Tag: Platform selection

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Platforms

Major Issues When You Use Mobile App Builders

Having a brick-and-mortar location isn’t enough for the average business anymore. Rather, both large and small businesses need to take the time to build an online presence for themselves. This connects them with their customer base directly and makes it easier for potential customers to find the business. 

Specifically, apps have a special level of potential. When a company has an app, they’re likely to see higher profits, increased customer loyalty, greater brand recognition, and more business from each customer. Smart Insights put the benefits and cost of mobile apps well in their infographic.

However, there is more than one way that developers can tackle building an app. One of the first answers that come up in response to the need for an app is often to use a mobile app builder. Yet, these have some key disadvantages that you need to know. 

Limitations of Template Design

Mobile app builders put a focus on beginners and busy teams that don’t want to worry about custom coding. While convenient, this comes with an unfortunate drawback. It’s difficult to make a striking and unique product when starting off of a generic base. This is a major risk in a market in which, according to Statista, there are currently almost 2.5 million apps with additional ones being released every day. 

In addition, it’s very hard to fundamentally change a template. So, even if developers have the expertise to make changes, it’s going to be difficult if not impossible to achieve the same results as an app developer company when using a mobile app builder. Once again, this limits individual creativity because it won’t allow developers to heavily adapt to the company’s distinct tastes, aesthetics, and needs. 

Access to Limited Features

The features that mobile app builders offer also come back to the downfall of their simplicity. Because users are catered to in a way that doesn’t require them to custom code or program anything into their apps, many mobile app builders are designed with a drag-and-drop feature.

In these cases, there are a number of predetermined features available in the app builder. When developers find a feature they want in their app, they basically drag it into their workspace and drop it where they need it to go. The exact way that the builder works vary from software to software but the general concept is usually the same.

To be fair, there are plenty of mobile app builders that have wide libraries of features to use in apps created on them. That being said, any library of pre-set features is, by nature, limited. Much like templates, this inset limitation isn’t inspiring when it’s juxtaposed with the need to stand out from a crowd of other apps.

Dependence on the Platform Used In Development

When an app is created from scratch by a development company or team, there isn’t a platform that the app is dependent on. On the other hand, when an app is developed on a mobile app building platform, it’s dependent on that platform. If the platform changes or, in the worst-case scenario, shuts down, your company may struggle to update or even regularly maintain the app without transferring it to a new platform or system.

This also comes down to ownership as well as functional convenience. If your company uses a mobile app builder to create an app, it only partially owns that app. After all, the app isn’t just created with the company’s intellectual property but with the technical property of the app builder.

The problem with this is that many mobile app building platforms hold some control over the content created on them. If a problem arises or if the company that owns the platform isn’t entirely trustworthy, the platform is well within its rights to delete or lock a user out of their account or even refuse to continue future service with them. If your business loses progress on an app, it can cause a noticeable decrease in profits, damages to customer relations, and the cost of recreating the app in a different form.

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Dedication to a Single Platform

As just mentioned, when a company builds an app on one of these app building platforms, they give up some of their ownership rights to that app. One of the other consequences to these terms is that many companies struggle to transfer their app from one platform to another.

If your company is using the app builder to create an Android app, for example, this can be a particular problem. This is because if they decide to expand the app, such as creating an iOS version, by taking it to another builder, they may run into problems with the terms of service for the builder they’re already using.

Additional Charges from a Mobile App Builder

A surprising fact for many developers is that building a custom app with an app development service can oftentimes be less expensive than using an app builder. A big part of this is thanks to the set fees that app development services set out at the beginning of their time working with a company.

Mobile app builders vary slightly here. Of course, they have an upfront cost of using the platform but this often changes over time. For instance, as the app grows, it will need more space for data storage. Also, certain features may need to be upgraded to handle higher volumes of traffic.

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When this happens, though, mobile app building platforms may charge additional fees for these additional features. This means that the investment in the tools used to create, maintain, and upgrade the app can exponentially increase over time. 

Mobile App Builder: Conclusions

A mobile app builder is enticing, in large part, thanks to the convenience and ease of use. However, it would be misleading to think that these are the perfect tools. From the inconveniences of limited design choices to the legal challenges of sharing ownership of the app, these platforms make the development and maintenance process more challenging than it needs to be. As an alternative, working with an app development service will offer companies a custom app with less red tape to complicate the process.

Additionally, there are various tools you can use for app development. If you are into ARVR apps, we have created a list of Top 5 Tools for Augmented Reality in Mobile Apps.

What has been your experience of working with mobile app builders?

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Platforms

Which top platforms are easiest to develop for?

In the mobile software world, developers are considered vital to the health of platforms, of which they have several to choose from. Platform owners have to work very hard to make sure their SDKs and tools are easy to use. Too much friction, too little documentation or too steep a learning curve can drive developers away. Which platforms are the easiest to develop for? More importantly, does ease of development translate into popularity? Or is it just a hygiene factor?

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A lesson from history

Mobile platforms have not always tried to make things easier for developers. Before the iPhone, Symbian dominated the smartphone market and had a policy of making developers jump through hoops to ensure both the resource efficiency of apps and the security of the platform. Nokia tried to add a developer friendly layer on top of the OS with Qt but it was too little too late to capture developer attention, even with an existing large installed base. So, a terrible developer experience can ruin a platform’s chances but does greater ease of development lead to success?

Interpret with caution

In our last developer economics survey we asked developers how easy it was to use a common set of APIs on their primary platform. Before diving into the data, there are some caveats:

  1. Comparison between platforms is slightly unfair because the API categories are broad and not all platforms will enable access to the same level of functionality
  2. Not all developers target multiple platforms, so some do not have a good basis for determining ease of use (although purely subjective ratings are still valid for comparison)
  3. The APIs that were included in the survey primarily focus on native functionality, so this comparison in somewhat unfair on HTML5
  4. The APIs do not include UI functionality and building the UI is a significant part of the work in most mobile apps.

Bearing those points in mind, below is what developers think of their platforms.

Easy != Popular

Our data shows that the challenger platforms, BlackBerry 10 and Windows Phone are the easiest to develop for, with BlackBerry 10 having a slight lead. In the middle are the leading platforms, iOS and Android, with iOS fractionally easier to develop for overall but with Android having several APIs where it leads.

In a distant last place we have HTML5, suggesting that it’s still very difficult to build apps that take advantage of uniquely mobile features with web technologies. In this regard it’s interesting that the recently appointed CTO of Mozilla, Andreas Gal has this to say:

“For Mozilla, anything that the Web can’t do, or anything that the Web is not faster and better at than native technologies, is a bug. We should file it in our Bugzilla system, so we can start writing a patch to fix it.”

There appear to be a few more entries for their Bugzilla system above. Web technology has matured a long way and makes it very easy to develop web sites across a wide range of screens – mobile apps are not the same thing and pose a different set of challenges.

To answer the question we posed at the beginning, it seems that ease of development is mostly a hygiene factor. The top platforms are not the easiest to develop for. BlackBerry 10 seems to have surprisingly high levels of continuing loyalty amongst developers despite the very poor sales for the platform to date, so perhaps there is some value in creating an environment developers really love to work with rather than one that is simply not painfully difficult.

The next frontier?

As we move towards a world of connected sensors everywhere and wearable devices are being hyped as the next big thing, an interesting sidenote is that Bluetooth was rated as the hardest API to use by developers across all platforms. After years of failing to reach its potential, Bluetooth is emerging as one of the key technologies enabling smartphones to talk to wearables and other external devices without sufficient power to maintain their own permanent internet connection. Perhaps this is an area for all platforms to consider revisiting, or an opportunity for an Internet of Things platform provider to abstract away the details.

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Business

How much does it cost to create a successful app?

The app stores contain a range of apps from hobbyist creations built for fun to the carefully crafted output of venture backed startups and mega-corporations that have had millions of dollars spent on their development.

05 App Profit & Loss 2014

Even though the market is maturing and exceptionally well-funded developers have taken over the store charts, the occasional small independently developed app that goes viral can still break through and achieve a decent level of success. The question is, how likely is a small budget developer to succeed? What platforms give them the best chance of success? Where should the budget be spent? With all the competition out there, how much does a bigger budget improve your chances of turning a profit?

What are the odds?

In order to look at how budget can impact profitability it’s worth calibrating by the average chances of making a profit on each platform.

The figures in this chart are probably more positive than most industry observers would expect. Looking at the data it seems likely that many solo developers have valued their time at zero when reporting costs. For hobbyists and explorers, working in their spare time this might make rational sense. They don’t expect to be paid for the time anyway and their small app profits more than cover their other development costs. This is reflected in the slightly lower level of Android developers losing money versus iOS (there are far more hobbyists on Android than iOS).

Leading platforms

On the most popular platforms – iOS, Android and HTML5 – there’s a general correlation between spending more on an app and making more revenue. However, not all spending produces equal results. Spending more on development only slightly increases the chances of making a profit, while increased spending on design and marketing are strongly correlated with higher probability of making significant profits. Higher spending on customer service is almost always associated with greater profit probability but here the causation is almost certainly in the other direction; successful apps incur greater customer service costs because they have a lot of customers! These platforms show very similar patterns but they aren’t identical. The biggest difference between them is that spending more on design for HTML5 apps seems to produce much less of a boost to profit probability than for either of the leading native app platforms.

The second tier

BlackBerry 10 and Windows Phone show similar patterns of spending versus profit probability that are very different from the leading platforms. For small amounts of spending, there are similar patterns to the leading platforms. More investment, greater chance of a profit, with better returns from design and marketing spend. However, before reaching a level that would sustain a full-time designer or developer, the trend reverses; investing large amounts in any aspect of apps for these platforms reduces the probability of a profit and increases the chances of making a loss. This suggests that these platforms have not yet reached sufficient scale in terms of app revenues to sustain many highly complex or polished apps.

Opportunities everywhere

On the leading platforms, developers with budgets in the multiple thousands of dollars a month have roughly twice the chance of turning a profit on their apps as those spending minimal amounts. Even at lower spending levels, the probability of breaking even or better is reasonably high across all platforms, particularly for those investing in design and marketing. While it’s clear that only some of the platforms discussed above are likely to support scalable app businesses at the moment, there are plenty of opportunities to build profitable apps on any these top 5 platforms.

Want to know more?

I’ve only scratched the surface of our data here. What scale of profit or loss can be expected on different platforms with different levels of investment? Are there optimal investment levels to maximize the chances of success? Which app categories are most likely to product a profit. What do successful app development companies look like at different sizes? All this and more is covered in our App Economy report.

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Business

The Android Monetisation Myth: iOS still rules the west

[tweetable]Revenues from Android apps saw tremendous growth in 2013[/tweetable]. If you look at the headline global figures then revenues from Android apps on Google Play are rapidly closing on those from iOS apps on the App Store. It looks extremely likely that 2014 is the year that Android will overtake iOS in total app revenues. However, dig a little deeper and you’ll find the distribution of revenues, both geographically and across apps is rather different. If you’re planning your platform strategy for this year then a dive into the details might prove invaluable.

Almost a year ago, I wrote about two important app market trends to watch in 2013, which were continued growth of app revenues (they’re still growing, Android significantly faster than iOS) and revenue distribution (it’s getting even more concentrated at the top). According to Distimo:

“On a typical day in November 2013, we estimate the global revenues for the top 200 grossing apps in the Apple App Store at over $18M. For Google Play, our estimate is about $12M. In November 2012, these estimates were at $15M for the Apple App Store and only at $3.5M for Google Play.”

That’s 20% annual growth at the top of the market for iOS and just over 240% annual growth for Android. Add to that there are also alternate stores for Android that have been growing revenues too. These figures and relative growth rates make it seem as if Android is the place to be in 2014. It might be, if you can make it to the very top. If we look at AppAnnie’s report for a similar period, they estimate that total iOS App Store revenues roughly doubled year over year*, while total Google Play revenues were a bit more than triple their year ago levels. So although Apple seems to be improving the revenue distribution slightly, it’s getting even more concentrated at the top of the market on Android.

Even the wider distribution of revenues on iOS may not be quite as good as it looks when we also consider geographic spread. Although the US is still the top revenue earner for iOS, the bulk of the growth is in Asia, particularly China and Japan. The top grossing charts in these countries look very different from the global top grossing apps and this may account for much of the widening range of high revenue apps. [tweetable]On Android, the bulk of the growth and total revenue is in Asia and thus so are the top grossing apps[/tweetable]. Japan has overtaken the US as the top revenue earning country for apps overall mostly due to growth on Android. The vast majority of the increased revenue is in free-to-play games and App Annie’s report shows that in Japan, almost all of this was attributable to just five publishers. Two of those publishers were existing major games powerhouses before the mobile era and they have several well known franchises. Two more reached the kind of scale where TV advertising became a viable route to market and exploded from there. The last of the five is LINE, who built a messaging platform with over 300 million users as a channel to promote their games.

This concentration of revenues amongst five publishers in Japan is mirrored elsewhere in the world. Consider Supercell (makers of Clash of Clans and Hay Day) were at $2.4M per day in revenues in April 2013, when they were still only publishing on iOS (they’ve since launched on Android) and were in the middle of expanding through Asia. That’s more than 10% of daily global App Store revenues for the top 200 grossing apps made by one publisher with 2 apps. Supercell aren’t unique either – according to Think Gaming’s estimates, King.com’s Candy Crush Saga is making more than $900k per day, just on iOS in the US. Indeed Think Gaming give us a better idea of the distribution. Their estimates show that the number 10 grossing game makes only a 10th as much as the top grossing game and by number 100 you’re down to nearly 100th of the revenue.

So, with revenue concentration at the top of the charts on Android even greater than on iOS, Android is the platform to target if you’ve got a world beating app with global appeal on your hands. Otherwise you’re almost certainly still better off on iOS first. Our own data, which considers revenue sources outside the app stores as well, agrees with this. If we only include the publishers earning less than $5M per month then iOS comes out on top, although if we include everyone with non-zero revenues then Android sneaks ahead. Significantly higher revenues for a tiny number of top Android developers pushes the average ahead of iOS (although the median remains way behind – there were more iOS than Android developers earning >$5M per month in our survey).

Android may become the top earning platform from App Stores in 2014 but it seems that only an elite few developers will reap the rewards. We’ve already shown that building enterprise apps and avoiding the app stores is a better bet financially but Android is not currently a lucrative platform in the enterprise market either. Still, it’s not all bad news for Android developers – the rising tide of revenues will lift all boats to some degree. Also, even 2014’s cheap Android device should be running at least Android 4.0 and have hardware capable of running almost any app well. This should reduce costs and increase the real addressable market for all Android developers. Last but not least, for an increasing number of developers [tweetable]it’s not a question of Android or iOS, it’s becoming ever more important to target both[/tweetable].

* Distimo’s year was November to November, while App Annie’s was October to October, so there may be some impacts from the relative timing of new product introductions.

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Business

4 Reasons Not to Build Enterprise Apps

In an earlier post we showed how enterprise app developers make 4 times the revenue of those developing consumer apps on average. Targeting enterprises with apps can be very different from building consumer apps and not all developers prioritise revenue, so it’s not for everyone.

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Do you want the indie developer lifestyle, or to build a company? What sort of contact do you want to have with your customers? Do you like consulting work or do you prefer to build your own products full time? Do you have a strong development platform preference? Depending on your answers to these questions you might find one of the 4 reasons below keeps you focused on consumer apps for the foreseeable future.

1. You like to work alone

The creation of the app stores enabled vast numbers of individual developers to create and monetise their own apps. Amongst the revenue earning developers targeting consumers, almost 43 percent are in one person companies and practically all of those don’t involve anyone else in development. Of the developers building apps for enterprises, only 13.3 percent are in one person companies and those are almost exclusively doing contract work. The one person enterprise development companies earn 24% more revenue than the equivalents building consumer apps but it’s definitely not the independent developer lifestyle they’re living. In general the enterprise developers earn more than those developing for consumers at every team and company size, with the difference increasing with team size up to the 500 employee mark. Above that revenues from app development per person drop significantly, although on both sides a lot of large companies developing primarily for reasons other than earning revenue are included here.

2. Direct sales repels you

As you can see from the charts above, enterprise app developers tend to work in larger companies than those targeting consumers. There’s also a bigger company size to team size ratio. The difference here is likely to be sales, marketing and support teams. In general, larger customers need more direct contact. In the consumer apps space it’s possible, although unlikely to be successful, to launch an app and sell it without ever having contact with anyone that uses it. However, although the costs of direct sales staff may seem high, consumer apps with large revenues and user bases typically pay to acquire a decent fraction of users (e.g. via in-app ads, Facebook app install ads, cross-promotion networks). We don’t have any data to compare the cost of sales for these developers but I wouldn’t bet that the average cost of sales as a fraction of revenue for the successful consumer app developers was significantly lower.

Whilst subscription revenue is by far the best earner for consumer app developers, it is one of the worst revenue models for enterprise developers. In the enterprise market per user/device licensing and other sales outside of app stores is a key revenue component for most successful businesses. This aspect of a business can often be very unattractive to developers.

3. You want complete creative control

On average [tweetable]enterprise app developers earn a much greater fraction of their revenue from contract work[/tweetable] (consulting). The most successful enterprise app businesses earn 25-75% of their revenue in this way (we only have 25% bands). It’s likely that there’s a lot of custom integration work involved in selling to larger enterprises. Even those selling to SMEs often offer customizations.

Developers who consider their apps an art-form and build them primarily to earn a living doing something creative they love will probably want to stay away from areas where a lot of contract work is involved. Those same developers are also not very likely to be inspired to help automate business processes or other similarly mundane but useful enterprise app functions.

4. You love Android development

There are some very major differences in the revenue models and revenues of enterprise app developers depending on their primary platform. The really big revenues are currently being earned by HTML5 developers (> $100k per developer per month). Next highest revenues are for iOS developers (a little over $50k per developer per month) but it seems that [tweetable]a lot of iOS app enterprise development is currently outsourced[/tweetable], since more than 70% of these earn >75% of their revenue from contract work and 40% earn 100% of their revenue in that way.

Compared to these two, the Android developers are the poor cousins. Despite having a much wider range of revenue models, their average revenue per developer is much lower (about $14k per month). Enterprise development still pays very slightly better on Android than building consumer apps but given the other trade-offs discussed above, it might seem like a relatively poor deal.

Running out of excuses?

When we published the last article, showing that enterprise developers make 4 times as much revenue as those targeting consumers, a lot of responses suggested that this difference was all in the large enterprise sales market and required large direct sales teams. While there is definitely some advantage to scale, this is certainly not the case. Not all enterprises are large and there’s a very big market of SMEs looking for mobile software to make their businesses more efficient or convenient. Although the most profitable enterprise app development companies are in the 51-500 employee range and solo developers are only marginally better off targeting enterprises, a 2-5 person company makes more than 4 times as much revenue on average by choosing to build enterprise apps. The 2-5 person enterprise app business is much more likely to be building HTML5 hybrid wrapper apps rather than the native iOS or Android apps of a similar sized consumer focussed business. They are also likely to be spending more of their time (although far from all of it) doing contract work. If neither of those things bothers you then it might still be worth considering the enterprise market for your next app.

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Business

App monetisation: Games vs. Enterprise and Business Apps

The mobile apps business is maturing and while most of the media attention is still focussed on the latest app store success stories, developers are finding lots of better ways to improve app monetisation. Considering all revenue sources, which categories of application are generating the most money and what’s the competition like on each platform?

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App Stores not the answer?

In our last developer economics survey we asked developers to give us a breakdown of their revenue from different sources. Of the 1,695 developers earning between $1/month and $5 million/month who reported their revenue breakdown to us, 55% generated some of their income from app stores. There is a negative correlation between the fraction of revenue an organisation earns from app stores and the total revenue they earn per person involved in app development. That is, the more you rely on app stores for revenue, the less you are likely to make any. By excluding those with revenues above $5 million/month, we’re ignoring the very top of the store charts where the bulk of app store revenue is made. However, this is just a handful of developers, who would otherwise have an extremely disproportionate effect on the average. It’s also worth noting that [tweetable]there are limited costs involved in app store publishing but it produces the lowest average revenues of all sources[/tweetable] in our survey – it’s clearly not the easiest way to build a profitable app business.

Is there gold anywhere but games?

With games accounting for around 75-80% of all app store revenues it’s possibly not surprising that they were the most popular category of app amongst the developers in our survey. Given the chart above it shouldn’t be surprising that they are far from the most profitable (~$2,500/person/month more than the lowest mean income and the lowest overall median income). So [tweetable]which were the most profitable app categories? Business Productivity and Enterprise apps[/tweetable]. However, there are some significant differences between platforms so it’s worth playing with the interactive chart below to spot any opportunities that might be of interest.

[tweetable]Median developer revenues are higher on iOS than Android across all categories[/tweetable], but in some categories mean revenues are higher on Android. This shows that there are some developers managing to exploit the much larger market on Android successfully but most developers are still financially better off on iOS, including revenues from outside the app stores. Where average revenues across all platforms were higher than either iOS or Android, web developers were usually making the most revenue in that category.

The averages in the charts above still hide a lot of potentially interesting detail on where the best opportunities in the apps market are. Those wanting a more complete analysis should look at our App Economy Forecasts report.

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APIs Tools

Accelerating Web Apps – It’s all about politics

On desktop computers web apps have come to dominate many application categories. They are easier to develop and deploy across multiple platforms and it’s possible to iterate much faster. A very large number of developers would like to be able to apply the same technologies and techniques on mobile devices but very few are able to do so successfully, particularly for mass market consumer apps. One of the most important reasons for this is performance. Resolving this issue is much more about politics than technology.

Are mobile web apps doomed to be slow?

Back in July, Drew Crawford wrote a blog post that got a lot of attention essentially claiming that JavaScript performance on mobile devices was simply too slow for serious apps and likely to stay that way for the foreseeable future. It showed, amongst other things, that the browser on the iPhone 4S was around four times slower than the slowest browsers capable of running Google docs real-time collaboration or Google Wave back in 2010. He claimed that ARM processors were not going to get faster rapidly enough to make a difference and JavaScript runtime improvements had stalled and were unlikely to make significant progress. Technically both of these points seem to have been proven wrong already. Apple just announced the iPhone 5S, with a processor twice as fast as the iPhone 5, which was in turn twice as fast as the iPhone 4S – so we have four times more raw CPU performance than we had just two years ago, theoretically enough to support 2010 desktop class browser performance. Also, Mozilla are working on asm.js, which uses a subset of JavaScript compiled ahead of time (AOT) and promises to enable apps to run in the browser at just 1.3 times slower than native performance – almost another four times speed increase versus the current five times slower than native performance of modern JIT compilers.

In addition to being at least partly incorrect this is also looking at a very narrow area of browser performance, a point well made in Sencha’s blog post in response. Across all vendors there are key performance areas where each is 10-40 times behind another. In reality, most of the major performance issues that prevent web apps from being competitive with native apps are related to graphics performance. Mobile device users have come to expect slick animated UIs which are only enabled by GPUs on the devices rather than, say, manipulating the DOM with JavaScript. Fortunately HTML5 and CSS3 provide several opportunities for GPU accelerated graphics with e.g. Canvas, CSS animations and WebGL. So, as mobile hardware and browser software continue to improve over the next couple of years competitive web apps should be just around the corner, shouldn’t they?

Platform wars and politics

With the technologies available or on the very near horizon today, plus improvements to mobile browsers across the major platforms, there’s almost no doubt that we could have competitive web app performance. The problem is that to get there requires platform providers and OEMs to adopt the technologies and implement the improvements – it’s not necessarily in their interests to do so.

Apple and Microsoft want users locked-in while Google wants them logged-in. Mozilla wants the open web everywhere but Google funds them. Opera recently gave up on writing their own browser core and use Google’s instead. That’s over-simplifying but fairly accurate. With other browser vendors attempting to prevent the user tracking that Google’s business model depends on (through default Do Not Track settings or third party cookie blocking) the best way to ensure users stay logged-in is to get them all using Chrome. This means they’re fighting a new browser war for control of the desktop web and taking that to the bulk of the mobile market through Android. In the process they are building several browser technologies to differentiate rather than standardise (e.g. they’ll prefer their own Native Client solution to asm.js).

At the same time Apple wants a great browsing experience but wants developers to build native apps rather than cross-platform web apps. As such they adopt most new web standards quickly but are very slow to include any that might enable high performance web apps – e.g. WebGL has been implemented since iOS 4.2 but only enabled for iAd, not in the browser, also Apple has famously not enabled their JIT compiler in the WebViews used by wrapped web apps* (needed to access native APIs) slowing their JavaScript performance by almost four times. Mozilla’s asm.js seems a very unlikely candidate for Apple to adopt anytime soon. Unless their new CEO makes a major change of strategy, Microsoft seem determined to follow the Apple model, although they might need first class web apps enough to accelerate their standards adoption.

A ray of light?

While there may be several classes of app for which mobile browsers are already good enough, for those hoping to develop all apps with web technologies, the news is not all bad. Although it seems unlikely to be possible to deliver a single solution with great performance everywhere, we might not be far from being able to deliver a good level of performance almost everywhere. Although Apple appear to have some strategic performance limitations, they also have some of the fastest hardware on the market. At the other end of the spectrum good Android browsers are reaching low end smartphones and the Firefox OS, also targeted at low cost devices, has an excellent web app environment. The other good news is that while we have real competition in the mobile market, browsers should keep getting better all round. We’re unlikely to see the return to stagnation of the Internet Explorer dominated early 2000’s.

* Apple do have a good security reason for doing this but they haven’t been in a hurry to resolve it either.

Categories
Languages

Is HTML5 the 3rd horse in the race?

Biggest developer survey

We’re thrilled to announce that the Q2 Developer Economics survey we conducted throughout April was the most successful to date, zooming past the 6,000 respondents mark, making it the biggest developer survey globally.

UPDATE: The survey results have now been published – download the free report here.

We broke through the 6,000 developer mark mainly thanks to the help of our 48 Marketing and Regional partners. Together we reached developers from an unprecedented 115 countries, from mature markets, like the US and Western Europe, to emerging markets, like Brazil, Russia, India and China. To reach developers on a global scale, we translated the survey in 10 languages (Arabic, Chinese, French, German, Japanese, Korean, Portuguese, Russian, Spanish, and Swedish), aided by our local partners, who helped us reach the local dev communities. Thanks to a partnership with Mobile Monday, we also promoted through over 20 local MoMo chapters in Asia and Oceania.

In the next two months we ‘ll be diving into the results of the survey. The Developer Economics state of the developer nation report will be launched in July, as a free download thanks to the sponsorship by BlackBerry, Mozilla, Intel and Telefonica. This 5th incarnation of the Developer Economics report will feature the latest market trends, including Developer Mindshare and Intentshare, platform selection criteria, revenue models, revenues per app and many more. To whet your appetite until the July launch, you can read the previous editions of the Developer Economics report.

To be the first get the Developer Economics 5th Edition report, sign up for our mailing list!

Sneak peek on Mindshare: Android, iOS duopoly entrenched – with HTML closely behind

Our early results from the Q2 app developer survey are starting to come in – starting with the Developer Mindshare Index 2Q13, i.e. the percentage of mobile developers using each app platform.

As you can see in the graph, the use of Android and iOS is still predominant, with a few percentage points of change for both platforms when compared to our 4Q12 survey. You’ll also notice the continued growth of HMTL as the third horse in the platform race, slowly creeping up on iOS. These trends have been steady over the past year – but what do they mean?

Developer Mindshare Index 2Q13

The continued positioning of Android and iOS as the top two platforms is a no-brainer: Android has the largest installed base and iOS enjoys the highest revenue potential overall – so why does HTML5 continue to grow?

HTML5 grows in popularity as large groups of web developers are leaping over the ever-shrinking chasm from desktop to mobile apps. Moreover, HTML5 allows for the development and deployment of apps that work across different platforms, usually at a lower cost of developing HTML apps, and for most app categories. About two thirds of developers targeting HTML mobile develop web sites or web apps while just under a third are using PhoneGap. Stay tuned for more analysis on the route to market for HTML5 apps in the full report.

HTML5 has wide industry backing across telcos, handset makers and platforms (Firefox OS, BlackBerry WebWorks and Tizen) going for it. At the same time, there are certain key disadvantages, namely access to native platform APIs, as well as the lack of a unified development environment and quality debugging tools.

HTML5 is now challenging the duopoly as a development or deployment platform – with the route to market varying across browsers, hybrid apps (e.g. PhoneGap), JavaScript converters (Appcelerator) and dedicated platform frameworks (BlackBerry WebWorks). We still see a growing diversity in the go-to-market approaches for HTML5 developers, and one which we believe will continue to expand. We‘ll be analyzing the HTML vs. native tradeoffs in a future report, but in the meantime – what’s your take on the HTML vs. native debate?

Sneak peek: Windows 8 and BB 10 are gaining traction

As you can see from the early Developer Mindshare graph, Windows 8 and BlackBerry 10 have already attracted a reasonable amount of developer attention. What’s important here is that BlackBerry developers have been quick to migrate from the old legacy (5,6,7) platforms and adopt the latest, BB10 platform.

BlackBerry Mindshare

What’s interesting to note in the graph above, comparing the use of BB platforms between the two latest surveys (4Q12 vs. 2Q13) is the fact that the BB 5,6,7 platforms are quickly fading into oblivion, with BB10 mushrooming to a substantial 15% mindshare in just 6 months. The mindshare of BB10 is slightly less than that of BB 5,6,7 six months ago, but the platform is still gaining in strength, as our data for the platforms that developers plan to adopt seem to suggest, so there’s room for growth. The extent to which the new BlackBerry platform can grow in Developer Mindshare depends primarily on the volume of devices that BlackBerry will manage to sell in the coming months, given that reach is the primary reason for platform selection.

Competing against Windows Phone and BlackBerry 10, new entrants Firefox OS and Tizen are slowly gaining support from a few handset OEMs and network operators. Another open question is whether the HTML5 platform proponents – Tizen, Firefox OS and BlackBerry WebWorks – should band together towards a single HTML5 implementation or keep pursuing independent and conflicting strategies. What’s your take?

Full report available in July

We’ll be stopping our sneak peek here – stay tuned for the full report for more (out in July)! There, you’ll find an in-depth analysis of major trends, such as the shifting balance of power between the top platforms, devices vs. tablets, revenue models, as well as the main factors affecting app monetization. If you haven’t already done so, subscribe to our mailing list to receive word of the report publication.

Until next time,
– Matos (@visionmobile)

Categories
APIs Tools

Which apps make more money? App monetization insight from our Developer Economics 2013 report

[This post by Andreas Pappas, Senior Analyst at VisionMobile, first appeared on the VisionMobile blog on April 3, 2013.]

[How do app developer revenues vary by country, or platform? Does the number of platforms make a difference to app revenues? Which models bring in the most revenues? We revisit Andreas Pappas’ November analysis of app monetisation with more insights from our Developer Economics 2013 survey across 3,400+ developers – while launching our latest survey, which is available here]

Developer-Economics-volume-5

Back in November, we looked at which apps make money based on research on how app revenues vary by platform, app category, country and more. In this article we update our analysis on app monetisation based on the latest research from Developer Economics 2013 across 3,400+ app developers, including analysis that did not make it into the report.

We ‘re also proud to launch our very latest Developer Economics survey, which reaches across thousands of app developers and provides the data for our famous state of the developer nation reports. Thanks to the sponsorship by BlackBerry, Mozilla, Intel and Telefonica it possible to provide these reports and additional insights, for free, to the entire mobile community.

Take part in the survey, spread the word and help us drill deeper into the app economy and what makes it tick. We have prizes aplenty for developers, with 7 devices up for grabs (one iPhone 5, two Samsung Galaxy SIII, two Nokia Lumia 920 devices and two BlackBerry Dev Alpha handsets) – plus an AR Drone 2.0, a Nest Learning Thermostat and a Nike Fuel Band for participants who also subscribe to our developer panel. Last, but definitely not least, our friends at Bugsense are giving away one month of free crash reporting to each and every participant.

Survey Q1 2013

 

Developers in North America lead the revenue leaderboard

We’ll start by taking a look at income distribution by the region where app developers are based. Last time we saw that US developers earned almost double the revenue of UK developers. Based on our Developer Economics 2013 data, North America (and particularly the US) is still in the driving seat of the mobile app economy with developers in North America generating about 30% more than their european counterparts, who in turn generate 47% more revenue than developers in Asia. To some extent higher revenues for NA developers are explained by higher consumer spending in the US and higher penetration of iOS, which as we will see later on, still generates higher revenues than other mobile platforms. Note that across this analysis we are restricting our sample to mobile app developers, and have excluded the top 5% of revenue earners in order to minimise the effect of outliers.

North America leads app revenue leaderboard

While app development activity is booming in Asia, the average app-month revenue is quite lower than in the US and Europe, although developers in Asia develop, on average more apps and use more mobile platforms. As we explained in the previous article, there are multiple reasons for this revenue gap, but the prevailing reason is the fact that paid apps are not popular in most of Asia, the country that drives the Asian app economy. Instead, developers in Asia rely much more on advertising revenue, which, according to our findings is the least profitable revenue model.

iOS still monetising better than other platforms

iOS continues to dominate platform revenues, generating, on average, 30% more revenue per app-month than Android. The revenue gap has reduced by 5 percentage points compared to that reported in our Developer Economics 2012 report in June 2012.

iOS continues to dominate revenues

At the same time, Windows Phone has caught up with Android and seems to be doing slightly better. Although the 5% advantage is arguably within the margin of error, Windows Phone has significantly improved its position relative to the figures reported in the Developer Economics 2012 survey, when it generated, on average, about half as much revenue as Android. How has the landscape of platform monetisation changed in Q2 2013? Join the survey and help us track the state of the developer nation.

Multi-platform developers earn more

Developers using more platforms earn more

There is a wide revenue gap between developers/publishers using 6+ platforms and those using 5 or fewer platforms, with those developing for 6+ platforms generating, on average, 75% more revenue. However, only a small part of the developer population (4%) develops on 6+ mobile platforms; these are probably established services with a large footprint that want to ensure that their apps are universally available (e.g. Facebook, Skype etc.) or large software houses with a large enough pool of resources to target multiple platforms for their customers.

Those developers employing just one platform are probably solo, amateur developers or have not yet had the success that warrants (and allows) an expansion onto more platforms. As developers become more successful, they will expand onto new platforms and generate more revenue. So while, expanding on more platforms is not sufficient to generate more revenue on its own, those that do find success are likely to invest in a multi-platform strategy.

Extending apps to new markets is a profitable strategy

We asked app developers how they decided on which apps to develop or work on next and then looked at the way revenues vary depending on their strategy. While most developers will develop apps they want to use themselves (50%), this is apparently the least successful strategy and should not become the sole deciding factor for your next app.

Extending apps into new markets pays better

Developers that use some form of market research such as discussing with users, monitoring apps stores or directly buying market research are much better off, generating at least double the revenue of those who just develop the apps they want to use. However, market research is not widely used among the developer population: only 24% of developers discusses with users, highlighting a lack of business maturity and also a gap in frictionless 2-way communication channel between developers and users.

Overall, the most successful developers are those that extend apps to new markets, either to new geographies or different verticals. To some extent, these strategies rely on copying the recipe of an already established and successful business: these are apps that have been tried and proven in at least one market and are generally less risky options or “low hanging fruit” for developers. Why start from the ground up when you can stand on the shoulders of giants?

The most lucrative revenue models are off limits for most developers

When talking app monetisation, there are over 10 different revenue models to chose from. Device royalties and distribution licensing fees are the top-grossing models but are quite rare among app developers due to their high barriers to entry. These models imply deals with device manufacturers and distributors which means long, expensive sales cycles and a successful app to start with. Among the rest of the revenue models, commissioned apps (development for hire) come on top since they come with a low risk and guaranteed income for developers that work under contract.

Royalties & licencing fees pay better

The next most lucrative revenue model is the subscription-based model but this also comes with caveats: a subscription service implies a significant investment in licensing, and maintaining quality content or services that keeps users engaged on an ongoing basis.

Among the revenue models that are most popular and more accessible to developers, In-app purchases come on top, generating, on average 34% more revenue than Freemium and 43% more revenue than Pay-per-download. In-app purchases and Freemium models are becoming increasingly popular, now being used by a quarter of developers as they seem to be appealing to consumers. We ‘re revisiting the topic of most lucrative revenue models in our latest survey. Join in and help us size the app economy.

Smart developers use smart tools

Finally, we take a look at how developer revenues correlate to the use of third party tools and services. It’s interesting to see how app revenues correlate with usage of performance tracking and management tools like user analytics and crash reporting. Developers using crash reporting and bug-tracking tools such as Crittercism or BugSense generate on average, three times more revenue than developers who don’t use these. Similarly the usage of User Analytics (e.g. Flurry, Apsalar) services is also associated with much higher revenues, with those using user analytics services generating 168% more revenue than those who don’t.

Higher revenues for developers using dev tools

Both user analytics and crash reporting services are used by experienced developers who recognise the importance of optimising for user acquisition, activation and retention, while reducing in-the-field crashes and the resulting user churn.

Track the state of the developer nation

[tweet_this content=’App developer? Take the new Developer Economics survey and win prizes!’ url=’ http://www.visionmobile.com/DS13PortalBlog’]These insights are made possible by our ongoing surveys. Join the latest Developer Economics survey to help us draw deeper insights into monetisation, the size of the app economy and the debate of HTML5 vs. native. In this survey we ‘re focusing on the population of iOS, Android, WP, BlackBerry and HTML5 developers, across countries, app categories and developer types. If your are a developer take the survey, or otherwise spread the word and watch this space for an update on revenues, platforms and the state of the developer nation.[/tweet_this]

And don’t forget to fire away with those comments, rants, criticism, praise or simply feedback on what you ‘d like to see next.

Andreas (follow me on twitter @PappasAndreas)

Categories
Languages

HTML5 Adoption and the Importance of Independence

HTML FUD

Last year was quite a bad one for HTML5 in terms of developer mindshare. At the end of 2011, developer sentiment seemed to favour a shift away from native and towards HTML5 for a large range of application categories. As the year went on, there were more horror stories than successes and the tide of opinion swept the other way as Facebook publicly declared that HTML5 wasn’t good enough for their mobile apps. With a title declaring the importance of independence you’d be forgiven for thinking this article would be about a need to reverse that trend to get away from the tyranny of walled garden app stores. Nothing of the sort we promise.

Look out for sampling bias

Independent surveys and statistics are the important thing referenced in the title. HTML5 adoption just happens to be the subject of one of the best bad stats examples in the midst of last year’s shift. Apparently last summer, just after Mark Zuckerberg’s revelation that betting too heavily on HTML5 for mobile apps was the biggest mistake he’d made at Facebook, 94% of app developers were betting on HTML5 winning. Of course this survey came from Kendo UI – a vendor of HTML5-based tools for mobile app development. It’s unlikely they set out to create a useless survey but they did want some data to support their tools. So they asked web developers if they were using, or planning to use web technologies – amazingly most of them said yes! This is clear from the fact that the number one reason for using web technologies in the survey was “familiarity of languages”. Such a high proportion of developers working with web technologies should be excellent news for upcoming web-app only platforms like Firefox OS and Tizen, however, the huge number of native applications being created across all the platforms suggests the real figures are nothing like this. It’s a clear case of sampling bias. Kendo UI recently published another survey in which a more realistic 50% of developers built some apps with HTML5 last year but a rather less credible 90% were planning to use it in 2013. Contrast this with our latest mindshare and intentshare data, which agrees with 50% use last year but sees only 15% of those not already using HTML planning to adopt it.

Seek transparency and independence

In our developer economics survey we make a big effort to ensure we collect data from a wide range of developers and we publish the breakdown of platforms developers are working with along with the results of all the other questions. Where appropriate we weight or normalize results according the the proportion of different groups in the survey. Of course it’s not possible to avoid all bias in the sample and there is undoubtedly an element of self-selection – developers with an interest in the commercial aspects of app development are much more likely to answer a survey entitled “developer economics”. To a certain extent, that’s deliberate – serious developers who are trying to build businesses that involve apps want to know what other like-minded folks are thinking and doing.

If you’re looking for reliable information on the app market, particularly if you want to make business decisions using it, you need the most independent and transparent sources. We’re doing our best to be one of those sources.