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« First Time Ever Anywhere: International Data on Smartphone Unique Owner Installed Base - Including regional smartphone ownership analysis | Main | Enter The iFlop, What Will Be Seen as First Apple Failure After Steve Jobs - But the first edition Apple Watch will of course sell massively to iSheep »

August 27, 2014

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Tomi T Ahonen

Hi Mark Wilcox

Thank you for visiting the site and thank you for your excellent app developer survey that you kindly release so much stats on with Vision Mobile. As you can see, one whole section of the above analysis is just based on that survey.

I totally understand your point that we can examine the total app developer community and remove those who are hobbyists or doing an app 'for fun' or for let say its 'artistic' or day 'humanitarian' (non-profit) purpose without attempting to make money out of it (like my blog here, is not an attempt to monetize my writing, I do quite ok on my book writing and consulting, so this is a hobby). And you do make it very clear in you stats that you have calculated some of the data you publish with that very specific clarification, this is data 'of those who attempted to make money' roughly was what you wrote in the public data. If I remember correctly, even of those who try to make money, by your survey 24% were unable to make any money from it...

But my blog was explicitly to present at one place all the global data, not focusing on that part who try to make money, but all app developers, just like I include all smartphone apps (smarpthone and tablet, enterprise and consumer etc). It would be quite a chore for many who are not very strong with statistical tools, to calculate out the total app developer community and get the 'total' percentages from your tables - while that can be done of course (as I did). So partly I wanted to do this as a service to my readers so they don't have to do the math. But partly it is also to give the full big picture.

Let me illustrate by example. The unemployment statistics include people who may while unemployed try to do something productive like say write that novel that the laid-off journalist might now attempt, or try a career in painting as a former US president is now doing haha... That doesn't mean we stop counting them as unemployed. (I was kidding with Bush, he is obviously retired and collects a pension). But you get my point. The motivation of the app developers is not the point in the aggregate global numbers. The total number is the point. Yes, some may not care not to earn money but they are in the total. That is true of employed people too - some have a trust fund and go to work more out of a passion for a given job than caring about receiving an explicit paycheck. We don't eliminate them from labor statistics either.

As to the other sources of revenues you mention. Yes, they too exist. And when we get good enough numbers for those, I will start to report on those too. But I am VERY convinced that it is a short-term illusionary opportunity that soon will die out. Most of those companies who now develop an iPhone app, do so simply because its a knee-jerk reaction to 'we need a mobile strategy'. Once the brands who fund these projects notice that most apps don't get discovered or downloaded and most such apps are used once and not again, they will explore other ways to connect with consumers (SMS, Premium SMS, MMS, mobile web, QR codes, NFC, etc) and will increasingly stop updating their old app that had no real use. The huge brands will be different, the airlines, banks, train operators, some huge consumer brands. Thats 2% of the brands that advertise. The rest who pursued apps will be utterly disappointed and this current 'bonanza' for app developers to go sell their services to Local Locksmiths Inc or Mom's Famous Pizza Co will soon find that revenue stream ending. It is a marginal opportunity only, today, and is disproportionately a US phenomenon that the rest of the world has already matured beyond it.

As to your last point, you are correct, in this blog I did not present stats on what are odds on premium SMS or MMS or mobile web. I didnt do that because I've done it many times before. The mobile services industry, as said by many industry veterans for many years not just me, is another 'hits business' like books, music, movies etc, so the general odds are 1 in 10 will be a hit. Thats true of ringing tones, of SMS games, of MMS news services, etc etc etc. So their success rate is almost 10x better than the horrid chances in app store apps.

Thank you for writing. I will add a comment into the article that you have a partial dispute here in the comments to bring readers to it. Thank you for commenting and please accept my thanks on behalf of all of us in the industry for being so generous with your massive app developer survey data. You are doing a huge service to the industry!

Tomi Ahonen :-)

Moi

Hi Tomi, great numbers to see all together!

But there might be a typo/computation error in the table "SMARTPHONE APP REVENUES 2013".

App store income: 17.5
Commission 30% : 5.3
Paid out to developers: 12.3. But 17.5 - 5.3 = 12.2.
Or is this a rounding thing? Or not even a substraction? :)

And what would be great for next time is to see last time's statistics beside it in the tables. Because I do know the numbers (median + average) changed from last time (your 2010 article)! And yes of course in a negative way.

For the rest keep up these great posts!

KK

Tomi - it is 2014 and you are still pushing your favorite service "SMS". It reminds me of my previous employer - Nokia - stuck in the past, living on old glories and unable to look ahead.
There is no doubt that SMS is still vastly popular and provides a great monetization opportunity and that many different services can be built on top of SMS. No one is dis-agreeing with that. But the world does not end there. There are a hundred different types of apps - productivity, games, mapping, VR, travel related apps etc etc, which require functionality that cannot be fully satisfied with just SMS. The world has moved on - I request you to do the same.

Regarding Mobile Web vs Apps - that is a legitimate debate. Firefox OS has been pushing web apps for a few years now. But apps are not just about a development environment. The app store is a monetization and merchandizing vehicle. If you look at Firefox OS, even they have an app store to enable discovery of apps and monetization. From an purely development perspective - there are some ( an a decreasing number) of use cases, where web apps simply do not have the API to the lower layers of the OS to support the required performance. The WebAPI are developing to close this gap - but they are not there yet.

In addition - if you look at the a very significant percentage of android and iOS apps, they are actually native containers, which enclose the WebFrame. Basically they are webapps enclosed within a native frame - to support app store functionality.

Developers are a pragmatic bunch. They will find the best way to make their products given the functionality available. I do not dis-agree that there is a "buzz" around apps and many apps are simply superfluous.

However, let us talk about actual methodologies to improve these. Otherwise this blog is going to become a dinosaur, touting symbian, SMS, Nokia and other past glories

AndThisWillBeToo

Where are all the paid Microsoft astroturfers?
Microsoft announced 3 new phones and a SW update a bit shy of 24 hours ago and they're not here to tell us how THIS TIME Microsoft is going to rule mobile as they bundled free Skype time to those phones.

AppleTurfer

@AndThisWillBeToo - Msft got money from me voluntarily for the first time in many years last week. My sister wanted Office, and I looked into Office365 and they have a great deal. For $99/year you get 5 licenses of Office for PC's/Macs, 5 licenses for tablets/phones, Office365 Live (Msft's answer to google Docs) and 1tb for each of the 5 accounts. So 5 TERABYTES of cloud storage.

For the price of dropbox alone, you get dropbox, evernote, google apps and 5 licenses of Office for PC and devices thrown in free. Only it's OneDrive, OneNote, Office365 for the online portions.

My kids are VERY happy as they have long complained about not having "real office" which the schools use. I've made them use Open Office as it's "good enough". But it's not really, not when PowerPoint is one of the main tools and the OO presentation tool isn't nearly as nice.

I don't see myself getting a Msft phone any time soon. But then again, I didn't expect I'd be willing to pay for Office either. And being happy to do so and it being a good value.

adi purbakala

@applesurfer

School change to google doc now. What school you kid go to still use 'real' office? Maybe you should move you kid to better school.

AppleTurfer

I loved Google docs when they had no competition. Quick, easy, team editing, free. Having used them in business for a year now, I'm less enthused. Making a doc look good enough to send to a client - not so much.

Office365 is a nice online subset of Word. The only thing I hated about Office was the price. I think they clearly have the superior product and have for a long long time. OpenOffice Writer is a decent substitute, but Excel and PowerPoint have no peer in my book for those who use more than the basics. Plus Access, Publisher and OneNote are all nice.

Outlook I like on windows and tolerate on the Mac.

I am truly pleased to pay the $99 and get all of that for the price of dropbox alone.

AppleTurfer

Are you all ready for the big reveal mere days away? Vertical integration super company verses the constellation of commodity phone assemblers. Apple up to bat

adi purbakala

@applepr

From a company have 2 years hole create nude leak sensation? No thanks. I do not want my nude photo unsave in the hand of stupid company.

AppleTurfer

As we eagerly await the unveiling...couple thoughts.

If Apple does support payments on NFC, many of you will crow about how Apple is copying others. I will grant that Apple is rarely first with anything. However, by end of year, more NFC payments will have been processed on NFC on the iPhone than the totality of NFC world wide to date. You'll see that Apple isn't about to just add a feature, they will have built the partnerships to make the feature available, accessible and desirable for their customers and partners.

If Apple comes out with a watch/wearable - it will look like nothing on the market, be positioned like nothing on the market. By early next year EVERY watch will look like and be positioned like the iWatch. Apple is not going to be first, but by end of year Apple will be number one with the most supported ecosystem. Then over the next year or two Apple will cease being number one as Samscum and others copy the look and positioning of their wearables and offer them for cheaper.

Watch and learn about Apple. They are not going to be striving to increase the iPhone's marketshare of the total smartphone market. They are going to come out with more reasons to pay the premium for an iPhone for the most profitable of customers to reach. iWatch, payments, health kit, car kit -- these are not efforts to make money in themselves. They are more reason and incentives to choose iPhones for the most profitable customers to have.

Apple has about 50% share of the "premium" smartphone market. They are going after Samsung to take another 15-25% of THAT market. With the growth in the low end -- the result will still be a fall in overall smartphone market share which is unimportant to Apple. They will grow in the market they are aiming for and make more profits than ever. Considerably more.

AppleTurfer

Apple failed. You heard it from me. Apple failed to provide me a reason to pay $350 (or far more) to reduce the pain of taking my phone out of my pocket. I didn't think anyone could proved a compelling reason for a smartwatch, but I thought that if ANYONE could, it would be Apple.

I think Apple came out with an amazing product far better than any of the others (looking at you Scamscum). I would love to have one, but not for $350

frederick tubiermont

This is why I believe in a post-appstores era, much more profitable for indie developers #goweb #noappstores
This is what I wrote about it: https://medium.com/@adsy_me/welcome-to-the-post-appstores-era-dc324de2e589
and our take on the subject: http://adsy.me, a mobile web app to create mobile web apps ;-) Early days, exciting times ahead.

Tomi T Ahonen

Lullz

I removed your comment because it clearly reflected the fact that you hadn't READ the blog where that issue is already covered. I never let my readers waste their time reading comments from anyone who didn't bother to read the blog article itself. That is a total waste of time for my loyal readers. Sorry. Read the blog, think what I said there, if you still feel you want to contribute but feel the need to disagree - then illustrate in your comment that you read my point, you understood it, and because of this statistic or that fact or this argument, your point of view is a valid contribution. You can't just arrive here to post random thought that don't connect to the discussion.

Tomi Ahonen :-)

tuuve

I have figured out the issue why some people are not agreeing with your opinion about the app economy.

"like so-called ‘hits businesses’ like books, pop music, movies and videogames - where roughly 1 in 10 titles is a hit"

You are comparing the authors (app developers) to the publishers (book publishing companies) and this is the reason why people find it hard to agree with you.

With apps the vast majority developers are also a self-publisher or is at least publishing only software made in-house. With books this is not the case and those doing self-publishing are not considered publishers.

To correct this you should compare either book authors to app developers or book publishing houses to app developers who are mostly releasing software made by someone else.

Casquette Snapback

I loved Google docs when they had no competition. Quick, easy, team editing, free. Having used them in business for a year now, I'm less enthused.

ihimobileapps

IHI Mobiles Apps Specialize in cross platform mobile apps that are affordable to small businesses and start ups – enabling you to keep you in touch with your customers and generate more business

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    Tomi Ahonen is a bestselling author whose twelve books on mobile have already been referenced in over 100 books by his peers. Rated the most influential expert in mobile by Forbes in December 2011, Tomi speaks regularly at conferences doing about 20 public speakerships annually. With over 250 public speaking engagements, Tomi been seen by a cumulative audience of over 100,000 people on all six inhabited continents. The former Nokia executive has run a consulting practise on digital convergence, interactive media, engagement marketing, high tech and next generation mobile. Tomi is currently based out of Helsinki but supports Fortune 500 sized companies across the globe. His reference client list includes Axiata, Bank of America, BBC, BNP Paribas, China Mobile, Emap, Ericsson, Google, Hewlett-Packard, HSBC, IBM, Intel, LG, MTS, Nokia, NTT DoCoMo, Ogilvy, Orange, RIM, Sanomamedia, Telenor, TeliaSonera, Three, Tigo, Vodafone, etc. To see his full bio and his books, visit www.tomiahonen.com Tomi Ahonen lectures at Oxford University's short courses on next generation mobile and digital convergence. Follow him on Twitter as @tomiahonen. Tomi also has a Facebook and Linked In page under his own name. He is available for consulting, speaking engagements and as expert witness, please write to tomi (at) tomiahonen (dot) com

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