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« Dumbest Move in Smartphone Marketing This Year - Sony Rebrands Xperia Z4 Into Something Less | Main | Tidbits from Smartphone Wars incl some App Store Number Updates »

June 10, 2015




"So last year, how big was the apps economy for smartphones? About 20 Billion dollars (remember we don’t count tablet apps revenues here because tablets are not mobile, they are only ultra-portable devices, that someone else has to study. But apps including tablets would be worth about $25B). So nice growth in revenues, from 7 Billion to 20 Billion about tripling in size over six years. That works out to an average growth rate of 20% per year, which is nice compared to the global economy but not impressive for this mobile industry."

Last year iOS app sales were about 15 Billion and from the numbers Apple has just released at WWDC, iOS app revenues will be about 20 Billion this year. Assuming that Android would be bigger than iOS we would get revenues more than 40 Billion for Android and iOS combined for 2015. Including tablets of course. It will be extremely interesting to see the actual growth rate for apps in 2015.

Tomi T Ahonen

Hi Lullz

haha you're the first who managed all through that long blog with enough energy to still post a comment. Haha, thanks. So yeah. Apps. That iOS number is true exactly to the numbers as I reported. It includes tablet revenue. For mobile ie smartphones, of that 15 Billion about 11 to 12 B were from smartphones the rest iPad revenues. This you think is good? This you think is great? There are a handful of lucky millionaires in the apps racket, who hit the lottery. Like Angry Birds owner Rovio. But thats gaming. The odds of winning in gaming apps is .. same as was with mobile games BEFORE the app store, about one in ten. Its like normal hits businesses, movies, books, music. The REST of apps is hopeless desperate and desolate wilderness with no hope of BREAKING EVEN. I think you've been here long enough to have read my last annual apps economy reality blog with all the apps economy numbers last summer? If not, go read that. I monitor all the numbers as they come in, and all the experts who talk about the industry economics. And the slowly growing consensus is - that the only area where revenues are likely in apps are what it was before the iPhone ie business apps, and gaming, and social media. Nothing else has even emerged as a commercially viable area in seven years of Apple magic which includes the last years of Steve Jobs still alive (god bless his name and all worship the Jobs forever, amen).

There is pitifully weak truly lame growth in apps. Its a tech bubble that will burst. The numbers are so clear now there is no future there (except if you like the odds of launching games, Rovio failed 51 times before Angry Birds). Now. This blog was about SMS. There are no guarantees but if you want to launch services in a new tech area, isn't it most logical to pursue the STRONGEST growth area, rather than the second WEAKEST growth area? I appreciate you have a passion for all things Apple but hey, take it from me, seriously. I did write THE book on apps 13 year ago. There is no money in that pit of despair.

PS don't worry, I will be doing once again the apps economy blog of all the existing public domain numbers and stats and analysis, collected into one place as every year... it will only get worse again, this year. More and more of the big experts are now agreeing with me on the apps hype and peak and bubble.

Would you like to comment on the SMS side of this blog which was like 95% of it haha..

Tomi Ahonen :-)



I did not make it completely through the post, yet. (Are you starting to post full books as single blog posts?).

But I think I get the grist of it.

My question is how you see the difference between SMS and Voice? Because the reach of SMS and Voice are comparable and voice calls are also used for marketing (human as well as robo-calls).

Why aren't we seeing the same "hype" for Voice as for SMS? What is it that makes SMS so much better than Voice. I can think of a lot of factors, but have no way of seeing which are relevant and which are not.

Tomi T Ahonen

Hi Winter

Good question.. Voice still has surprisingly strong opportunities but most of SMS power is that its bidirectional but asynchronous. A voice call has to be immediate (a robocall is just a recording and not thus comparable to SMS) so both parties have to be available. But we can respond to an SMS 'in just a moment' or 'later' (or never). Same for both sides. And obviously its fully digital communications so text messages can be machine=read, rather than trying to do voice recognition accurately across all languages and dialects etc... But yeah, voice will still find plenty of new uses - and very relevantly in Africa and parts of poorest Latin America and Asia, there is the illiteracy issue where SMS won't reach but voice services (even robocalls and recordings such as music, news, advertising etc) can be used.

The India premium voice services 'personalized radio via cellular' is already financially bigger than FM radio. Some markets can do a lot with this, but over time I think voice will go like we've seen, shifting to SMS. That shifts to MMS. That shifts to mobile web. That shifts eventually to video etc... The other direction is not really a viable direction, nobody goes back from SMS to email, from email to fax, from fax to telegraphs haha...

Tomi Ahonen :-)

abdul muis


Great article.

While I agree that SMS beat apps. But comparing SMS to apps is like comparing Grape to Banana. It like saying that Wallmart, Carefour is the retail that made most money, therefore, you shouldn't open a dry cleaning store. SMS (as a provider) is only relevant for Li Ka Shing, Carlos Slim, Son Masayoshi. You're not recommending everyone here to open a carier, don't you?



"Android . . . . . . . . . . . 1,300 million (1.3 B) download Android apps (18% of humans)"

Is it correct that this includes Android tablets? If not, the number seems to be slightly too high. Speaking about Android also implies that tablets are included.

@abdul muis

True. What are the business opportunities for small companies or for those people who can now afford to make an app or two? What kind of SMS business would be possible for those people? Would it be easier for them to go with the apps first?


that was an excellent article as always.
Maybe you could have spent a few words on USSD.

It's not very popular in the west, but serves well in developing countries for scenarios where SMS does not provide sufficient interactivity (mobile banking is the most prominent example).


It sure seems that the message from microsoft to developers is that "Universal Apps" cannot be made to work, even by Microsoft themselves. That's a pretty damming statement to be making to any remaining developers dumb enough to be even thinking of developing for Windows Mobile.

Everyone chant along with me...


This is great for Apple. That means the iPhone is compatible with the largest and most important service for mobile, which should mean that Apple is at little risk to be marginalised by services moving to apps.

Per "wertigon" Ekström

Speaking of the iPhone, the open sourcing of their Swift will lead to quite a few more Apps being developed for iOS. Apple just raised their chances for survival. A bit off topic for this blog post though...



"... by services moving to apps."

I really don't get the app obsession by the iFools.
Apps are a dead end, they present a barrier between a service and its users - something that needs to be installed before use. That's the absolute best way to lose a good percentage of potential customers right out of the gate.

Apps - aside from games and tools - are a classic 'hip' item, that will die as soon as something else can provide the same quality of service with less barriers.

Just look at the state of things on the desktop: Over the last 20 years more and more things have moved to the web. But now on mobile we see this insane reverse trend: Instead of generalizing a service's usability it gets that dreaded platform lock-in again, all fueled by stupid propaganda of the ecosystem providers whose sole agenda is to keep their users inside their walled prison.

Sooner or later this will all crumble.
Let's be clear here: If I see 'Download our app to...' on any website I switch away.


We get it, Tomi. Incorporate SMS and MMS into your marketing campaigns because they are cheap, ubiquitous, and people read them. However, if that's all, then why bother with smart phones at all? A cheap feature phone from 2003 works just as well. @RottenApple, apps are useful at actually using the computing power that we have in our pockets and purses. I don't want the Wall Street Journal sending me texts or MMS every time something happens. I'd rather get notifications from an app where I can read more detail, or turn them off if I'm not in the mood to be interrupted all the time.


At the same time some people are saying how Apps are not really needed for almost anything except games. The same people are insisting how iPhone will fail because it will not get the apps first. This sounds extremely strange.


Apps are not needed for anything. Period. What's needed is a better web standard that can handle those supposed 'advantages' of apps without actually having to install a separate piece of software for each service. And trust me, we'll get there once the app mania subsides.

Apps are merely a stopgap measure for better web implementations, they are not created because those services NEED them but because there's some bogus belief out there that apps were 'better' which of course is utter nonsense. It's funny that most of those services that need an app on mobile are doing perfectly fine with a web interface on desktop PCs so it can't just be that current web standards are too bad.

Over time most apps will gravitate back to the web and be made platform neutral - just like things should be. The economics even of sevice apps are far, far worse than web economics.

To update a web site you rewrite a few scripts, do some in-house testing and upload it to the server.
To update an app you need to have programmers carefully testing it, then submit it to the app store, praying that it'll go through without hiccup, if it doesn't rinse and repeat and behold: 3-4 weeks later your customers will get your upgrade. On a web site it could all be in one day while the web programmers can do other upgrades in the coming weeks.

Those crying for APPS! APPS!! APPS!!! are a small but unfortunately vocal minority who have a vested interest in those platform economics (a.k.a. ecosystems) to be kept stable.

Let's be blunt here: It's not Apps, but CrApps! :D

Agreed, though on the common opinion of SMS/MMS. They are a relic that still generates considerable traffic volume but I have little expectations for their long term viability. Over time, smartphones will become even more like today's PCs and you know what? PCs made do without SMS for how many decades? Of course a lot depends on which part of the world you are in, but at least in the US and Europe things will head elsewhere.


"Apps are a dead end, they present a barrier between a service and its users - something that needs to be installed before use. That's the absolute best way to lose a good percentage of potential customers right out of the gate."

Yes and No. Apps are just one example of the eternal trade-off between local and server computing. That is, how much must be done on the phone because of network bandwidth and latency and how much can be done "in the cloud".

We see this trade-off move back and forth with the economy of the networks. There is no "Best solution".

But Tomi did not say apps are dead. He just tries to explain that you will not get rich from selling apps on an App store. You can still become extremely rich from offering a service by way of an App. See Whatsapp.

Btw, did you (plural) realize that the most valuable aspect of apps is the fact that they can link phone numbers to on-line identities? When you apply for a store card or any other plastic card, you are asked for your phone number. That phone number identifies your spending habits to a person and then links these spending habits to your on-line identity on Facebook, Twitter etc.. Big corporations buy these store card data and link them to your online identity so they know what ads they should serve you.

Now you know why Facebook paid $22B for Whatsapp. And you know why these companies will insist on their own apps. You cannot extract a phone number from a website visit.

Tomi T Ahonen

Great discussion, thanks guys!

abdul - very valid point about apples and grapes. They are different. I have been saying if you like to do games, apps are a wonderful platform for you. Also if you are not concerned about making money on the app but rather, want it to solve some problem with some other tech your car, your home, your hotel, whatnot, the mobile phone is as Ajit Jaokar famously said, like a magic wand, and for those kinds of uses, apps are great. Apps are a far easier way to win a creative industry award in advertising or media etc, than SMS is. I am not here to talk about obscure uses, and gaming is only a very tiny slice of the overall mobile industry so I give it that relevant focus of about one or two blog articles per year. Beyond that, apps are pretty hopeless. And I still do the apps economy blog once per year.

Now, if you're a student and want to just enhance your CV to get a job, and you are a capable programmer, why not create an app and then put it up for the app stores to maybe make you some dollars. Now the app is actually a CV enhancement for an individual, not a mass media vehicle, even if it gets some tens of thousands of downloads in its first year. That is also great and mobile has again reduced that threshold of what it takes to get into the IT industry. And it works in any country. But thats not a MASS MEDIA.

As a mass media, apps are a hopeless proposition (excluding games where they are equally bad to other gaming platforms). But SMS is the STRONGEST media proposition in mobile. MMS is second best, HTML is third best but in poorest parts of the world, WAP is better than HTML. In some regions USSD is relevant (thanks Chithanh for reminding us) and also most regions voice services. There will be some exceptions, Facebook, Uber.. but that is really a lottery if you want to do that, and launching something like Uber could have been done just as easily on HTML but with a vastly larger addressable market.

But I do not disagree with you that these are separate opportunities and should be examined separately. This blog was about SMS, mentioning apps. I will of course write later my once-per-year story about apps (which will mention SMS you can be sure, as I have every time before).

Lullz - no, that is only smartphones but it is yes, an inflated number because with Android the forked Android paths are mostly not comparable and not part of the true ecosystem as an addressable media. You may have been thinking of that number. But yes, we're at 1.7B Android phones in use and if we say 25% don't download any apps, theoretically the maximum addressable market for Android smartphone users who might download an app from some related app store is 1.3B

Chithanh - thanks. I had a few USSD examples in an earlier draft of the story but left them out as this blog article just ballooned and ballooned into too many words. I have to do USSD at some point separately.

Maggan - of 'services moving to apps' it is actually the other way. Almost universally, when companies have gotten serious about mobile they notice that their mobile web - HTML - version outperforms the apps version BY REACH - and their SMS/MMS outperform both by reach and usage. Heaviest users will appreciate their apps and use them a lot. But those uses - not users, uses - in many cases are very 'peaky'. The measurement tools of the Home Depot app for example, that allow quick measurement of screw sizes, are used heavily when the homeowner has his/her few weeks of home reconstruction at the summer break or builds say an extension to the garage. Then that app is never used on that phone again, while it got a lot of use for two weeks. That is typical. The travel app, (for non-frequent fliers) is used once when planning the family vacation, and the next time it is used... is next year. Lots of apps get this kind of usage. Anyway, HTML gives one interface to get EVERY smartphone and half of dumbphones on the planet, 90% of all phones in the USA and 95% of all phones in Europe (100% in Singapore, Australia, UAE, Hong Kong etc). So HTML reaches more, does't need the various versions, and is FAR cheaper to build.

Then comes the update, for the next phone, do we need to go find that app again and download it. All this is unnecessary barriers to use, because in almost all cases, that company ALSO maintains a good website that offers the same experience. So most branded apps are finding disappointing use, but their parallel HTML versions surprisingly strong usage. And SMS and MMS by far the strongest. I was just talking again today with one colleage who remarked on this blog and said, Tomi you are right on the blog, we see this with our apps and SMS, the SMS versions get huge usage the apps minimal. What happens next? Its obvious, the emphasis goes to the HTML, SMS and MMS versions - the apps get ignored, not updated, become zombies. At least 80% of all apps in the app stores are already zombies.

THEN comes mobile-first for HTML. Now we go from that silly idea of responsive design and go native (or adaptive). As companies go to HTML pages that are designed from the ground-up to be mobile-first, in fact, go to a WEB principle that is mobile-first, then the mobile experience vastly improves, the customers stay longer, engage more and buy more. And the distinction between the disappointing but expensive series of apps vs the mobile web, becomes ever stronger in favor of HTML. Now, the one fly in this oitment is the measurement of apps usage in time. Because apps usage includes gaming - most apps based games have no HTML equivalent even - that distorts the numbers - giving an illusion that 'all apps' have heavy usage. I am hoping to include insights into this in my next iteration of the apps economy/myth blog article later this summer/fall. But yeah. The direction is starting to be the opposite direction, from apps to services. The iPhone App Store was a great wakeup for non-technology brands and companies to come to mobile but the apps are not the way to go. They will sooner or later discover HTML, SMS and MMS. And only then they will find their mobile strategy 'succeeding'. (Except if you're Angry Birds or Facebook)

Ok, will post this, more coming

Tomi Ahonen :-)

Tomi T Ahonen


(I removed a few comments again that had clearly not read the article)

Rotten - excellent point, thanks. Yeah this is a temporary phenomenon. For games and enterprise solutions, apps have a place. Those existed long before the iPhone and App Store and will continue. A few exceptions will emerge. But as an 'opportunity' apps are already a hopeless space. For most companies who took that knee-jerk reaction of 'hey we need a mobile strategy, lets create a cool iPhone app' - that time has passed and they will quietly retire that app in coming years while building their HTML version, supported with SMS and MMS. We are well past the tipping point on this already and on the 'better side' where the reality exists.

Catriona - hey, I said clearly that this is the start, after SMS come stronger ways to bring value to consumers, audiences, voters, patients, etc. It starts on SMS (today). Next after you have your SMS you add MMS (this is also today). After MMS it depends which market you are in, the industrialized world you do HTML, in the poorer parts of the world you do WAP. Thats it. Nothing else is mass market. You can do voice but as a media thats only really the emerging world. USSD is only a part of the emerging world. Apps are not a mass market anywhere, not even Singapore or UAE or Hong Kong where over 90% of phones in use are smartphones. After HTML the likely next step is video but QR codes, NFC and Augmented Reality are all strong candidates, we'll see, in GAMING you can do apps. Enterprise use you can do apps. Facebook? Comes preloaded on most smartphones right out of the box so it doesn't behave like an app you have to discover and buy, it behaves like a pre-installed feature (the optimal state to achieve, obviously, shows the power of FB).

As to SMS/MMS vs app for news. I quoted you the numbers from France (smartphone ownership roughly on par with USA, a laggard market of Europe). 20% use news via an app, 54% consume news via SMS/MMS. Which is the place to start if your newspaper has not yet gone mobile? Duh. I have NOTHING against doing apps AFTER you reach your mass market. Finnair, the example I wrote about in the Big Data blog, started with SMS but it does absolutely everything. It understands customer relations. If you want Finnair via QR code, you got it. If you want Finnair only via SMS/MMS you got it. If you want Finnair via voice IVR (are blind for example, remember this is Finland, very very oriented to inclusion) yes, you can do via IVR. If you want it via WAP? Yes. Via HTML? Yes (native design). If you want via an app? Yes. But how do they SELL those upgrades to business class? Because EVERY registered mobile user can be reached with SMS, they sell those with SMS. This is my point. Even if you have an app, you can ENHANCE it with SMS. Even if you already have your SMS, and want to launch your app - you can send the direct URL weblink to download the app - via MMS. This is what I mean. Mobile-first STARTS with SMS. I didn't say it ENDS with SMS.

Lullz - good observation (the contradiction). If you remember how I have been arguing this, I have always singled out games in apps (as the area of success). I also, if you remember, when discussing the Mac/Windows analogy have pointed out that the biggest area where Macs were always behind in PC era apps, were games. This will partly be the driver, when gamers see that cool games only exist on Android, then youth will start to desert the iPhones, as on usability, style, features, the differences between the top iPhone and top Android rivals is diminishing. For me, gaming is utterly irrelevant (I was once addicted to gaming and stopped cold turkey, come to think of it, thats just over 2 decades ago. For 20 years I've been clean! Yippee!! gosh I miss my gaming though...) and I would not lose one second of decision time on 'does it support my fave games' but equally, that is the PRIMARY criterion for may teenagers boys and girls. And no doubt, many youg adults too.

But good catch haha... Gosh you guys really do READ this stuff I write... :-)

Rotten - on the SMS/MMS argument you made. Did you mean to post that as just a 'commonly held view' that you yourself do not agree with (relic, traffic but not viable) or do you also agree with that view? I won't waste commenting if you don't hold that view, I do agree, there is a lot of that view around but it is slowly changing for the better, as SMS and MMS will reach a larger audience than HTML for at least several more years, likely close to 2020 before HTML reach matches SMS and MMS.

Winter - brilliant points and thanks for yes good reminder on the apps themselves. but yes, totally agree the ultimate power is the mobile phone number (which leads us once again to the Big Data blog from last month). On this local computing and distributed computing pendulum, excellent point and it swings kind of naturally between Moore's Law and upgraded network speeds, where the 'sweet spot' happens to be. What I don't like is the overhyping of any one area, like recently apps where I think clearly the economic opportunity is not. Some chances yes, and there will also be swings back and forth. But good analogy yes and its part of that pattern which goes back far into tech history haha.

Ok, great stuff, please keep the discussion going and if any of you have seen or found good SMS/MMS examples that I have not mentioned, please do contribute. I am so sick and tired of posting this same article every two years or so, I won't come back to this topic now for a long time again, but I would LOVE to hear of any ideas any of you have heard or seen or read about. You know that as a service, I love them (SMS and MMS) and as a business story. I just hate repeating myself haha so I don't like rewriting old stuff... :-)

Tomi Ahonen :-)

abdul muis


"But yes, we're at 1.7B Android phones in use and if we say 25% don't download any apps"

Just FYI,
Google say there were billions (1B+) android phone/user that access google play store occasionally.


There is a very interesting talk by Mikko Hypponen that explains how the link between off-line and on-line world with phone numbers works.
(this links brings you to the time where he talks about targeted ads)

The talk was given at re:publica 15:

Both the complete talk by Mikko and the conference are extremely interesting.

abdul muis


Thx you. Nice video.
I still wondering if the fall of symbian has something to do with .....

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