visionmobile report

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VisionMobile 2013 | www.DeveloperEconomics.com

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Contents

Key takeaways

Chapter 1 - Mobile Duopolies:

The widening gap between the haves and the have nots

Chapter 2 - The Developer Tools Landscape:

The cogs and gears of the app economy

Chapter 3 - Rise of the Mega SDKs:

The developer tools landgrab

Also by VisionMobile

Mobile Innovation Economics Workshop

A strategy workshop introducing the new economic

thinking necessary for successful innovation by telcos.

Find out more visionmobile.com/strategy


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Contents

Key takeaways

Chapter 1: Mobile duopolies

The widening gap between the haves and the have nots

Chapter 2: The Developer Tools Landscape

The cogs and gears of the app economy

Chapter 3:The rise of the Mega SDKs vendors:

Consolidation in the developer tools land grab

Also by VisionMobile

Mobile Innovation Economics Workshop

A strategy workshop introducing the new economic

thinking necessary for successful innovation by telcos.

Find out more visionmobile.com/strategy

About VisionMobile

VisionMobile is an ecosystems analyst firm working with

top-5 telcos and handset makers. We are best known for

Developer Economics, the de-facto knowledge hub of the

app economy. We are also behind Innovation Economics,

the strategy workshops helping CxOs to define winninginnovation strategies. Our mantra: distilling market noise

into market sense.

VisionMobile Ltd.

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London WC2E 9RZ

+44 845 003 8742

www.visionmobile.com/blog

Follow us on twitter: @visionmobile

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Key messages

The following are based on VisionMobiles recent survey of 3,460 developers across 95

countries, with a balanced sample across North America, Europe and Asia, plus

developer interviews and research insights.

Mobile market duopolies

Mobile handset Industry growing at 23% CAGR. Despite the doom and gloom

circling many mobile handset makers, the industry has been on a steady growth

trajectory achieving a 23% CAGR in revenues since 2009. Underlying this growth are

the increasing smartphone sales that now account for over 40% of all handset sales,

fuelled by low cost Android devices that are rapidly eating away feature phone market

share.

A game of duopolies. The 700 million smartphones shipped in 2012 areunderpinned by the Google / Apple duopoly in mobile platforms which jointly

commands 80% in mobile developer mindshare. This is underscored by the Samsung

and Apple handset maker duopoly, which combines a smartphone market share of 46%,

and accounts for 98% of handset industry profits across the top-8 handset OEMs.

Excluding Apple, total handset industry profits are at 2009 levels, implying that Apple

is reaping all of the added value out of the apps-based mobile computing paradigm

which it introduced. In this same period, Samsung captured the remaining value by

quickly transforming from a feature phone incumbent to a smartphone leader, eating

away the profits of the old guard Nokia who was slow to react to the changing basis of

competition - from the best phones, to the best apps.

Samsungs profit recipe.As the top-selling handset OEM in 2012, Samsungs stellar

success with Android smartphones is down to three differentiating elements: firstly in-

house ownership of the most expensive hardware components, ensuring both earliest

availability and lowest bill of materials. Secondly, fastest time to market in launching a

new smartphone based on the latest Android software release. Thirdly, a strong Galaxy

brand and marketing campaigns that differentiate Samsung from the crowd of tens of

Android handset makers.

Tablets are still outsold 3 to 1 by PCs, but they are expected to reach parity in the

next 1-2 years. This will be a critical inflection point for the PC duopoly of Microsoft

and Intel, who are seeing their once-dominant position in computing being severelydisrupted by mobility, where Android dominates platforms and ARM licensees

Qualcomm and Mediatek dominate chipsets.

Platform haves and have nots

Developers swarm around iOS/Android but keep looking for viable

alternatives. Having established a dominant position in consumer markets, Android

continues to lead mobile developer mindshare, with 72% of developers now developing

for the platform, a 4 percentage point increase compared to our 2012 survey. iOS shows

a 5 percentage point drop in Mindshare, which we attribute mostly to the influx of

Asian developers showing a clear preference towards Android. Developer mindsharevaries widely by region, with Android leading in Asia and Europe, while North America


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shows platform parity. The considerable share of mobile developers intending to adopt

Windows Phone (47%) and BB10 (15%) indicate that there is still developer interest in a

viable third app ecosystem.

HTML is the main technology co-opetitor to the Android-iOS duopoly.HTML is the third most popular choice among mobile developers, 50% of whom use

the HTML-based set of technologies as a deployment platform (to create mobile web

apps) or as a development platform (to create hybrid apps or HTML code translated

into native apps). Overall, HTML is much more successful as a technology, not a

platform, with Firefox OS (and WebOS before that) being the main web-centric

attempts at creating a complete alternative to iOS and Android, including native

platform APIs, and a means to distribute and monetise apps. HTML should therefore

be seen not as competition, but rather as a complement to native platforms, and one

that reduces externalities by lowering barriers to entry and exit from these platforms.

Windows Phone: buy it and they will come.Windows Phone remains unchangedin developer mindshare at 21% of developers despite the very high intention to adopt in

our previous 2012 survey. Developers seem to be waiting for the right market signals

a critical mass of handsets - before investing in the platform. Despite Windows Phone

challenges, Microsoft has positioned Windows 8 as a tablet-too platform, and thanks to

strong Windows license renewals, the company is able to reposition mobile market

share figures to their advantage.

BlackBerry mobile mindshare remains stable at 16%, with developers being on

standby mode in anticipation of BB10 sales. Moreover, Intentshare, i.e. developer plans

to adopt BlackBerry, has not subsided since our the 2012 survey, indicating that the

major outreach effort undertaken by RIM during the build-up to BB10 release is having

some positive impact. Symbian mindshare, on the other hand, is rapidly and

predictably disappearing, as is, Samsungs Bada, despite outperforming Windows

Phone sales in Q3 2012.

74% of developers use 2+ platforms concurrently, but money is

concentrated in iOS/Android. At the same time, developer platform choices are

now narrowing. On average mobile developers use 2.6 mobile platforms in our latest

survey, compared to 2.7 in 2012 and 3.2 in our 2011 survey. 80% of respondents in our

sample develop for Android, iOS or both, making them the baseline in any platform

mix. Developers that do not develop for one of these two platforms generate, on

average, half the revenue of those developers that do, leaving little doubt as to the

concentration of power within these two major ecosystems.

Most developers are iOS-first. iOS is a clear winner in the shoot-out against

Android, with 42% of Apple/Google developers prioritising iOS, against 31% for

Android. Several other factors come into play when making a decision on the lead

platform, such as prior experience or local handset sales patterns, but iOS comes out

as a clear winner across all platform competitive points except cost and learning curve.

iOS, Android and BlackBerry are lead platforms. In our survey of 3,460

developers, iOS emerged as the highest priority platform, with 48% of iOS developers

using it as the lead platform among all others. iOS, Android and BlackBerry constitute

lead platforms, which are most often used as a main platform among their developers.

Windows Phone and HTML are extension platforms, as they are typically used by


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developers to extend their app footprint into customer segments or regions not

adequately covered by their lead platform. At the tail end of developer preference are

Symbian, Qt, Flash and JavaME ,the gap fillers, now used to address all remaining

market niches.

HTML5 needs better native platform APIs, and development environment.

HTML5 is becoming a viable alternative to native for developers working on app

categories such as Business & Productivity (used by 42% of HTML developers),

Enterprise (32%) and Media apps (28%). To compete with native, HTML5 needs better

native API access (35% of HTML developers), a better development environment

(34%), better debugging support (22%). More importantly, optimised HTML5 devices

were not as seen as important as the native API access or dev environment. This leads

us to conclude that HTML proponents such as Facebook, Mozilla and Google should

focus on cross-platform tools and development environments on at least equal

measures as they focus on full platform efforts like Facebook Platform, Firefox OS and

Chrome OS.

Tablets reaching developer mindshare parity with smartphones, but TVs

remain niche. The majority (86%) of 3,460 developers in our survey target

smartphones, while a large share of them also develop on tablets, led by iOS developers

(76%) indicating the attractiveness of the iPad as a development and monetisation

platform. TV development remains niche (6% of Android developers), as the hype cycle

around the Smart TV experience is yet at a very early stage.

The revenue haves and have nots

The steep learning curve of app entrepreneurship. Developers have a lot toimprove in planning their app business. 49% of developers in our sample build apps

they want to use themselves, but end up generating the least revenue. The most

revenue-generating app planning strategies are those that extend an app either into

verticals or different geographies. To some extent, these strategies rely on an already

established and successful business: apps that have been tried and proven in at least

one market and are generally less risky options or low hanging fruit for developers.

Advertising is now the most popular revenue model for apps, used by 38% of

developers in our global sample. At the same time, it is the monetisation model with the

least revenue per app. In-app purchases and Freemium are on the rise, having grown by

50% compared to our 2012 survey and are now used by more than a quarter of thedevelopers in our survey. In-app purchase is now the second most popular revenue

model on iOS, with 37% of developers using it, falling slightly behind Pay per download.

Lack of customer understanding in lean app development.We find it

remarkable that only 24% of developers in our sample plan their apps based on

discussions with users, a figure which does not change with development experience or

proficiency. This indicates that the bottleneck of the build-measure-learn cycle of lean

development is the measuring, or understanding customers. This highlights the need

for a frictionless two-way feedback channel between developers and users, much like

what GetSatisfaction pioneered for web apps, and which now HelpShift is pioneering

for mobile apps.


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The Developer Tools Landscape

Over 500 tools for todays app developers, designers and entrepreneurs. In

the last 3 years, developers have moved from being coders, to innovators, designers and

makers - and a prized customer for the 100s of firms making up the SDK economy, partof the bigger B2D (business to app developer) market. Developer expectations for tools

and services have changed in the recent years due to the flurry of startups, from

Appcelerator to Zong, which emerged. App developers today have over 500 third party

tools (APIs, SDKs, components) to choose from, catering to every stage along the

developer journey. Developer tools, from ad networks to user analytics SDKs are a core

part of the Android and iOS platform economics, and a major platform differentiator.

Ad services mainstream, other tools use is fragmented. 90% of the nearly

3,460 developers we surveyed use at least one third-party tool or service, with an

average of 1.47 tools used concurrently. Among those developer services that we

benchmarked the most popular is ad networks and exchanges (34% of developers),reflecting the widespread popularity of advertising as a revenue model. Advertising is

the most popular revenue model, while ads can also act as a promotion channel that

facilitates app discovery. User analytics (28%) and cross platform tools (27%) follow in

popularity with a longer tail formed by developers of crash analytics, BaaS, cross

promotion networks and voice services.

Googles AdMob, is clearly the dominant mobile ad platform, adopted by

65% of developers that use ad services. AdMob has recently expanded to ad

exchange services, a move that aims to counter the threat that ad exchanges pose for

Google. Second runners, each used by 12% of developers in our sample, are Inneractive,

an ad-exchange/mediation service and InMobi, an ad network growing out of India tobecome a major player in emerging markets. Apples iAd service comes fourth overall

with 11%, and despite being quite popular among iOS developers, AdMob is the leading

ad service on iOS, used by 66% of iOS developers that we surveyed.

PhoneGap and Appcelerator lead developer mindshare across 100+ cross

platform tools. PhoneGap tops CPT rankings, used by 34% of developers, followed by

Appcelerator and Adobe Air with 21% and 19% developer mindshare respectively. With

over 100+ cross platform tools available, the choice for developers can be a challenge.

Amidst differentiating features for CPTs are access to native APIs, performance

optimisation and the ability to reproduce native UI elements on each platform.

The user analytics duopoly: Google (69%) and Flurry (49%) are well ahead

of competition. User analytics services are becoming increasingly important as a tool

to optimise app engagement and reach, and act as a proxy for user feedback. User

analytics services are significantly more important for iOS developers - used by 39% of

iOS developers in our survey vs. 28% for Android, 25% for WP and 15% for BlackBerry.

Usage of analytics serves as an indicator of the level of competition among developers

on different platforms.

Parse leads with 28% mindshare in Backend-as-a-Service tools but

competition for second spot is heating up as BaaS rises in popularity. As mobile apps

become more sophisticated, so the need increases for back-end features like managing

users, introducing social features, or synchronizing cloud data. Mindshare leader Parse

is followed by enterprise-focused CloudMine (11%). Sencha.io and ACS, both


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commanding a 10% share among developers using BaaS, are solutions that are well

integrated with their corresponding development frameworks (Sencha and

Appcelerator) and therefore do not directly compete with services such as Parse or

StackMob. The Backend-as-a-service market is in early stages, crowded with over 30

vendors that strive to differentiate by constant innovation and additions to their featuresets - we have yet to see any service dominating the sector to the extent observed in

other developer tools sectors, such as ad services or user analytics tools.

TapJoy (53%) is the leader in cross-promotion network mindshare,

according to our survey of 3,460 developers, with Flurry AppCircle (20%) and

Chartboost (18%) following behind. Cross-promotion networks (CPNs) are used by

developers both as a means for promoting their apps by means of free traffic exchange

across apps, ads paid by cost-per-app-install or in some cases incentivised installs.

CPNs are also used as a revenue model, for developer acting as inventory publishers.

Voice APIs have not made the transition from web to mobile. While voiceservices cater to diverse use cases, their mobile developer mindshare is limited to single

digits, as voice APIs are still tied to the developer perception of telephony, a long way

from the future voice-enabled apps. Voice-enablement leaders Twilio and Voxeo have

been much popular within web developer circles, with Twilio rising once in late 2011 to

a top-10 API provider ahead of Facebook, as tracked by ProgrammableWeb. Yet these

voice services are yet to make a major impact in mobile apps. Skype (telephony URIs)

and Microsoft (speech recognition and transcription) are often used, followed by Twilio

and Tropo API users who focus on conference calls, inbound/outbound calling and

voice portal services. Telcos like AT&T, Verizon, Telefonica and Deutsche Telekom have

also released voice APIs in 2012 in a move to extend telephony assets into new revenue-

generating voice use cases.

The Developer tools universe expands and consolidates. The Business to

Developer (B2D) market, has seen a continual expansion in the last three years, with a

flurry of B2D startups emerging to address the ever increasing developer needs. For

every 1,000 app startups, there is a developer tools startup. In parallel, there is

consolidation taking place via organic expansion (e.g. Flurry, Papaya expanding

services organically) and via mergers and acquisitions (e.g. Appcelerator acquired

Aptana, Cocoafish, Particle Code and Nodeable, Apigee acquired Usergrid and Instaops,

Burstly acquired TestFlight and Flurry acquired Trestle).

Consolidation to continue to 2015, led by mobile marketing and enterprise.

We expect the trend of consolidation of the tools landscape to continue unabated until

2015, six years after the B2D market for apps was born, while expansion will focus only

on unaddressed developer tools sectors in the post-launch phase of the developer

journey. We expect two main clusters of developer tools to lead the consolidation:

firstly, marketing tools, as the discovery bottleneck will only worsen as we go from 1.5M

to 10M apps, and while the Apple and Google stores continue to dominate app

distribution. Secondly, Enterprise Mobile Services, which are creating revenue demand

for vendors to mobilise their intranets, and to allow employees to bring their own

device (BYOD) to work. Unlike the consumer apps space, enterprises have a substantial

IT budget per employee, and very stringent requirements for data security, identity

management, backend systems integration, and support-level agreements.


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About Developer Economics

Welcome to Developer Economics 2013, the fourth in our de-facto research series of the

developer economy. This report focuses on developer tools, examining six developer

sectors: ad-networks and mediation engines, backend-as-a-service, cross-platform

tools, cross-promotion networks, user analytics, and voice services.

We also take a close look at many of the critical issues for developers today, such as

most popular platforms, opportunities and challenges with HTML5, cross-screen

development, app revenue models, monetisation potential and much more.

The findings of this report are based on an online survey of over 3,400 developers, as

well as 20 qualitative interviews, conducted in October 2012. Our sample was truly

global, with a balanced sample across North America, Europe and Asia, but also

significant minorities of developers from Africa, Oceania and Latin America.

We hope this report gives you insight into the latest trends on mobile development and

an understanding of the rules of the new app economy emerging around apps and

ecosystems. We hope you enjoy reading it - as much as we enjoyed writing it!

AndreasP, Matos, Christina, AndreasC, Mark, Vanessa, Chris, Michael and

Stijn at VisionMobile.

@visionmobile

www.visionmobile.com/blog

Thank you!

We'd like to thank all the people and organizations that helped us make this project

possible. Special thanks go to:

Our sponsors, without whom we wouldn't have been able to complete this project:

AT&T, Mozilla, Nokia, BlackBerry, BrightCove and Telefonica.

Our Marketing and Regional partners that helped us reach an unprecedented 3,460developers across the globe, breaking new records for the largest, global mobiledeveloper survey.

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

Alexey Sazonov, Christopher Kassulke, George Karavias, Raj Singh, MaximilianoFirtman, Tzach Hadar in our Developer Advisory Board that provided valuablefeedback throughout this research.

And finally, Kinvey and SoundCloud for their input during the preparation of theresearch.


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Research methodology

The Developer Economics January 2013 research is based on a large-scale online

developer survey and one-to-one interviews with app developers.

The online survey was designed, produced and carried out by VisionMobile over a

period of five weeks between October and early November 2012. One to one interviews

were conducted from November to December 2012. The online survey received over

3,400 responses, more than double the number of our previous 2012 survey.

Respondents came from 95 countries. The online survey was available in 7

languages (English, French, German, Korean, Portuguese, Russian and Spanish) and

promoted by25 marketing and regional partners within the app development

industry. As a result, the survey reached a substantial number of respondents across all

continents. The survey respondents were balanced across Europe (39%), Asia

(27%) and North America (24%). We also gathered a developer sample from Africa

(4%) and South America (4%). In terms of countries, respondents came primarily from

the US (18.7%), India (13.9%) and the UK (5.6%) followed by Russia, Germany and

France. We also received responses from Venezuela, Uruguay, Vietnam and Kazakhstan

to name a few of the 95 countries in total, making this report truly reflective of the new,

global, mobile app economy.

Respondents were asked to indicate the main platform they use for development among

14 mobile and desktop platforms. To minimise the sampling bias for platform

distribution, we compared the distribution across a number of different developeroutreach channels and identified statistically significant channels that exhibited the


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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. In order to exclude

outliers in our sampling, we derived median rather than mean values where

appropriate. Re-calibrating and adjusting our research methodology was deemednecessary as we strive to capture trends across an ever growing, diverse and widely

distributed developer population.


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CHAPTER ONE

Mobile duopoliesThe widening gap between the haves and the have nots

Despite the doom and gloom circling the mobile handset industry, and the slowdown in

handset shipments observed in Q3 2012, the industry has been in fact on a steady

growth trajectory achieving a 23% CAGR in revenues since 2009. Underlying

this growth are the increasing smartphone sales that now account for over 40% of all

handset sales, a massive 12.5 percentage point rise since Q3 2011. The growth in

smartphone sales, is fuelled by low cost Android devices that rapidly eat away feature

phone market share.


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2012 was the year that established Androids dominance in the smartphone market. In

Q3 2012 Android accounted for 74% of all smartphones sold and 30 % of all handsets

sold.

Propelled by Android, Samsung became the top-selling mobile handset OEM,starting in Q1 2012, and ending a 14-year reign by Nokia. Samsungs success

with Android is down to three differentiating elements, as we covered in our Mobile

Insider note on The Apple and Samsung Profit Recipe (www.visionmobile.com/insider)

- ownership of the most expensive hardware components, including screens, memory

and processors, ensuring both earliest availability and lowest bill of materials.

- fast time to market in launching a new Android handset based on the latest

Android software release, beating all other handset makers to early adopter profits.

- strong Galaxy brand and marketing campaigns that differentiate Samsung from

the crowd of tens of Android handset makers.

Samsung has led not just the Android race, but has also challenged the iPhone on asingle handset basis: for the first time, an Android handset, Samsungs flagship Galaxy

S3, became the top selling smartphone, outselling the iPhone 4S during Q3 2012.

Meanwhile Apple experienced a slump in sales during most of the year, despite having avery successful Q4 2011. At the same time, Apple is expected to recover in Q4 2012


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following a strong performance by the iPhone 5. Industry analyst consensus forecasts

record iPhone sales, in the region of 43 to 63 million units; a wide range indeed, but

higher than any previous quarterly actuals.

Handset industry profits grew thanks to Apple

The booming handset industry is underpinned by the Google / Apple duopoly in

mobile platforms; a duopoly that, in turn sustains the handset maker duopolyof

Apple and Samsung. With a combined smartphone market share of 46%, Samsung and

Apple account for nearly all handset industry profit in Q3 2012 Apple and Samsung

took 60% and 38%, respectively of all profits across the top-8 handset OEMs.

Excluding Apple, total handset industry 2012 profits are at 2009 levels,

implying that Apple is reaping all of the added value out of the apps-based mobile

computing paradigm which it introduced. In this same period, Samsung captured the

remaining value by quickly transforming from a feature phone incumbent to asmartphone leader, eating away the profits of the once dominant Nokia who was slow

to react to the changing basis of competition - from the best phones, to the best apps.

To sustain its profits Apple needs to refresh its unique product experiences which are

challenged by the Galaxy S3, and to continue spearheading new unique product

experiences in TVs, e-readers, watches and beyond.


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The lack of profitability among established handset vendors is not a sign of an

unhealthy industry but of an industry in transformation. As mobile devices become

mobile computers the value will be increasingly shifting towards apps and third party

developers, a similar path to that tracked by the PC industry. In this new paradigm only

those who are offering integrated experiences through a tailored value chain willremain profitable, as shown by Apple and Samsung, and much like Harvard Professor

Michael Porter has observed in every other industry.

Tablets challenge the PC status quoGoogle has raised the bar on the tablet front by releasing a high quality device (Nexus 7)

at a low price-point ($199 for the basic version), putting its weight behind the low-end

disruption of the tablet status quo and the rise of the 7-inch tablet. Apples reaction,

releasing a less expensive iPad, is a clear sign that the Android threat in tablets is a

valid one, and a rare concession in Apples recent history. While Apples iOS remains

the dominant platform in tablets with a powerful ecosystem fuelled by a steady supply

of apps, the iPad will be challenged by the Nexus, much like the iPhone 4S sales werechallenged by the Galaxy S3.

Tablets are still outsold 3 to 1 by PCs, but they are expected to reach parity in the

next 1-2 years. This will be a critical inflection point for the likes of Microsoft and Intel

who are seeing their once-dominant position in computing being disrupted by mobility,

where the Android platform and ARM-licensed Qualcomm and MediaTek chipsets

dominate. While smartphones can barely be seen as competitors to PCs and notebooks,

tablets present a real PC substitute for the majority of consumer use-cases. The danger

for Microsoft and Intel is not just the dwindling size of the PC market relative to mobile

computing, but also the threat of being uprooted from their dominant position in their

own (PC) market.The economics of appsDevelopers and publishers mostly value reach and revenue opportunities, in that order.

This is directly reflected in the choice of platforms they develop on iOS and Android

which offer the widest reach, as we will see in the next section. The choices that

developers make, translate into consumer demand via the added value created by apps,

which then translates into developer supply. This cycle of consumer demand and

developer supply is known as the network effects that have transformed the mobile

industry in recent years.

Consumer choices are extensively reported and tracked by handset vendors and

analysts alike. In Developer Economics we examine the less known and understood

developer part of the equation. In the Developer Economics 2013 survey, attracting

more than 3,400 respondents, we asked developers about their choice of platforms and

screens, revenue models, third party services they use and many other important

elements of the app economy.

In doing so we aim to understand how developer choices, together with consumers

choices will affect the future of the mobile industry, an industry that now attracts VC

funding that exceeds the R&D expenditure of each of Google, IBM, Apple or Nokia

according to investment firm Rutberg & Co. With 30% of that funding going to mobile

applications, developers are now at the centre stage of the mobile industry dollars.


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Developers Driving Ecosystems

HTML is the main technology alternative to the Android-iOS duopolyfor mobile developer mindshare

Having established a dominant position in consumer markets, Android continues to

lead mobile developer mindshare, with 72% of developers now developing for the

platform, a 4 percentage point increase compared to our 2012 survey. While Android is

still perceived by developers as a less profitable platform compared to iOS (as we shall

see), its market share offers the potential for unprecedented reach into smartphone

users.

The long term health of the Android ecosystem will depend on Googles ability to

manage API and screen fragmentation especially as the majority of the Android

installed base is running an API version that was introduced at least two years before

the latest version of the API, as of January 2013. Android developers must also consider

different ways to engage with a demographically diverse and fragmented user base, the

average purchasing power of which is significantly diluted by rock-bottom priced

Android devices attracting low-income consumers.

iOS shows a 5 percentage point drop in Mindshare, which we attribute mostly to the

influx of Asian developers showing a clear preference towards Android.

Developer mindshare varies widely by region: for example mobile mindshare

for iOS in Asia is 48% vs. 76% for Android, while in North America the two platforms

command an equal mindshare of 65%. Platform mindshare varies also between mobile


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and desktop developers, i.e. developers who develop only on mobile, versus those that

also develop apps for desktop platforms.

HTML is the third most popular choice among mobile developers, 50% of whom use

the HTML-based set of technologies as a deployment platform (to create mobileweb apps) or as a development platform (to create hybrid apps or HTML code

translated into native apps). Note that we have not compared our HTML mindshare

results to the earlier 2012 survey, as the latter looked only at mobile web as a

deployment platform.

Overall, HTML is much more successful as a technology, rather than a

platform, with Firefox OS (and before it WebOS) being the only attempt at creating a

complete, web-centric alternative to iOS and Android, including native APIs, and a

means to distribute and monetise apps. With Firefox OS in early commercialisation

stages, HTML should be seen not as competition, but rather as a complement to native

platforms, and one that reduces externalities by lowering barriers to entry and exit fromthese platforms.

Windows Phone mindshare remains unchanged despite the very high Intentshare score

in our previous Developer Economics survey. Developers seem to be waiting for the

right market signals a critical mass of handsets - before adopting the platform. The

release of Windows 8 could help Windows developers make the leap into mobile

development however there are only anecdotal signs to this effect as sales of Windows

Phone 8 devices have been lacklustre. Microsofts attempt to harmonise the user and

developer experience across screens is the right strategy for protecting their existing PC

revenue streams and establishing a foothold on the mobile computing market.

Moreover, Microsoft has positioned Windows 8 as a tablet-too platform, and thanks to

strong Windows license renewals, the company is able to reposition mobile market

share figures to their advantage. To provide a fighting chance for their mobile strategy

to succeed, Microsoft must iterate fast both its platform and own hardware (Surface) in

order to reach the right product-market fit.

BlackBerry mobile mindshare remains

unchanged at 16%, with BlackBerry developers

being on standby mode in anticipation of BB10

sales. Moreover, Intentshare, i.e. interest in

BlackBerry has not subsided since our the last

Developer Economics survey, indicating that the

huge outreach effort undertaken by RIM during the

build-up to BB10 release is having some positive

impact. Symbian mindshare, on the other hand, is

rapidly but predictably disappearing, as is,

Samsungs Bada, despite outperforming Windows

Phone sales in Q3 2012.

We try to address 90% of all

Android users. This includes

about 60% of users who are 5

versions behind.

Founder

App development house


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Windows Phone: buy it and they will come

Mobile developer Intenshare shows 47% of developers plan to adoptWindows Phone but poor consumer adoption is holding them back

Microsofts Windows 8 & Phone 8 strategy brings a unified Metro interface to all

devices and enables significant code sharing between apps across PCs, tablets and

smartphones. However these synergies have yet to pay off and Windows Phone is facing

a bootstrapping issue despite Microsofts multi-billion-dollar investment in the

platform. Lack of developer interest is not the issue here, as highlighted by the high

levels of Intentshare. Developers seem to be on standby, waiting for the market signals

the consumer adoption - that justify an investment in the platform. Moreover,

Microsofts attempt to fund development of Windows Phone apps created

misalignment of developer incentives. Instead of focusing on consumers, developers

were focused on getting the easy money, which resulted in sub-par apps. As we said

earlier,you cant buy developer love.

The majority of mobile developers have already adopted iOS and Android, hence the

relatively low Intentshare among those platforms. Beyond iOS and Android, mobile

developers are showing interest in Facebook, with 23% of mobile developers indicating

that they plan to adopt the platform. Facebook offers little in terms of mobile app

development at present but it provides unprecedented reach. With around 1Bn active

users, it is one of the widest reaching digital platforms on the planet.


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The considerable levels of Intentshare for Windows Phone (47%) and BB10 (15%)

indicate that there is still developer interest in a viable third app ecosystem .


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Multi-platform developers are better off74% of developers use two or more platforms concurrently

74% of developers use two or more platforms concurrently. At the same time,

developer platform choices are now narrowing. On average mobile developers use 2.6

mobile platforms in our latest research, compared to 2.7 in 2012 and 3.2 in our 2011

research. The Android-iOS duopoly in smartphone sales is gradually creating a

concentration of developers around these two platforms: 80% of respondents in our

sample develop forAndroid, iOS or both, making them the baseline in any

platform mix. Developers that do not develop for one of these two platforms

generate, on average, half the revenue of those developers that do, leaving little doubt

as to the concentration of power within these two major ecosystems .

In our Developer Economics 2013 survey of over 3,400 developers we found that 49%

of developers use just one or two mobile platforms concurrently and 75% use up to

three mobile platforms. The number of platforms developers use depends to some

extent on which is their lead platform. In mobile development, loyalty to one platform

is not something that pays off. Our research shows that the revenues are higher when

using more platforms. For example, an iOS developer porting an app on Android is

likely to experience some growth in revenue. At the same time, for developers working

on four or more platforms, higher revenues are probably the result of extending an

already successful app to more platforms. Obviously, this is not something that all

developers can afford to do; it is a strategy more suited to large publishers orcommissioned developer teams that are large enough to support a number of platforms.


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iOS vs Android shoot-outiOS is the best platform for generating revenue but Android provides abetter learning curve and lower cost

With iOS and Android forming the baseline for mobile app development, the obvious

question is:which is best for app discovery, learning curve, cost and revenue

potential? The shoot-out between the platforms favours iOS, which was ranked higher

on four out of the seven platform aspects, with a clear advantage on app discovery (50%iOS vs. 23% Android) and revenue potential (66% iOS vs. 12% Android). The perception

that iOS provides better monetisation opportunities is well established with developers

as evidenced by our survey data. The iOS platform also leads, but with a smaller margin

on development environment and documentation. On the other hand, Android has a

clear advantage on cost (32% Android vs. 14% iOS) and a small lead on learning curve.

For most developers, the platform perceptions boil down to a decision about which

platform to prioritise, or which of the two platforms to develop for first, where iOS

clearly comes on top with 42% against 31% for Android. Several other factors

may come into play when making a decision on the lead platform, such as prior

experience or regional platform mix, but it is fair to say that iOS comes out as thewinner in developer perceptions.


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Most mobile developers are iOS-first48% of iOS developers prioritise Apple against all other platforms. Theyare followed by Android and BlackBerry developers

In our survey of over 3,400 developers, we compared platform preference, by asking

developers which is their main platform among all the platforms they are using. iOS

emerged as the highest priority platform, with 48% of iOS developers using it as the

lead platform among all others. Among Android developers, 44% use it as a lead

platform. BlackBerry developers also tend to prioritise their platform: 38% of those

using BlackBerry, use it a their lead platform. Together iOS, Android and

BlackBerry constitute the lead platforms.

Besides lead platforms, Windows Phone and HTML are seen as a main platform by

about a quarter of all developers that use them. We call these extension platforms,

as they are typically used by developers to extend their app footprint into customer

segments or regions that are not adequately covered by their lead platform.

At the tail end of developer preference are Symbian, Qt, Flash and JavaME , which we

call gap fillers. These are mainly older-generation platforms that are now used to

address all remaining mobile market niches, but cannot survive as lead platforms on

their own. Symbian for example, still has a large installed base, almost double that of

BlackBerry, but given the expiry date set on Symbian handset production, few

developers will invest much effort on the platform.


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HTML5 trades off capability for portabilityHTML5 wins in code portability and low cost development but needs abetter dev environment and native API access to compete with native

HTML5 is becoming a viable alternative to native development across a number of app

categories. In Developer Economics January 2013 we found that HTML developers

mainly focus on specific app categories such as Business & Productivity (42% of HTML

developers), Enterprise (32%) and Media apps (28%). On the other hand, Games are

not a common category among HTML developers (12%).

We asked developers that use or are planning to use HTML about the reasons for

platform selection. The majority indicated code portability as the main incentive for

using HTML5. Low cost development is the seconddriving force for HTML5 adoption, highlighted by

51% of developers.

HTML is still an extension platform as we saw

earlier. We asked developers that use, have used or

are planning to use HTML what they think HTML5

needs to compete with native platforms. Access to

native APIs comes top challenge with 35% of

developers indicating this as a critical success

factor. HTML5 will always be a step behind in

support for native APIs, given that platformvendors are always a step ahead of cross platform

Multi-platforms development is a

major challenge. For a solo

developer there is so much they

need to look at. You can use cross-

platform tools like PhoneGap but

its not that simple, there is a lot of

tweaking to be done. Going native

can also be hard, it takes a lot of

time and patience. HTML5 will help

things go in the right direction.

Glenn SteinJava developer andMaker of PhraZapp


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tools and browser vendors. In addition, the HTML5 development experience is subpar,

with developers indicating that a better development environment (34%) and better

debugging support (22%) are needed. More importantly, optimised HTML5 devices

were not as seen as important as the native API access or dev environment. This leads

us to conclude that HTML proponents such as Facebook, Mozilla and Googleshould focus on cross-platform tools and development environments on at

least equal levels as they focus on full platform efforts like Facebook

Platform, Firefox OS and Chrome OS.


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Tablets go mainstream, TV apps still niche64% of developers now develop for tablets, while HTML is equally usedacross smartphones, tablets and desktop

The majority (86%) of 3,460 developers in our survey develop on

smartphones, while a large share of them also develop on tablets, led by iOS

developers (76%) indicating the attractiveness of the iPad as a development and

monetisation platform. Despite the rise in Android tablet share during 2012, we did not

observe a significant increase in the share of Android developers targeting tablets (64%

vs. 62% in our Q1 2012 survey) although we believe this is likely to change in the near

future.

HTML developers take a more platform-agnostic approach, as they develop across

smartphones, tablets and PCs almost equally, according to our survey, a testament to

the use of HTML as cross-screen app development technology. At the same time,

HTML limitations, such as lack of support for native

APIs, tooling and device optimizations, prevent it from

becoming a swiss-army knife for cross-platform

development.

TV development remains niche, at the same levels

reported in Developer Economics 2012, as the hype

cycle around the Smart TV experience is yet at a very

early stage. This seems in line with findings from

research firm NPD, who reports that only 15% of Smart

The next 6 months will be about the

tablet war. As cheaper models enter

the market, consumption of both the

devices and the apps that run on

them will increase tremendously.George KaraviasDeveloper and CEO

Anlock


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TVs are connected to the internet, limiting their appeal to app developers.

It is also worth noting the trend of using phones or tablets as a remote control for other

smart, connected appliances in home automation, in-car entertainment, health

monitoring, retail, logistics and even industrial monitoring.


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Advertising is the most popular revenue modelAdvertising used by 38% of developers but is the monetisation modelwith the least revenue per app

Advertising has increased in popularity over the past year and has now

overtaken pay-per-download as the most popular revenue model, used by

38% of mobile developers in our survey. Advertising is particularly popular on Android

and Windows Phone, used by 45% and 53% of developers respectively. This isconsistent with the view that consumer spending on Android is generally lower than on

iOS, leading developers to select alternative means for monetising their apps. However,

advertising lags behind all other revenue models when it comes to monetisation,

bringing on average of around $1,000 per app-month, considerably lower than other

revenue models. Advertising is particularly popular in Asia (50% of developers in Asia),

in Africa (42%) and South America (41%). These are mainly emerging economies where

direct consumer spending on apps may be lower than more affluent regions.

Pay-per-download (PPD) remains popular, used by 34% of the developer population in

our survey. However, it is still the dominant revenue model on BlackBerry and iOS,

with 53% and 38% of developers of those platforms using it. In terms of revenue, PPDfares better than advertising, generating about 30% more revenue per app-month,


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however it comes second to last among all revenue models. PPD is more frequently

used by developers in Europe (33%) and the US (32%).

In-app purchases and Freemium are on the rise , having grown by 50%

compared to our 2012 survey and are now used by more than a quarter of thedevelopers in our survey. In-app purchase is now the second most popular revenue

model on iOS, with 37% of developers using it, falling slightly behind PPD. After

subscriptions, IAP brings in the highest average app-month revenue at $1,835. IAP and

Freemium are used much more widely in Asia than in any other region (30% and 31%

respectively, of developers in Asia).

Subscription-based models, while not very popular (used by just 12% of developers),

come out on top in terms of revenue per app-month, at an average of $2,649.

As mentioned in our previous Developer Economics report, while the subscription

model is more lucrative than other revenue models, it is not a model that any developer

can use as it requires significant investment in ongoing, engaging content thatconsumers will pay for an a regular basis.


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Revenue haves and have notsFor developers interested in making money, 67% earn less than $500per app per month and are below the app poverty line.

Around 18% of 3,460 respondents in the Developer Economics 2013 survey indicated

that they are not interested in making money from apps. Nevertheless, out of the vast

majority of developers that are in it for the money, 67% are not making enough to

sustain them or their business, i.e. they are below the app poverty line of $500 perapp per month. For the majority of developers, app development is not financially

rewarding.

Overall, less than 1 in 5 Blackberry developers make more than $500 per app-month.

The situation is almost as challenging on Windows Phone where just 19% of developers

generate more than $500 per app-month, with 61% below the poverty line. The findings

of our survey are somewhat better for Android and iOS although these platforms too,

are far from a developer paradise: 55% of iOS and 54% of Android developers are below

the poverty line. Excluding developers that are not interested in profit, 62% of iOS

developers and 67% of Android developers are not making more than $500 per month

per app.


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HTML seems a surprise here with just 45% of HTML developers under the poverty line,

far lower than any other platform. However, there are fundamental differences between

HTML and native platforms which are responsible for the differences observed here:

developers using HTML for web development have access to a much larger user base

comprising desktop and mobile users, irrespective of platform. Among HTMLdevelopers, subscription-based revenue models are much more popular than on native

platforms pointing to established online content or service businesses that have

expanded on to mobile.


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The steep learning curve of app entrepreneurship49% of developers build apps they want to use themselves, but end upgenerating the least revenue

Almost half of developers (49%) in our survey decide which apps to develop based on

their own needs. Those same developers end up generating the least amount of revenue

per app per month, indicating that they have a lot to learn in how they plan their app

business. Naturally, planning a business based on own needs may yield a good

customer understanding, but lacks the rigor of market research or of extending proven

app recipes into new countries or verticals.

We find it remarkable that only 24% of developers in

our sample plan their apps based on discussions with

users, a figure which does not change with

development experience or proficiency. This

indicates that the bottleneck of the build-

measure-learn cycle of lean development is

the measuring, or listening in to user needs.

This highlights the need for a frictionless 2-way

feedback channel between developers and users,

much like what GetSatisfaction pioneered for webapps, and which now HelpShift is pioneering for

The developer learning curve is

far steeper on the business side

than on the coding side, and its

getting steeper.George KaraviasDeveloper & CEOAnlock


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mobile apps.

To decide which apps to build, a sizeable share of

developers uses market research and competitive

intelligence. Market research and competitiveintelligence are well-established practices in business

development and we expect that the increasingly

business-savvy developer population will, in the near

future, invest more effort in these elements when

designing a product strategy.

Developers that publish more apps per year tend to make decisions based on different

criteria than those publishing only a few apps per year. For developers publishing 16+

apps, the decision mainly lies with clients or management - these are mostly

professional developers that work on commissioned apps or as employees of larger

publishers where the decision on which app to work on is mainly based on a defendablebusiness case. Developers publishing more apps also tend to rely on market research

more, whether that is purchased research or own research through app store

monitoring and analytics services.

The most successful strategies are those that extend an app into markets,

either into verticals or different geographies. To some extent these strategies

rely on an already established and successful business: these are apps that have been

tried and proven in at least one market and are generally less risky options or low

hanging fruit for developers.

Competitive analysis is the key

when it comes to decide what app

to develop next.

Jai Jaisimha

CEOOpen Mobile Solutions


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CHAPTER TWO

The Developer Tools LandscapeThe cogs and gears of the app economy

App developers have witnessed many, radical changes since the creation of the apps

economy. In 2008, app developers were the engineers and geeks experimenting with

new mobile software platforms. In the next two years to 2010, developers transitioned

from engineers to entrepreneurs, and the mobile industry moved from developers will

come to us to we must go to them. Developers moved from being coders, to

innovators, entrepreneurs, designers and marketers. Today the developer is not just an

engineer, entrepreneur, designer or marketers - developers are a prized customer

for the 100s of firms making up the SDK economy, part of the bigger B2D

(business to app developer) market.

Developer needs have grown, too, to cover the entire lifecycle of an app, across

planning, development, reach, monetisation and customer support. The focus of

developer attention has moved from coding to marketing and to supporting customers.

We model developer needs based on jobs to be done, from the seminal work

of Harvard Professor Clayton Christensen in understanding user incentives as a way to

design products.

Developers are called to answer key questions such as: How do I select a platform? How

do I identify my target market and which devices are my customers using? How do I

monetise my apps? What is the best way to promote my apps? How do I beta test with

real users? How do I go about setting a pricing strategy? How do I get user feedback

and manage reputation in the marketplace?

All these questions correspond to the numerous jobs to be done for developers,

mapping to the needs that developers have to address along the app lifecycle. These

same jobs create opportunities for SDK and tools vendors. The jobs to be done and

opportunities for SDK vendors are best illustrated by the Developer

Journey, a concept we first introduced in our Developer Economics 2010 report,

shown on the next page.

The structure of the Developer Journey hasnt

changed much in the last three years; what has

changed is the flurry of startups that emerged to

cater to those needs, making the developer

journey concept a compass for opportunities in

the SDK economy. This SDK economy,

popularised by the likes of Appcelerator and

Zong, has emerged to support the diverse and

growing range of developer needs.

App developers today have over 500 third

party tools (APIs, SDKs, components) to

choose from, catering to every stage along the

Tool and libraries significantly

changed the way apps are

developed today. Primarily saving

time on coding and influencing

the way one decides about features

(based on availability of libraries)

and new capabilities.Shai LevyFreelance Android developer

Israel


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developer journey. These tools lower barriers to entry, reducing development costs,

smoothing the learning curve, multiplying go to market channels and streamlining

marketing.

Developer tools, from ad networks to user analytics

SDKs are a core part of the Android and iOS platform

economics. Such tools augment the networks effects

present in platform ecosystems by accelerating app

creation and reducing developer costs and risks. At the

same time, lack of such tools on competing platforms

like Windows Phone or HTML is a serious handicap

making competition with the incumbent duopoly even

harder. While leading platforms like Apple often divide

and conquer among SDK vendors with changes to APIor app store policies, follower platforms like Windows

Phone often subsidize and bundle developer tools

within their marketing campaigns. Developer tools

have become a major platform differentiator

and a developer attractor.

Developers today have at their disposal an abundance of

tools including app store analytics, user analytics, cross-

platform tools, crash analytics, marketing and

monetisation tools, all of them with zero entry-level

pricing. We have been researching the SDK economy for

the past few years, and have been tracking a growing

Having presence in 12 countries

meant that localisation has been a

real challenge during app

development. Adapting content

and ensuring that everything is

right for the particular audience

required significant effort.Alexander LfflerSenior Product Manager (mobile)Yelster digital

Searching for developer tools on

Google isnt effective its not the

results, I just dont know how to

describe the tools I am looking

for.Raj SinghFounder & CEOTempo AI, Inc


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number of (currently) over 20 developer tools categories. For detailed tool listings see

our developer portal onbuild.DeveloperEconomics.com.

Table: Developer Tools and Services

Name Description Example of vendors

A/B testing tools Allow developers to measure user reactionsand performance when introducing new appfeatures.

Pathmapp, Swrve, Amazon A/B Testing

Ad exchanges Technology platforms for buying and sellingonline ad impressions

Inneractive, MobClix, Burstly

Ad networks Ad networks connect advertisers to in-appinventory.

AdMob, InMobi, Leadbolt

App discovery services Tools to facilitate discovery of mobile appsthrough search or recommendations.

AppCarousel, Appsfire, Chomp (now Apple)

App factories Code-free, visual design tools for easily

building mobile applications, aimed at non-coders

Mobile Roadie, Appflight, Red foundry,

iBuildApp

App store analytics Tools to analyse app downloads and sales Distimo, App Annie, AppFigures

App testing & certification Mobile application testing and certificationservices.

Apkudo, TRUSTe, uTest

Back-end as a Service Cloud services providing data storage, usermanagement and messaging services

Parse, CloudMine, Sencha.io

Beta-testing tools Platforms facilitating app testing by endusers

TestFlight, The Beta Family, Mob4Hire

Crash analytics tools Tools for app crash analytics, bug tracking,beta distribution, performance analysis.

BugSence, TestFlight, Crittercism

Cross platform tools Tools to create applications for multipleplatforms from almost the same codebase or

design tool.

PhoneGap, Appcelerator, Adobe Air

Cross-promotion services Ad networks, or promotion channels thatallow the promotion of apps within otherapps

Tapjoy, Flurry, Chartboost

Customer support Streamlined customer feedback and support HelpShift

In-app purchase tools Allow developers to monetise by in-appselling of additional content, features or

virtual goods

Boku, PapayaMobile, Fortumo

Performance management Tools monitoring and managing the appperformance and availability

Soasta, New Relic (web), Compuware

Project management Tools & services used to manage appdevelopment projects, both for agile andtraditional structured methodologies

Microsoft Project, Basecamp, Pivotal Tracker,Assembla, Redmine

Push notifications Enables pushed message to be sent to an

app as part of notifications or marketingcampaigns

warp.ly, Urban Airship

Source code management Configuration management and codecollaboration tools, either self-hosted orcloud-based

Git, Mercurial, SVN, GitHub, BitBucket, Kiln

Translation / localisationtools

Translation services and localisation toolsfor apps

Transifex, Applingua, Localeyes

UI prototyping tools Tools to prototype the user interface of anapplication

Balsamiq, InVision app

User Analytics Tools that track app usage in order tooptimize user engagement.

Google, Flurry, Apsalar, Tapstream

Source: VisionMobile


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In Developer Economics 2013 we surveyed six developer

tools sectors: advertising, back-end as a service, cross-

platform tools, cross-promotion networks, user analytics

and voice services. We ll be taking a closer look at these

sectors next.

We picked the key players in each sector and ranked them

by their popularity among developers. We also asked

developers about the reasons they selected each service

and identified the top decision criteria for each tool and

sector. Finally, we found out how popular each tool sector is and how its usage varies

across the major mobile platforms. In the next section we present our key findings for

most of these sectors. We will be dissecting these results even further on our developer

portal atbuild.DeveloperEconomics.com providing more detailed information on

individual tools, and what developers think about each one of them.

Marketing has been a steep

learning curve for us. When we

started we knew nothing about

it.Duncan SteeleCo-Founder at Valetta Ventures


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Advertising is the most popular developer service34% of developers integrate an advertising service within their app butonly 14% use a back-end service

As part of the Developer Economics 2013 research, we found that 90% of the 3,460

developers we surveyed use at least one 3rd-party tool or service, with an average of

1.47 tools used concurrently. Among the top mobile platforms (Android, iOS, HTML,

BlackBerry and WP), iOS developers tend to use third party tools and services more

frequently, followed closely by Android, indicating the higher maturity of tools in the

two main ecosystems. Usage of third party tools and services is highest among

developers working on media apps (including news, sports, weather, magazines) andgames developers, using on average 1.80 and 1.75 tools respectively.

Use of third party tools and services rises with the number of apps developed and

therefore the scale of the organisation which developers work for. Developers who have

worked just on one app during the past 12 months use, on average, 1.27 of the developer

tools in our survey, rising to 2 tools for developers working on 10 or more apps.

However, usage does not increase with the number of apps for all the developer tools

surveyed. For example, cross platform tool (CPT) usage is stable for developers working

on 2+ apps. On the other hand, usage of advertising services rises with the number of

apps a developer is working on.


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Developers below the poverty line (less than $500 per app per month) use on average

1.55 tools; this creates a negative feedback cycle where revenue expectations cant

justify an investment in tools to improve the app development or marketing process.

More affluent developers are using 1.94 tools on average, which indicates that they are

more sophisticated in their marketing and development process.

Among those developer services that we benchmarked the most popular is ad networks

and exchanges, reflecting the widespread popularity of advertising as a revenue model.

Advertising is the most popular revenue model but developers also use it as a

promotion channel that facilitates app discovery.

The next most popular tool category is user analytics, i.e. tools that track usage of and

user behaviour within an app. Visibility into user behaviour is essential for developers

that want to decide which modules and features are used most by end-users and

optimise their app accordingly. User analytics services also help developers understand

their user-base and improve user targeting. Cross-platform tools are almost as popularas user-analytics overall, used by 27% of developers.

Crash analytics services help developers identify bugs in live apps by generating crash

reports and sending them to the developer. Despite the profound benefits that such

services can have on the quality and user experience, our survey shows that just 17% of

developers use crash analytics or bug tracking services.

A sector that has been on the rise lately is the Backend-as-a-Service, providing services

such as user management, remote data storage and push notifications to developers.

14% of developers in our survey employ BaaS services. Coming next in popularity are

cross-promotion networks, only used by 7% of our sample.

It is important to note that some of the developer tools we benchmarked compete

directly with services available by native platforms. For example, iOS provides crash

reporting and sales analytics, while Google provides user analytics. However native

platform services usually lack in terms of features or flexibility compared to dedicated

3rd party developer tools.


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Cross Platform ToolsPhoneGap and Appcelerator lead developer mindshare across tens ofCPTs

Cross-platform tools (CPTs) address real challenges for developers. Cross-platform

tools allow developers to create applications for multiple platforms - usually mobile,

but increasingly tablets or TV screens - from almost the same codebase or from withinthe same design tool. CPTs reduce the cost of platform fragmentation and allow

developers to target new platforms at a small incremental cost. More importantly,

cross-platform tools allow software companies targeting multiple platforms to reuse

developer skills, share codebases, synchronise releases and reduce support costs.

CPTs can be used to develop native, hybrid and web apps and come in several

technology flavours: JavaScript frameworks, App factories, Web-to-native wrappers,

Runtimes and Source code translators. There are over 100 CPTs that we identified in

our Cross Platform Tools report published in February 2012.

Developers most often use several cross-platform tools; on average CPT developers willuse 1.91 CPTs, confirming the lack of maturity and niche nature of cross platform tools


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much like we observed in our dedicated CPT survey just over a year ago. Moreover, we

found that one in four developers will use more than three cross platform tools. The

lack of a one-size-fits-all and immaturity in the CPT landscape is what is stalling cross

platform tools from shifting the balance of power in the iOS / Android duopoly towards

alternative platforms.

Cross platform tools are most popular for developers focusing on HTML development,

with 38% of of them using CPTs for development. CPTs and particularly JavaScript

frameworks and web-to-native wrappers (e.g. PhoneGap), provide a relatively smooth

transition to mobile apps for web developers: in our Cross-Platform Developer Tools

2012 report we found that 60% of developers using CPTs have over 5 years experience

in web development. Usage of CPTs is popular among iOS developers, while usage

among Windows Phone developers is much lower, presumably due to historical lack of

support for the iOS platform from CPT vendors and Microsofts financial incentives for

the creation of native apps.

PhoneGap tops CPT rankings, used by 34% of developers, followed by Appcelerator and

Adobe Air with 21% and 19% developer mindshare respectively. With over 100+ cross

platform tools available, the choice of which is the right tool for developers can be a

daunting challenge. Choosing between CPT technologies is not straightforward (i.e.

whether to go for a web-to-native wrapper or a JavaScript framework). Moreover,

developers need to try out a cross-platform tool to see if it aligns with their needs in

terms of performance, learning curve, access to native APIs or look & feel. Its never a

black or white decision.

The most important selection criterion for CPTs is their availability across platforms.

Due to their deep platform integration, CPT tools support iOS/Android platforms first,

and others secondly. Beyond cross-platform availability, 38% of developers using CPTs

select their tools based on development speed and 33% based on the learning curve.

Since CPTs aim to expedite and facilitate development across platforms, they should

provide a clear advantage over native platforms when it comes to speed and ease of

development to justify their use. Amidst differentiating features for CPTs are access to

native APIs, performance optimisation and the ability to reproduce native UI elements

on each platform.


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Ad networks and mediation enginesAdMob dominates ad networks (65%) and Inneractive leads among adexchanges (12%)

With advertising being the most widely used revenue model among developers,

advertising services attract considerable developer interest taking the top spot among

the developer tools that we benchmarked. Providers of ad services monetise their

service by taking a direct cut of advertising revenue generated by developers through

revenue models like cost-per-click, cost-per-impression or cost-per-action. With 100+

ad networks and exchanges, there is intense competition, regional specialisation and

vertical-oriented solutions. In spite of this diversity, several ad services are not

profitable.

The ad services we benchmarked are either advertising

networks that provide direct access to their own pool of

ads, or ad exchanges (also known as mediation engines,

but excluding real-time bidding exchanges) that act as

aggregators, automating access to a large number of

individual ad networks. Ad exchanges offer some

flexibility to developers by allowing them to select

Selecting an ad network is a

lottery. Its easier if you have a

regional-centric app, but its a

challenge if you have a global app,

as theres no best-performer

globally.John CooperFounderPyxis


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between multiple ad networks through a single SDK -

offering better fill rates and eCPMs. At the same time,

ad network SDKs often provide access to more

features available, than the generic features available

through an ad exchange.

Our survey of 3,460 developers indicates that, among

developers using ad services, 27% use an exchange

and on average use 1.59 ad services providers. There is

a large variance in the number of developers using ad services depending on the scale of

development: those developing less than 5 apps per year tend to use ad-services much

less than those developing more than 5 apps per year. Among developers that develop

more than 16 apps per year, most likely working for large publishing houses, software

services companies or agencies, about 60% use ad services in their apps.

Ad services are most popular with those who develop primarily on Windows Phone andAndroid (46% of WP developers and 43% of Android developers), and less so on iOS

and BlackBerry (35% and 31% respectively). This is in agreement with our findings on

revenue models being used on each platform, with developers on Android and

Windows Phone relying heavily on advertising to monetise their apps.

AdMob, a service acquired by Google in 2010 is clearly the dominant

platform in mobile ad services, adopted by 65% of developers that use ad

services. AdMob has recently expanded to ad exchange services, a move that aims to

counter the threat that ad exchanges pose for Google. Second runners, each used by

12% of developers, are Inneractive, an ad-exchange/mediation service and InMobi, an

ad network growing out of India to become a major player in emerging markets:

InMobis mindshare is 17% in Asia and 33% in Africa according to our survey. Apples

iAd service comes fourth overall with 11%, and despite being quite popular among iOS

developers, AdMob is the leading ad service on iOS, used by 66% of iOS developers that

we surveyed.

Ad exchanges are complementary to ad networks. For example, developers will use one

service with high eCPM but low fill rate and another with lower eCPM but nearly 100%

fill to plug the gaps in the better paying service. When selecting an ad network or

exchange, availability across platforms comes on top in both cases. Ease of integration

is also very important, particularly so for developers using ad networks. Supported ad

formats, revenue potential and fill rate are secondary selection criteria, and therefore

constitute differentiation factors across advertising services.

We're reviewing and changing

the ad-networks we work with on

a monthly basis to get the best

deals available.CTOGames industry


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User AnalyticsThe user analytics duopoly: Google (69%) and Flurry (49%) are wellahead of competition

User analytics services are becoming increasingly important as competition for app

users continues to rise. The ability to track how users interact with apps is extremely

valuable for app developers, designers and product managers alike, and to some extent

acts as a proxy for user feedback. The absence of a direct two-way communication

channel between developers and users means that user analytics often provide the only

feedback channel from user to developer. Our survey of 3,460 developers shows that

28% of developers use user analytics services overall, and the usage rises with the

number of apps developed, reaching 39% among developers working on more than 10

apps per year.

User analytics services are significantly more important for iOS developers that

developers of other platforms - used by 39% of iOS developers in our survey vs. 28% for

Android, 25% for WP and 15% for BlackBerry. Usage of analytics serves as an

indicator of the level of competition among developers on different

platforms. The greater the competition, the higher the need for insights on user


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behaviour provided by user analytics services. The red ocean competition in the iOS

App Store pushes developers towards increased sophistication in tracking and

improving user engagement and retention efforts, and therefore greater use of user

analytics tools. In comparison, among the top platforms, user analytics tools are the

least popular with BlackBerry developers (15%), indicating lower levels of competitionamong developers on this platform.

The picture in user analytics services is quite telling with two services dominating:

Google and Flurry. Google has traditionally been strong in web analytics but it has now

extended its stronghold on to mobile platforms commanding a 69% mindshare among

developers employing user analytics services. Its dominance is mainly observed among

HTML developers. Runner-up Flurry, is used by 49% of developers employing user

analytics services, particularly on iOS (64% vs. 58% for Google). Flurry, being one of

the pioneers in user analytics is the de-facto analytics platform for developers reaching

over 700 million devices each month. Beyond these two services, there are numerous

smaller players vying for third place, currently held by Testflight Live, a service recentlyacquired by ad mediation service Burstly. Note that user analytics are a distinct tools

sector to app store analytics (e.g. AppAnnie, Distimo), which provide analysis of app

sales and downloads.

User Analytics services are mostly used in media and entertainment apps (36% of

developers). Google analytics is stronger overall across all these categories, with the

exception of Games where both Google and Flurry are equally strong.

Developers opt for analytics services that are

easy to integrate within their apps or that are

available across several platforms as indicated

by 51% and 49% of developers using user

analytics services, respectively. Optimising

analytics comes as third priority, with 31% of

developers using user analytics services being

concerned with the depth of analytics, and 13%

being interested in real-time reports. Cost is

also a deciding factor as pointed out by 28% of

developers employing user analytics.

Mobile analytics help you understand

how users interact with the apps and what

customers really want. They areultimately useful to UX specialists to help

them find out where to aim, how to give

real value to the user, which features to

offer, and how to improve the overall

experience. Dimitris MakrisCo-Founder and Head of MobileTrebbble


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Backend-as-a-ServiceParse leads with 28% but competition for second spot is heating up asBaaS rises in popularity

As mobile apps become more sophisticated, so the need increases for back-end features

like managing users, introducing social features, or synchronizing data with the cloud.

App design and development is usually the focus of the initial app efforts, with back-end features lacking sophistication or scalability, until the very time when they are

mostly needed. Off-the-shelf mobile Back-end-as-a-service (BaaS) services can save

considerable time for developers that need backend support for their apps. At the very

basic level, mobile BaaS services offer a managed, cloud-hosted database that scales as

the user base grows. BaaS services provide additional functionality on top of this base

layer that usually includes user management, push-notifications, social features and

large-file cloud storage.

Our survey of 3,460 developers indicates that backend services are currently used by

14% of developers, and more frequently by developers working on 16+ apps per year

(25%). Backend services are used slightly more on iOS (18% of iOS developers) than on


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