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Mobile Apps State of the Stores Rick Rasmussen General Consulate of Canada Palo Alto, CA
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Mobile Apps State of the Stores
Rick Rasmussen General Consulate of Canada Palo Alto, CA
Outline
• Worldwide impact of mobile phones
• Mobile phones are computers
• Ba@le of the operaAng systems • App development for phones
• App distribuAon • App stores • So, you want to market your app?
• Trends and Metrics
2
Worldwide Impact of Mobile Phones
3
The Seven “Mass Media”
1. Print (books, pamphlets, newspapers, magazines)
from the late 1400s
2. Recordings (records, tapes, CDs, DVDs) from the late 1800s
3. Cinema from about 1900
4. Radio from about 1910
5. Television from about 1950
6. Internet from about 1990
7. Mobile Phones from about 2000
4
Mobile explosion • World populaAon ~7.0B • Current subscribers 2.6B • End 2010 4.0B iSuppli • End 2011 5.2B InfoneAcs
• In 2010, phone prices as low as $15 iSuppli
• Mobile broadband growing at 110% CAGR InfoneAcs
• 577M using mobile web, 1.7B by 2013 Juniper
• 2.1B users will “pay by phone” by 2013 Juniper
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Mobile growth
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Developing countries
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Developing countries
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Mobile in Developing Countries
• Mobile compensates for poor infrastructure – Bad roads – Slow postal service
• GDP grows by 0.8% for every 10 extra phones per 100 people (world bank)
• Mobile payments – Bypass corrupAon – More efficient movement of capital – Kenya: 7M users in a 38M
populaAon base
9
Advent of the ‘smartphone’
• Feature phone: – Runs apps provided by
carrier – Includes email, internet,
keyboard, PDA funcAons • First model “Simon” from
IBM 1992 – Touchscreen, stylus,
predicAve input… – Cool!
• Smartphone: – Allows downloads of new
applicaAons from carriers, third parAes and others
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Global Smart phone market share
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Total 2Q: 40.962 M Annualized: 163.848 M
Global smartphone market by OS
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North American smartphone market
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Source: Gartner Research 2Q09
Mobile Phones are Computers
14
iPhone 3G teardown
Phones as devices
• CommunicaAon • InformaAon • Entertainment
– Mobile Content
• Phones are computers – Increased processing power – Increased memory – Increased connecAvity
• Portable operaAng systems are enabling technologies • Sojware more important than hardware
– ApplicaAons are the new currency
15
The Sensory Phone • Mobile computers, fully aware of local
environment, mimicking human senses • Sight:
– SAll and/or video camera – Scanner – High resoluAon display output
• Sound: – Audio input with noise correcAon – Speech recogniAon – Hi-‐fidelity audio output
• Touch – Full screen, MulA-‐touch, MulA-‐gesture – HapAcs (sensory feedback) – Proximity sensors – Accelerometers – LocaAon (GPS and LBS)
• Smell and Taste? Soon!
16
The Connected Phone • New protocols keep devices
connected • Wireless WAN
– CDMA, GSM, 3G, 4G, LTE • Wireless LAN
– EV-‐DO, Edge, WiFi, WiMax • Wireless PAN
– Bluetooth, UWB • Mobile TV
– ATSC, DVB-‐H, ISDB-‐T, DMB-‐T • Wired protocols
– USB, Micro USB, Ethernet • Wireless charging (soon)
17
Lots of new touch screens
18
New emerging players
• Hardware is changing: – Many new entrants designing to sojware “standards”
– Korea: • Samsung • LG
– New breed of Chinese players • Huawei • HTC • HTC • Quanta • TCL/Alcatel
19
Constant Hardware InnovaAon
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Droid is a 3-‐way effort between Motorola, Verizon and Google.
Slide out physical keyboard
Verizon (over AT&T) network
iDon’t
Ba@le of the OperaAng Systems
21
OperaAng Systems Opera&ng System Developer Source Availability
MENS (Motorola, Erisson, Nokia, Siemens)
Proprietary to each company
None (although some code base provided to Symbian)
Symbian Symbian FoundaAon (9 companies)
Closed -‐> Open Source
Windows CE Microsoj Closed with API license model
BlackBerry OS RIM Closed with limited licenses
Apple OS Apple Closed
Android Google Open Source
WebOS Palm Available under license
22
Basic OS comparison
23
Source: engadget.com
Windows Mobile
• Spinoff from Windows CE – Designed to bring the “Windows
Experience” to other devices – OS intended to dominate consumer
electronics across sectors – Mobile, Home entertainment, TV and
Auto • Licensed to handset manufacturers • C#, C++, CF 2.0/3.0, SQL CE, etc. • Slow adopAon by third-‐party
developers – Dominated PC Apps – Complacent working with 3rd parAes
24
RIM BlackBerry • Based on strong legacy of original
BlackBerry • Strength is on server-‐side
integraAon – Exchange Server – Professional Apps and Services
• OS used on their own hardware as well as licensees: – AT&T, HTC, Motorola, Nokia, Qtek,
Samsung, Siemens and Sony Ericsson
• MDS development environment end of life – Apps through Java via Eclipse – Microsoj Visual Studio
• Apps sold through BB Apps store as well as mulAple third parAes
25
Symbian
• Symbian on 50% of current Smartphones
• Symbian FoundaAon (2008) is Nokia, Sony Ericsson, NTT DoCoMo, TI, Vodaphone, ST Ericsson and AT&T
• Legacy tools plus C++ and Java SDKs • 3rd party developers only now being
courted – Sony Ericsson store – Ovi Store
• Follows open source model and will have Eclipse-‐type license in 2010
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Apple iPhone OS • Based on Mac OSX (Linux)
– Released v3.1 – Tight integraAon with iTunes (Win/Mac)
• Strong SDK for third parAes – First to fully release hardware funcAon to
developers • Almost all “lags” are gone
– MMS, cut & paste – Needs be@er Outlook integraAon
• NaAve: “Extensible C”, strong SDK for non-‐programmers
• 100,000 applicaAons – 20% games – New “virtual goods” market – Apps sold through Apps Store as well as
aggregators
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Google Android
• In 2005, Google acquired Android, a small startup based in Palo Alto
• In November 2007 Google announced the Android plaxorm – Open Handset Alliance, now at 30+ members
– Open source plaxorm licensed free of charge to handset manufacturers
– Java-‐based for rapid app development and deployment
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Open Handset Alliance • Companies working together to come
together to accelerate innova4on in mobile and offer consumers a richer, less expensive, and be;er mobile experience
– 10 Mobile Operators – 11 Handset Companies – 14 Semiconductor Companies – 11 Sojware Companies – 6 “CommercializaAon” Companies
• Will own the Android source and make public under Apache v2 license
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App development for phones
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Coding Mobile Apps
• Simple downloads and SMS • Web Apps (in the browser) – Mobile web users surpassed PC users in 2008
– WAP – Java and Flash
• NaAve Apps
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Issues moving web apps to phone
• Small screen • Context switching: lack of windows • NavigaAon and filling in forms • Memory: Lack of JavaScript and cookies • Accessibility for secure communicaAons, flash, pdf, video…
• Variable Speed and response Ames • Web-‐based apps may lack access to hardware resources
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Third-‐party development
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ApplicaAon distribuAon
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Early 2000 Mobile Value Chain
Device Vendor
ApplicaAon Provider Carrier Sales
Channel Customer
Carrier-‐centric: All about gezng the deal with the carrier
35
Carriers as “new media”
• Carriers were looking to: – Be media companies – Control content distribuAon – Get closer (in some cases own) content creaAon
• Ringtone Business – Juniper esAmates $3.2B ww in 2003, 10% of all ww music sales
– By 2008, declined to $1B ww • Gaming Market – Est $6B in 2007 – 90% on-‐deck, 10% off-‐deck and adverAsing
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On-‐deck vs. Off-‐deck
• On-‐deck: – Phones shipped with applicaAons pre-‐loaded – Companies rose and fell with “carrier deals”
• A deal with one or two operators could get you funded, go public, get acquired – Phone.com, Infospace, Jamdat
• Developers benefit from markeAng and promoAon channels • Smaller profits but higher gain.
• Off-‐deck: – Carriers look to sell “add-‐ons” – Advent of alternaAve distribuAon in 2006/7
• Mobile ads from Admob, Nokia, Google, Jumptap • Appstores such as Getjar.com or Handmark.com
– Open doors for mobile startups
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Content Value Chain
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App Stores
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Carrier App Stores Online Today • US Carriers
– AT&T – Verizon – T-‐mobile – all others
• Canadian Carriers – Bell – Rogers – Telus – Sasktel
• Japanese Carriers – NTT DoCoMo – KDDI
• Korean Carriers – SK Telecom (T-‐Store) – KT – LG Telecom
• Chinese Carriers – China Mobile – China Telecom – China Ubicom
• Plus Europe!
41
iTunes: Apple’s App Store
42
App Store
43
• Launched July 2008 • Phenomenally successful – Turned distribuAon on it’s head
– Put developers in direct control
• 125,000 in iPhone Developer Program
• 100,000 applicaAons today, 2B downloads
Apps by Category
44
Loyalty and Churn
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3rd party App Stores Online Today • Phone Manufacturers
– Apple App Store – RIM: BlackBerry App World – Nokia Ovi Store – Palm and Web OS – Samsung ApplicaAon Store (UK, France, Italy only)
• OperaAng Systems – Symbian: Symbian Gear – Window Mobile (Pocket PC vs. SmartPhone Apps) – Google Android
• Android Game Pro (games only) • Androlib (10K apps)
• Third Party App Stores – Handango (Windows and BB) – MobiHand (Windows and BB) – Pocketland (Windows only)
• 3rd party aggregators – AppMiner – Appstore HQ – Appshopper
• InternaAonal
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RIM Blackberry App World • 2,000+ total apps
– 1000 freeware – ASP $5 to $10
• Slow to market – IniAally announced in Nov 2008 – Live on phones April 09
• Requires separate download – Web catalog online Aug 09
• No purchase opAon
• Competes with third-‐party soluAons from Handango and Mobihand
47
Android AndroLib.com
• 14,000 games and applicaAons (counts duplicaAons across mulAple languages)
• 2500 added monthly
• Majority free: 36% paid
• Website features barcodes for phone, scan and buy from phone
48
China App Stores • China Mobile
– 600M total subscribers – “Mobile Market”: 1000 apps for Symbian, Windows Mobile and Android – Working on new Open Mobile System (OMS): Android plus proprietary extensions
• China Telecom – App Store in development – May distribute Palm and Blackberry in future
• China Unicom – 140M total subscribers – App Store in development – Rumored talks with Apple re: iPhone
• Barriers: – Billing issues – Availability of pirated applicaAons online – Low demand
49
Revenue and QualificaAon • Varies by plaxorm:
– BB = Business – Apple = Consumer – Android = Hobbyist -‐> Consumer
• Shared between store and developer – Apple: 30% to store, 70% to developer
• QualificaAon process can vary widely – Carriers, deal required – Apple, strict release policy with “gated qualificaAon” and high barriers
on content types – Android “quality built into the tools” – Third party stores vary but generally “Caveat Emptor”
50
So, you want to market your app?
51
General App Types
• Free – Quick and dirty, usually done for fun or self-‐promoAon
• Short-‐term revenue: i.e. $0.99 – Simple “cute” apps – Simple handy apps – Short term download “spikes” – Supplemented by ads/sponsorships
• Serious Apps: $2.99 to $9.99 – Includes professional and games – Higher uAlity (i.e. social gaming) – Polished and have longevity “sAckiness”
52
Dynamics of Apple’s “Top 25”
• Separate lists for Free and Paid • A lisAng here gets huge response lij
53
Driving Short-‐Term Revenue “Top 25”
• Develop fast, release ojen
• $0.99 is right unless you can jusAfy otherwise
• A nice icon and smooth descripAon
• Self-‐promote: Twi@er, Facebook, etc.
• Partner for success: Gang up with other developers and co-‐promote
• Are blogs important? Opinions differ
Source: TechCrunch 8.29.09
54
Emerging Revenue Models
• “Freemium” – IniAal download is free – Version may run for limited Ame or.. – Pay to upgrade to versions with more features
• “Free to Play” – Micropayments – In-‐game transacAons (open up new stages/worlds) – Virtual goods (avatars, weapons, etc)
• Increasing push toward adverAsing and product placement
55
Trends and Metrics
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Mobile Download Trends • More than 90 percent of Android and iPhone OS users browse and
search for apps directly on their mobile device instead of their computer
• Average downloads: – 10 per month for Android and iPhone – 18 per month for iPod touch iPod touch owners
• Paid apps – Users who regularly download paid apps spend approximately $9 on
an average of five paid downloads per month – iPhone and iPod touch users are twice as likely to purchase paid apps
than Android users. – Upgrading from the lite version was the top reason given when users
were asked what drives them to purchase a paid app
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Average Downloads/month
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“Flight Control” Story
• Flight SimulaAon program by Firemint
• Hit #1 in sales at launch March 28, 2009
• Took approx 3 man-‐weeks to develop (nights, weekends)
• Over 1.5M sold at $0.99 • Word of mouth and blog campaign
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Daily Sales: #1 iPhone App
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Sales per country
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Some hot new areas
• Mobile dev tools • Mobile metrics and moneAzaAon • Mass-‐publishing – Huge “app shops” – Aggregators pushing numbers to gain top 25
• Cross plaxorm – AutomoAve app stores? – Ford has Microsoj Sync – Google flirAng with BMW
62
Where to go for more info…
• General Blogs: – www.mobilecrunch.com – www.venturebeat.com
• Vendor-‐specific Blogs – googlemobile.blogspot.com – androinica.com – theiphoneblog.com
• New Media BC • Wavefront Accelerators • Wireless CommunicaAons Alliance: wca.org
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