Chapter # 1 Introduction Mobile applications (apps) have been gaining rising popularity dueto the advances in mobile technologies and the large increase in the number of mobile users. Consequently, several app distribution platforms, which provide a new way for developing, downloading, and updating software applications in modern mobile devices, have recently emerged. To better understand the download patterns, popularity trends, and development strategies in this rapidly evolving mobile app ecosystem, we systematically monitored and analyzed four popular third-party Android app marketplaces. Our study focuses on measuring, analyzing, and modeling the app popularity distribution, and explores how pricing and revenue strategies affect app popularity and developers’ income. Our results indicate that unlike web and peer-to-peer file sharing workloads, the app popularity distribution deviates from commonly observed Zipf-like models. We verify that these deviations can be mainly attributed to a new download pattern, to which we refer as the clustering effect. We validate the existence of this effect by revealing a strong temporal affinity of user downloads to app categories. Based on these observations, we propose a new formal clustering model for the distribution of app downloads, and demonstrate that it closely fits measured data. Moreover, we observe that paid apps follow a different popularity distribution than free apps, and show how free apps with an ad-based revenue strategy may result in higher financial benefits than paid apps. We believe that this study can be useful to appstore designers for improving content delivery and recommendation systems, as well as to app developers for selecting proper pricing policies to increase their income. 1.1 What is mobile application ? A mobile application is a software application designed to run on smartphones, tablet computers and other mobile devices. They are usually available through application distribution platforms, which are typically operated by the owner of the mobile operating system, such as the Apple App Store, Google Play, Windows Phone Store, and BlackBerry App World. Some apps are free, while others must be bought by Usually, they are downloaded from the platform to a target device, such as an iPhone, BlackBerry, Android phone or Windows Phone, but sometimes they can be downloaded to laptops or desktops. For apps with a price, generally a percentage, 20-30%, goes to the distribution provider (such as iTunes), and the rest goes to the producer of the app.[1] The term "app" has become popular, and in 2010 was listed as "Word of the Year" by the American Dialect Society.[2] In 2009, technology columnist David Pogue said that newer smartphones could be nicknamed "app phones" to distinguish them from earlier less- sophisticated smartphones.[3] Mobile apps were originally offered for general productivity and information retrieval, including email, calendar, contacts, and stock market and weather information. However, public demand and the availability of developer tools drove rapid expansion into other categories, such as mobile games, factory automation, GPS and location-based services, banking, order-tracking, and ticket purchases. The explosion in number and variety of apps made discovery a challenge, which in turn led to the creation of a wide range of review, recommendation, and curation sources, including blogs, magazines, and dedicated online app-discovery services. The popularity of mobile applications has continued to rise, as their usage has become increasingly prevalent across mobile phone users.[4] A May 2012 comScore study reported that during the previous quarter, more mobile subscribers used apps than browsed the web on their devices: 51.1% vs. 49.8% respectively.[5] Researchers found that usage of mobile applications strongly correlates with user context and depends on user's location and time of the day.[6] According to market research firm Gartner, 102bn apps will be downloaded in 2013 (but 91% of them will be free) but they will still generate $26bn (£16.1bn), up 44.4% on 2012's $18bn.[7] An analyst report estimates that the app economy creates revenues of more than 10 billion Euros per year within the European Union, while over 529 thousand jobs have been created in EU28 states due to the growth of the app market. 1.2 Development Of Mobile Application: Developing application software for mobile devices requires considering the constrains of these devices. Mobile devices run on battery and have less powerful processors than personal computers. Developers also have to consider a lengthy array of screen sizes, hardware specifications and configurations because of intense competition in mobile software and changes within each of the platforms. Mobile application development requires use of specialized integrated development environments made. Mobile applications are first tested within the development environment using emulators and later subjected to field testing. Emulators provide an inexpensive way to test applications on mobile phones to which developers may not have physical access. Chapter # 2 Smartphones A smartphone, or smart phone, is a mobile phone built on a mobile operating system, with more advanced computing capability and connectivity than a feature phone.[1][2][3] The first smartphones combined the functions of a personal digital assistant (PDA) with a mobile phone. Later models added the functionality of portable media players, low-end compact digital cameras, pocket video cameras, and GPS navigation units to form one multi-use device. Many modern smartphones also include high-resolution touchscreens and web browsers that display standard web pages as well as mobile-optimized sites. High-speed data access is provided by Wi- Fi and mobile broadband. In recent years, the rapid development of mobile app markets and of mobile commerce have been drivers of smartphone adoption. The mobile operating systems (OS) used by modern smartphones include Google's Android, Apple's iOS, Nokia's Symbian, Blackberry Ltd's BlackBerry OS, Samsung's Bada, Microsoft's Windows Phone, Hewlett-Packard's webOS, and embedded Linux distributions such as Maemo and MeeGo. Such operating systems can be installed on many different phone models, and typically each device can receive multiple OS software updates over its lifetime. A few other upcoming operating systems are Mozilla's Firefox OS, Canonical Ltd.'s Ubuntu Phone, and Tizen. Worldwide sales of smartphones exceeded those of feature phones in early 2013.[4] As of July 18, 2013, 90 percent of global handset sales are attributed to the purchase of Android and iPhone smartphones. 2.1 Buying Behavior of Operating Systems : Regardless of the demographics based on operating systems, many campaigns use the iPhone as their choice of platform because it has more market awareness because phone and operating system are made by the same company while there are many manufactures for Android devices. Some of the larger manufactures are Samsung, Motorola, and HTC. Android has a higher repurchase rate of its devices than iPhone or BlackBerry (Zokem, 2011). Repurchase rate is relevant to marketers and advertisers because if they want to launch a long term campaign, it is useful to know if users are going to be switching devices for a competing operating system. With 89% of Android users coming back to. Android and 85% of iPhone users going back to iPhone, it shows that these two platforms are solid platforms in consistently keeping consistent users (Zokem, 2011). Apple has higher brand loyalty, around an 84% difference in loyalty compared to Android (Zokem, 2011). BlackBerry is last in brand loyalty compared to the other two with 25% less brand loyalty than Android (Zokem, 2011). The iPhone was the first to enter the market with downloadable mobile applications which could explain the higher brand loyalty. However, Android and BlackBerry are creating similar products such Tablet computers in order to compete with product differentiation. Bottom line is that each of the three key competitors can do similar tasks, the main difference between them are mobile applications. Smartphone Customer Satisfaction by J.D. Power and Associates Manufacturer Score Apple 2010 810 Apple 2011 838 HTC 2010 727 HTC 2011 801 Industry Average 2010 753 Industry Average 2011 788 Samsung 2010 724 Samsung 2011 777 Motorola 2010 N/A Motorola 2011 775 RIM 2010 741 RIM 2011 762 LG 2010 N/A LG 2011 760 HP/Palm 2010 712 HP/Palm 2011 733 Nokia 2010 720 Nokia 2011 721 Rankings are based on a possible top score of 1000 2.2 Applicaton Stores: The introduction of Apple's App Store for the iPhone and iPod Touch in July 2008 popularized manufacturer-hosted online distribution for third-party applications focused on a single platform. Before this, smartphone application distribution was largely dependent on third-party sources providing applications for multiple platforms, such as GetJar, Handango, Handmark, PocketGear, and others. The iPhone's platform is officially restricted to installing apps through the App Store, through "B2B" deployment, and on an "Ad Hoc" basis on up to 100 iPhones. Through jailbreaking it can install apps from other sources. Other platforms may allow application distribution through additional sources outside of their manufacturer-provided app stores, such as third-party app stores and downloads from individual websites. Following the success of Apple's App Store other smartphone manufacturers quickly launched application stores of their own. Google launched the Android Market in October 2008. MiKandi launched the first adult app market for smartphones in 2009. RIM launched its app store, BlackBerry App World, in April 2009. Nokia launched its Ovi Store in May 2009. Palm launched its Palm App Catalog for webOS in June 2009. Microsoft launched an application store for Windows Mobile called Windows Marketplace for Mobile in October 2009, and then a separate Windows Phone Marketplace for Windows Phone in October 2010. Samsung launched Samsung Apps for its Bada based phones in June 2010. Amazon launched its Amazon Appstore for the Google Android operating system in March 2011.