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Can the app stores sustain 5.5 million developers?

5.5 million developers

In our latest report, App Economy Forecasts 2015 – 2017, we estimate the number of mobile ecosystem in 2014 at 5.5 million developers. Demand for mobile development skills has never been higher and yet revenue from app store sales cannot possibly pay their salaries. Luckily they don’t have to as developers aren’t all building apps full time and there are several other revenue sources in the app economy, some of them comparable with or even significantly larger than the app stores.

Βlueprint of the app economy preview 4

Estimating the developer population

Counting mobile developers is hard. A lot of software developers look into mobile platforms and a lot of people are curious enough about how they’d make an app for their phones that they’ll try to find out. We can’t meaningfully count all of these as mobile developers. However, we also know from our Developer Economics surveys that a huge percentage of developers creating the apps that fill the app stores are not full-time professionals. Popular programming Q&A site StackOverflow has around 35 million unique visitors and it is only an English speaking community. That probably includes a lot of students trying to get help with their coursework. Meanwhile bottom up estimates for the global professional developer population based on job classification data from multiple sources are just under 20 million. This is highly error-prone due to the way developers are classified along with other IT professionals in many places around the world. How many of those are really building mobile apps anyway? Apple has over 9 million developers registered on their developer portal. Some of those are for Mac and Safari but the majority are iOS developers. Then again, the number of developer accounts with any apps published on the App Store for iOS is only around 350,000. Google Play has fewer active publishers than iOS. The truth must lie somewhere between these extremes.

For the purposes of our estimate we decided to count developers who are actively building, or planning to build in the very near future, publishable apps for a mobile platform. Students building toy apps to learn and hobbyists who only build things for themselves aren’t taken into account. Those people could join the ranks of mobile developers in the near future but they aren’t doing anything to satisfy mobile app demand yet. 5.5 million is the number of developers required to maintain all of the published apps that have been updated in the last 12 months, plus build all of the new ones released in the same period. In our report we also forecast the number of new and updated apps going forward and the number of developers required to sustain that app growth through 2017.

Keeping the pizza and coffee flowing

Developers are in high demand and as employees in the US they will typically earn upwards of $100k per year with relatively little experience. Proven talent in Silicon Valley can easily earn 50-100% more. Salaries in Western Europe are not quite as eye-catching but not that far behind either. In countries where the cost of living is much lower, developer salaries are obviously more modest but actually often a greater multiple of the national average wage.

Why would anyone with such earning potential build and sell apps that are likely to produce a poor return on their time. There are several answers:

  • Some apps make fantastic returns and some developers believe, or at least hope, they could emulate those and use their skills to make a small fortune
  • Other developers are trying to build small but sustainable businesses on the app stores, targeting niches and working as artists and entrepreneurs
  • Some developers build their own apps as proof of their abilities in order to sell their skills for a higher rate on contract development work
  • Many developers just love to code and already earn a full time salary in their day job, they build apps as side projects or for a hobby, either for fun, a little extra income or to sharpen their skills for their next career move
  • Some developers are purely learning and having fun, usually either at the beginning of their careers and in some cases after they’ve retired.

Note that only the first two of these are depending on the apps for income. Of course not all developers are trying to make a return from apps via paid downloads or in-app purchases. Advertising is also a big source of revenue in the app economy, although most of it goes to a few giant corporations. The typical developer monetising through ads does much worse than those using in-app purchases, so that’s not the answer. However, there are other models where developers have better odds of making money. Subscriptions are the fastest growing revenue opportunity according to our forecasts, although for pure Software as a Service rather than content subscriptions that will mostly be selling to enterprises. The biggest revenue opportunity of all in app economy over the next few years is definitely not in pure software businesses. Indeed, it’s the rather old-fashioned business of selling real physical things! Find out just how big it is by purchasing our latest report.

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Business Community Tips

Test Early, Test Often, Test on Everything?

Bugs Everywhere

Testing any mobile app presents a wide range of challenges. The often repeated but rarely followed software best practice of test early, test often is harder to adhere to than usual due to the fragmentation of the target environment and the relative maturity of tools. The increased acceptance of apps by mainstream consumers and intense competition have raised the bars for user experience and quality. There is more to test than ever, yet often very limited budget for doing so. Fortunately every challenge presents an opportunity and a vast array of tools vendors are racing to fill the gaps.

What to test?

Much of the traditional software testing literature focuses on various forms of functional testing – ensuring the system does what it’s meant to do. With a strong trend towards simpler, single purpose apps, this is often the easiest thing to verify in a mobile app project. There is now a much stronger focus on the user experience and this requires testing of an entirely different nature. The most effective way to test that an app is easy (or even fun) to use is to get feedback from real users. Doing that and finding major issues after the app has been built is a very expensive mistake to make, so most developers and designers will want to create mock-ups or prototypes for early feedback. There’s a wide range of tools to help with this task from simple wireframing through to full interactive prototyping. Given the importance of animations within mobile apps to enable users to discover interface interactions and learn to navigate, more complete prototypes are becoming increasingly desirable. As users become more sophisticated and specialist tools reduce the time and effort required to create interactive prototypes this trend is likely to continue.

With the majority of app store revenues coming through in-app purchases, another more specialized form of testing the design of an app is becoming increasingly important – split testing. On the desktop web, tools for trying out design and copy variants to optimize sites for specific user behaviours are very mature and the best of them can be used by staff with no development skills. In the mobile world most of the tools in this space are still very immature and developer-focussed. The responsive design trend on the web and the more restricted deployment options for native apps make this a more challenging problem for mobile devices but we expect the tools in this sector to mature rapidly.

[sectors slugs=’prototyping-mockup’]

When to test?

The earlier you find problems with software, the cheaper it is to fix them. As such, it makes sense to start testing as early as possible. How about testing the idea for the app via a mobile market research service before you even create your first wireframes? It’s worth considering – if you can’t generate interest in your app idea with a simple pitch it’s not going to be easy to get people to download it from the store either.

For most apps (particularly native apps) it’ll be worth using one of the mock-up or prototyping tools mentioned above and test the design before you start coding the real app. It’s much cheaper to iterate a simple design prototype than a native app. However, you’ll still want to try out the actual app with real users before you launch it. To help with that there’s a range of beta testing services that can help you distribute your beta app and find and/or manage testers. There are also services to help you get feedback from your users before and after the app launches. Providing a highly accessible feedback channel for users in the app is your best hope for preventing the inevitable disgruntled few from leaving bad reviews.

Ideally an app will be developed and tested iteratively with functional testing of new features and full regression tests for the existing functionality run for each iteration. This level of testing can get extremely expensive and time consuming unless it is automated. Fortunately there are several tools, open source frameworks and third party services that can help out there too.

[sectors slugs=’beta-testing,feedback-helpdesk,automated-app-testing’]

Where to test?

Another major problem for mobile developers is the scale and fragmentation of the market they’re trying to serve. Collecting a full library of test devices with major firmware variants is way beyond the budget of most developers, let alone the effort that would be required to test manually on all of them. Automated testing solutions can help here also and some services provide access to a large set of devices for remote testing too. However, it’s simply not feasible for most developers to test every version of their apps on all the device and firmware combinations they support. This limitation means some bugs are almost guaranteed to escape into the wild; the important thing then becomes how quickly you discover and fix them. For this reason, crash analytics and bug tracking tools are becoming increasingly important. Another useful weapon in this battle is your usage analytics data – it can enable you to focus testing on the devices which are most popular amongst your user base and also spot changes in use on particular device models that might signal a non-fatal error that’s causing users to abandon the app.

Finally, for some apps, where they are tested geographically may also be important. Do you know what the performance of your app is like for users who are far from your servers? If you use SMS, do you know how long it takes to get to users on different networks around the world (or if it even gets there). Have the localisations for your app been tested by native speakers? Our automated testing and app certification sectors include companies that can crowdsource beta testers or provide access software testing professionals almost anywhere in the world to help you scale globally without leaving your desk.

[sectors slugs=’crash-analytics-bug-tracking,user-analytics,automated-app-testing,app-certification’]

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Business Community

The state of App Search Optimization (ASO)

The reason why ASO is getting so much attention right now is because in today’s charts-driven app stores 10% of apps gets 90% of downloads. For developers, the only effective mechanism to catch attention is buying large amounts of app installs to catapult their app into the top 25 charts where people look for inspiration. But this approach has become very expensive as app install prices soar.

Indie developers who have limited resources struggle to compete and get their app in front of users’ eyes. At XYO, our goal is to change this and enable long-tail app discovery by helping users discover what they want even though they can’t express it. To build our site XYO.net we looked into search behavior to understand how people find apps. What we learned is that the majority of users has no real concept of how to search for apps and no idea about the vast supply of great apps out there, because they can’t see them.

The Super Early Days of ASO - A SImple Model To Compare SEO and ASO

To optimize for search it’s important to understand how users are searching. On the web, there is SEO as a proven tool for which countless SEO companies provide rich insights, and tracking success is easy. For mobile apps however, it’s mostly guesswork. “These are the super early days of ASO”, said Tomasz Kolinko founder of ASO specialist Appcod.es. App Store Optimization (ASO) at the moment boils down to optimizing a list of keywords for queries that users are likely to type.

So how do users search? Based on our data on XYO.net and by looking at the publicly available studies by Chomp (acquired by Apple last year), we have identified four types of users in app search.

Our main findings conclude that app search is dominated by vaguely expressed intents and very generic queries. Users are inexperienced in how to find apps and have difficulties navigating cluttered app stores.

80% of user searches are generic category or interest searches

XYO Insights - types of search queries

Most app searches happen with only a generally expressed intent. The majority of users (around 75%-80%) type general app categories into the search box. Examples of such categories are ‘social networking’, ‘education’ or ‘racing games’. Our findings are consistent with what app search company Chomp was publishing in its Monthly App Search Analytics study.

Around 10%-15% of all search queries look for simple inspiration: These users either type ‘games’ or ‘apps’ into the search box or add adjectives like ‘new’, ‘free’ or ‘fun’. Examples of such queries are: ‘addictive games’, ‘fun games’, ‘free apps’, ‘new apps’.

Only 5% of all users seek specific app brands or titles. Our data and other sources indicate that while some users are aware of mainstream brands like Angry Birds or Facebook, other mobile brands are mostly unknown.

For apps there is another category: functional app searches where the query describes what the user wishes to achieve. Examples of such searches are ‘crop photos’, ‘block calls’, ‘view movies’. Those functional queries are super important for classic web-based SEO – in mobile app search they are marginal at around 5% of searches.

Image: http://www.flickr.com/photos/jurvetson/5314774452/
Image: http://www.flickr.com/photos/jurvetson/5314774452/

Optimizing search for users who don’t know how to search

App Store search is based on app title and a keyword list. For Google Play the app description also counts, which opens up more opportunities for developers to add seasonal or trending keywords (e.g. ‘easter’ or ‘gangnam style’).

In general, it’s advised to use a keyword tool such as appcod.es, MobileDevHQ, SearchMan , and appnique.com. These tools give an idea of keywords competitors are using and where the sweet spot of high search volume and low competition lies for a specific app.

[sectors slugs=’app-store-optimization’]

“Longer phrases are 70% of search volume on the web (indicator), they’re less competitive, and probably see higher post-click conversion (download) rates because the user explicitly searched for ‘free video poker game’, Niren Hiro, CEO at SearchMan told us. His conclusion: Developers can take steps to get the No. 1 rank under each of their ‘long tail’ keywords. That is, developers can optimize their rankings for keywords that will give them better results on the App Store when users go searching for certain kinds of apps. Optimizing for the long tail is key, because generic keywords will have high search volumes but a lot of competition and often lower conversion.

“We go from low(er)-volume, high-conversion keywords (such as ‘golfcoaching’), all the way to what we call secondary and tertiary market keywords, like ‘coaching’ or ‘sports’. Conversion for branded and function searches are likely to have higher conversion rates than inspiration or interest searches – and interest searches may have even better conversion rates than inspiration searches,“ explained Patrick Haig, VP, Customer Success  at MobileDevHQ. If history from the web will repeat itself, then it will become cumbersome for users to browse results, and they will start entering more descriptive phrases to get relevant results fast.

Apart from optimizing the keyword list, an app’s title is of utmost importance. We recommend including the most important keywords in the title to get found.

Showtime: App description and screenshots increase conversion

When users browse search results, two things matter most to increase conversion: app descriptions and screenshots. Over and over again we see the first three lines of description wasted by developers babbling about achievements that are meaningless to new users. Sure, a “Game of the Year” award is great news – but it’s secondary information as long as users don’t have a clue what the game is about. That’s why the app description should explain what the app does in the first 2-3 lines. Bullet points can be used if necessary, as well as precise and short copy. Later in the text authoritative reviews can make sense to build trust, especially for Android where this text is also indexed for search. “For Google Play, it’s even better if you can include reviews that include targeted keywords,” said Patrick Haig.

Screenshots have gained relevance significantly and are a popular medium for developers. Users rely on screenshots to see if they like the look and feel of an app they’re about to download, and –again– to find out what this app actually does. Jai Jaisimha CEO at Appnique: “Moment of truth: iOS6 design increases importance of the screenshot because that is mostly what they see in the App Store client on the phone.” That’s why adding explanatory text is useful – and developers should get creative about it. Patrick Haig: “Treating screenshots like a stop-motion commercial can be powerful.”

Reviews turn users into app ambassadors

Once a user has downloaded an app, ratings become priority because they are crucial for ranking: “We have an article here from Inside Mobile Apps that illuminates how important ratings are, segmented by each store (Google Play and iTunes). Also, it’s becoming even more important for publishers to improve upon their current version rating, as that’s the only rating seen by a searcher in-device (i.e., searching on their iPhone or iPad). Users have to dig in order to see the All Versions rating, which just doesn’t happen,” Patrick Haig from mobiledevHQ told us.

Source: http://imgs.xkcd.com/comics/star_ratings.png

Though important, ratings are not that meaningful to base a download decision on: The average rating is 3.8 making it difficult to see the nuances within the star rating system. To increase conversion, internal and external reviews are getting more and more significant. Being proactive in asking for reviews can save a lot of pain: Prompting users for feedback makes them convey a problem before they post a negative review, recommends Appnique.

Conclusion

At the moment, a big trend in app store optimization (ASO) is trying to overcome the obvious discovery problem by stuffing app’s titles with keywords, longer descriptions or almost complete sentences. The race for the best phrases keywords is in full swing. Obviously user experience will suffer in the process if keyword optimization will be used too excessively by a large number of developers. A backlash might be the result, similar to when Google punished some of the shadier SEO practices with their Panda update.

The ASO tips presented above are not meant to be a ‘silver bullet’ for app discovery. ASO is a useful set of techniques used to increase discoverability through keywords, complementary screenshots and –most importantly– understanding how users are looking for apps. But it’s just one of many approaches to attract attention in a crowded app store, the main one being: having a great app that’s worth discovering in the first place.

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Business Community Tips

Developer Story: Lyft

developer story: Lyft

Sebastian Brannstrom, Lead Engineer for Lyft at Zimride, talked to us about their app and the business that the technology enables. Sebastian has been working in mobile software since 2006, initially on Symbian and then transitioning to iOS, Android & Web by way of a side project, created in collaboration with designer and product manager Anna Alfut. In 2011 he joined VC-funded startup Zimride, who at the time only had a handful engineers, to create social ride-sharing services. Zimride’s initial service was an online marketplace for people to sell seats in their car on longer journeys. It was (and still is) growing but relatively slowly by Silicon Valley startup standards.

App Background

The company decided to create a new real-time marketplace for shorter trips and hence Lyft was born in 2012. Lyft has iOS & Android apps with two modes, driver and passenger. Lyft drivers are thoroughly screened, background checked, trained and insured with a $1M excess liability policy. Passengers can use the app to request rides that are tracked by the service, which suggests a minimum donation to the driver at the end. The driver mode notifies drivers of a nearby pickup request and gives them a short time window to accept it before it’s passed to another driver. The whole system enforces use of Facebook for identification to provide some additional security.

 

Track Record

The concept caught on and quickly became the main focus of the company. The engineering team has roughly tripled in size and the growth of the service is only being limited by how quickly they can recruit, screen and train drivers. Whilst they advertise for drivers on services like Pandora, Spotify and Craigslist, they have never marketed to passengers at all, apart from their signature giant pink mustaches on participating cars. Word-of-mouth marketing at its best, straight out of Seth Godin’s Purple Cow playbook. They have hundreds of registered drivers and tens of thousands of passengers in their first city, San Francisco. The company was nominated for three Crunchie awards and named runner-up in the “Best New Startup of 2012” category. According to TechCrunch, they very recently closed a $15M series B round of venture capital funding and have also just launched their service in a second city – Los Angeles. Open job vacancies make it clear they’re planning significant further expansion.

Competition

The disruption of transportation enabled by near ubiquitous smartphone adoption is an opportunity several startups are attempting to exploit. Lyft faces direct competition locally in San Francisco from SideCar, whilst Uber provide a high end alternative and have stated an intention to create a direct competitor in the lower cost segment. Fairly high-profile competitors with similar technology but not yet competing in the same geographical markets are Heyride, HAILO and Taxibeat, although the latter are enabling existing taxis with similar technology rather than encouraging peer-to-peer ride sharing. There is also indirect competition from existing taxi services.

Business Model

Lyft do not monetize their apps directly, it’s free to download and there are no in-app purchases for new features. Like almost all online marketplaces, Lyft make money by taking a cut of the transactions on the market. In this case the transactions are donations from the passenger to the driver. These are entirely voluntary (which gets around legal issues with drivers using their vehicles for commercial purposes) but the app provides a suggested donation and drivers can set a minimum average donation – passengers that don’t pay much/anything are likely to find no-one will accept their requests very quickly.

Lessons Learned

A successful service is much more than an app. The technology only enables the business at Lyft. Sebastian was quick to point out that the key to the success of the company is the operations team, building a community of drivers and passengers. If they’d simply built the technology and put it out there to see who wanted to use it, it’s very unlikely they’d be enjoying the growth they see now.

Projects will expand or contract to fill the time available to them. The initial concept for Lyft was originally scoped out as an 8-week development for a team of 5 (3 engineers, a designer and a product manager). One of the founders, playing devil’s advocate, said “what if you’ve only got 2 weeks to do it”. This forced them to really cut the concept down to a true Minimum Viable Product. They eventually got the first version built in 3 weeks (server and iOS app) – even today there are still several of their original requirements sitting at the bottom of their backlog unimplemented. The things you think will be essential parts of a service can often turn out to be unimportant for real users.

Team chemistry is essential. It would have been impossible to build such a complex service so quickly without fantastic collaboration. The relationships and collaborative working mode are more important than physical location – Lyft has been hiring top talent from around the world and sorting out visas and relocation to San Francisco afterwards. Sebastian was based in London when he was hired, their iOS lead was in Uruguay and the Android lead in Russia (the extreme time difference was sometimes an issue in the latter case).

What’s in the Lyft toolbox?

Like many successful development teams, Lyft use a lot of third party tools to help build their product:

Also, although they have built their own backend service, creating a highly responsive notification system was a challenge they solved with a combination of polling for updates when sending driver location, the Apple Push Notification Service, Google Cloud Messaging and a paid service from Pusher. However, the latter was initially a source of many crashes due to immature client libraries (Pusher only provide official support for a JavaScript client library, other platforms are community supported).

Sebastian’s desire for the tools space was very much in-line with our outlook in the latest developer economics report – consolidation. Fewer SDKs to integrate and fewer monitoring consoles to log into.

King for a day

Finally, if Sebastian could change just one thing about the platforms he works with, what would it be?

Better support for web/native hybrid app development (Lyft explored and abandoned that approach), with the Android WebView particularly in need of improvement, was a close contender but the top of the list for fixing was the Apple App Store review process.  5-10 days of waiting and they can see from their server logs that the reviewer doesn’t even login to the app with Facebook Connect before approving it. There must be a better way.

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Community

Developer Economics 2013 Survey: iOS vs Android shoot-out

iOS is the best platform for generating revenue,
Android provides a better development environment

Developer Economics 2013 - Android vs iOS shoot-out
We asked developers to pick the top platform, among all platforms they have used or are planning to use, on a number of different aspects of mobile development such as discovery, learning curve and monetisation. We then compared how iOS and Android fare against each other, based on the opinions of developers using both platforms.

The outcome is a tie when it comes to user base, with developers’ opinions divided between the two platforms. However, iOS was ranked higher on 4 out of the six remaining categories, with a clear advantage on app discovery (50% iOS vs. 23% Android) and revenue potential (66% iOS vs. 12% Android). The perception that iOS provides better monetisation opportunities is well engrained with developers and is backed by Developer Economics 2013 survey data. App discovery has developed into a problem for both platforms given the size of their app stores, which now well exceed 700,000 apps. However, despite some initial complaints about the new curation model on App Store, the developer verdict is quite clear on app discovery, which goes to iOS. iOS also leads, but with a smaller margin on development environment and documentation & support.

Android has a clear advantage on development cost (32% Android vs. 14% iOS) and a small lead on the learning curve ( 26% Android vs. 20% iOS). However the total score for the two platforms on the latter two aspects was lower than 50% indicating that most developers that use both Android and iOS believe that neither is best in these areas. In fact 24% of developers among those using Android and iOS indicated that HTML is the best platform in terms of learning curve while 7% indicated that its Windows Phone.

For most developers, the platform perceptions boil down to a decision about which platform to prioritise, i.e. where to invest more resources and which of the two platforms to develop for first. Several other factors may come into play when making a decision on the “lead platform”, such as prior experience or local demographics, but it is fair to say that iOS comes out as the winner in developer perceptions. This is consistent with our figures on lead platforms: among developers using iOS and Android, iOS is the lead platform for 42% of developers, while Android is the lead platform for 31% of developers.

[doritos_report location=’DE13 Article – iOS vs Android shoot-out’]

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Business Community Tools

Will you rise above the app poverty line? (Or: what everyone else is earning)

app monetisation, developer salary

Most app makers are not primarily in the game to make money. The primary reason for developer platform selection is not app monetisation, but reach; irrespective of platform, 54% of developers adopt a platform because of reach, while 43% cite low cost and 30% cite revenue potential. Moreover, out of the eight types of app developers we identified, only three segments (Explorers, Hunters and Guns for Hire) are directly motivated by money when committing resources to a new platform.

Among those of you that are in it for the bling, developer profitability is a hotly debated topic. Apple’s iOS is generally thought to support greater revenues per application, compared to Android, but the evidence is mostly anecdotal. Many stories of overnight successes circulate the internet, but it’s not clear if they are replicable.

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To stay above the app poverty line you need to make a sensible budget plan for your app.  This requires that you have realistic expectations about the costs and revenues that you can expect. Based on VisionMobile’s Developer Economics 2012 survey, we can now offer you an informed opinion.

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