Make money from your mobile apps White paper Make money from your mobile apps Make money from your mobile apps Introduction 2 The rise of the smartphone 2 Mobile application complexities 3 The value of the mobile applications market 3 App stores 3 Get the most from your mobile applications 4 Make money from your mobile applications and maximize revenue 6 Increase sales with the best payment experience 7 Measure the results 11 What the future holds for mobile apps 11 Conclusion 12 1 Make money from your mobile apps Introduction Key stats from the Bango apps survey: Mobile applications have become hugely popular with downloads predicted to reach 4 billion this year alone, Bango surveyed a wide range of mobile content rising to 21 billion by 2013. This isn’t surprising when providers and application developers to get their you look at the number of smartphones on the market views and plans for the future – here’s what they and worldwide shipments reported to surpass 390 said: million by 2013, growing at a rate of 20.9% per year.* • 45% of developers plan to monetize their apps directly, in other words outside the The good news for application developers is that as app stores the number of smartphone users increase, so too • 48% think that although app stores will does the demand for a wide range of mobile grow in importance in five years time, applications. The only question that remains is how these channels will coexist alongside the do you take advantage of this opportunity when there mobile web are already so many apps out there and more • iPhone tops the list, followed by Android constantly being developed? and BlackBerry, for the most important handset/platform to develop an app for in This white paper provides an overview of the mobile 2010 applications marketplace and how application • Windows Mobile, Palm and Symbian were developers can capitalize on this opportunity. also listed as important development platforms Here’s what you’ll learn: • Get an overview of the current mobile Find out more at: applications marketplace http://news.bango.com/2010/02/03/life-beyond-the-app-store • Best practices for making the most out of your mobile applications • How to effectively distribute and market your The rise of the smartphone applications In the last few years we have seen a significant shift in • How to make money from your mobile apps the mobile market. While the sales of traditional and maximize revenue phones have been dramatically impacted by global • How the payment experience can affect your recession, handset manufacturers and analyst firms sales have been reporting significant growth in • What the future holds for mobile applications smartphones. At the end of 2009 Gartner reported that Nokia had retained the lead position with around * Stats from Gartner 40% of the smartphone market, RIM in second place with over 20% and Apple close behind with 17%. Another way to look at smartphone growth is by mobile platforms – the operating systems the smartphones use. Given that some handset manufacturer’s ship a range of smartphone platforms 2 Make money from your mobile apps (HTC ships both Windows Mobile and Android The value of the mobile applications phones) this gives an alternative view of the market market with iPhone and Android clearly showing the biggest growth according to Gartner. According to Gartner consumers will spend $6.2 billion in mobile app stores during 2010, comprising of The smartphone market is changing very fast as new 4 billion downloads. But of those, 8 out of 10 apps will handsets are launched monthly. Some recent data be free. There will also be $0.6 billion dollars worth of from comScore shows that Google Android had a big advertising revenues. Gartner forecasts the total growth in the USA between November 2009 and revenue will increase to nearly $30 billion by 2013 February 2010, more than doubling the Google with over 21 billion downloads. The number of free or Android share of the US smartphone market. This ad funded apps will increase to 87%. See dramatic Android growth coincides with a number of http://www.gartner.com/it/page.jsp?id=1282413 for compelling new handsets coming to market from more details. Motorola and HTC and IDC predict Android will be placed second to Symbian in shipments by 2013. There are many contributing factors to the success of the smartphone, simple access to the web and a It’s worth keeping an eye out for the latest smartphone compelling range of downloadable apps being two key trends to help you decide which mobile platforms to factors. Both web usage and app downloads have focus your development efforts on. Android is grown rapidly over the last year. Bango saw over currently the one to look out for. 155% growth in web browsing over the past six months alone. Mobile application complexities Apple now has over 150,000 apps in their app store Unfortunately, it is not as simple as developing for a and IDC predict that there will be over 300,000 iPhone small set of platforms. Each platform has a number of apps and up to 70,000 Android apps by the end of versions. Apple are about to launch iPhone OS 4.0 2010. This presents a compelling value for the and there have been many minor versions to go with consumer, but presents a serious marketing challenge the three previous major revisions. Current Android for developers that need to get their mobile phones are using version 2.1 (Éclair) and version 2.2 applications noticed. (FroYo) is due imminently, although some brand new Android phones still ship with version 1.6 (Donut) and App stores older 1.5 (Cupcake) phones are still available and have not been upgraded. Each version adds new As the interest in mobile applications has grown, so functionality and fixes a number of earlier issues, but has the number of app stores. We now have stores also introduces platform fragmentation making things from platform/OS providers, handset manufacturers more complex for app developers. and mobile network operators – some devices even present consumers with multiple stores. There are around half a dozen proprietary mobile app stores that offer a distribution channel for developers. These provide a controlled and dedicated route to potential customers, in return for a revenue share of 3 Make money from your mobile apps around 30% of the money your customers pay, plus The app store is fast becoming the portal, deck or associated terms and conditions governing what you home page of the smartphone era, a place to go to are permitted to sell, placement of your app in the discover new things. But with multiple stores, all store and permitted pricing models. containing tens of thousands of items, it is a real challenge for the consumer to find the diamonds in the App stores tied to devices include the Android Market, rough. It also poses a challenge for developers – Nokia Ovi Store, BlackBerry App World, Windows which stores to publish in and how to get apps Phone Marketplace and Palm App Catalog. discovered. There are also operator specific app stores, such as App store size – total number of the Vodafone 360 App Store. At Mobile World Congress in February, twenty four operators applications announced that they would join forces to develop an Apple 150,998 open platform that delivers applications to all mobile Android 19,897 phone users. With support of the GSMA the Ovi 6,118 Wholesale Applications Community's stated goal is to BlackBerry 4,756 create a wholesale applications ecosystem that, from Palm 1,452 day one, will establish a simple route to market for Windows 693 developers to deliver the latest innovative applications Average price for all paid apps and services to the widest possible base of customers Apple $3.62 around the world. In the immediate future the alliance BlackBerry $8.26 will seek to unite members' developer communities Android $3.27 and create a single, harmonized point of entry to Ovi $3.47 make it easy for developers to join. The operators Palm $2.53 include América Móvil, AT&T, Bharti Airtel, China Windows $6.99 Mobile, China Unicom, Deutsche Telekom, KT, Mobilkom Austria Group, MTN, NTT DoCoMo, Source: Distimo – www.distimo.com Orange, Orascom Telecom, Softbank Mobile, Telecom Italia, Telefónica, Telenor Group, Get the most from your mobile TeliaSonera, SingTel, SK Telecom, Sprint, Verizon Wireless, VimpelCom, Vodafone and Wind. applications Ultimately the increase in smartphones over the There are also a number of well established third coming years represent a consderable opportunity for party app stores such as GetJar who recently brands and application developers. announced a deal where Sprint would ship links to their app store on certain phones. Here are some best practices to ensure you make the most out of your mobile apps: Some stores tied to devices also control how customers can pay for apps – an iPhone user must Understand your audience have an active iTunes account; Google Checkout is The most important thing is to determine who your preferred for Android app purchases etc. audience is and understand the best ways to reach 4 Make money from your mobile apps Promoting your apps them. You also need to understand what phones they have and how they use them. Don’t rely on app stores alone to market your apps, take promotion into your own hands for maximum Once you have a plan make sure you know what effect. percentage of your market you will reach. There is no • Promote your apps through mobile advertising point spending time and effort on developing an app networks with banner and text ads.