual restructuring of the mobile value chain and a steady shift in value from the traditional pillars of the mobile economy, telco services and mobile handsets into app ecosystems. This emerging component of the value chain is what we call the “mobile app economy” and it represents the fastest growing area in the mobile value chain today and will continue to do so in the foreseeable future.

The value migration is profound as can be seen in the following graph. In 2012, the global app economy accounted for 18% of the combined app services & handset market. We estimate that by 2016 the contribution of the app economy will rise to 33% of the combined market, equivalent to half of the handset market.

While several sources have estimated revenues generated via app-stores and advertising, these estimates are missing the largest part of the app economy. The contribution of app store sales to the total size of the app

__________ More data?


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economy is less than 20%, while the combined app store sales and advertising market accounts for just over a quarter of revenues generated via apps.

VisionMobile has developed a model for sizing the direct app economy, that uses the large-scale, fine-grained dataset obtained via Developer Economics surveys. This model incorporates not just revenues generated directly through apps but economic activity generated via commissioned app development, mobile app e-commerce as an app monetisation model (i.e. not including e-commerce as core business), VC funding, services for app developers and several other income sources directly related to mobile apps.

The global app economy was worth $ 53Bn in 2012, and expected to rise to $ 68Bn in 2013. It is growing at a 28% CAGR between 2012 and 2016, reaching $143 Bn in 2016. The bulk of this growth will come from APAC and LatAm, the fastest growing markets in terms of smartphone penetration.

We estimate the global mobile developer population in 2013 will reach 2.3M individuals with each organisation that is directly involved in the app economy employing 4.5 developers on average, although this figure varies significantly by region. The mobile segment corresponds to 12.6% of the


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global developer population. In other words, 1 in 8 software developers is involved in mobile development in 2013.

VisionMobile’s App Economy Forecast 2013 - 2016 model combines results from our Q3 2013 Developer Economics survey and a large set of industry figures and indicators to deliver both bottom-up and top-down approaches in sizing the app economy. The VisionMobile App Economy Forecast 2013 - 2016 report provides a unique set of data points on the current state and growth of the app economy including:

• Forecasts (2013 - 2016) for revenues across regions (North America, Europe, Asia-Pacific, Latin America, Middle East & Africa)

• Forecasts (2013 - 2016) for revenues across platforms (Android, iOS, HTML5, Windows Phone)

• Forecasts (2013 - 2016) for revenues across revenue sources (App stores, In-app advertising, mobile e-Commerce, outsourced development, other)

• Forecasts (2013 - 2016) for the Mobile Developer population globally

• Mobile developer population by region, platform and revenue source for 2013

The report is available on our website: www.developereconomics.com/Forecasts


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distilling market noise into market sense

Vision mobile developer_economics_q3_2013_v1

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