Mobile Apps Market to Open Up Huge Opportunities for OS Vendors, Developers and Operators

What makes a smartphone really smart is its ability to access a range of apps it can run. In many ways, mobile phones have come out of their conventional mould. The major applications users used in the past were ones like voice, texting status updates and things like m-banking. But in the last 2 years, mobile apps industry has become hugely spurred by the new generation smartphones and OS like Android. Moreover, the mobile OS market which used to be tri-polarSymbian, Windows and Apple and with fringe opportunities being taken by players like Palmhas seen a sea change in the last couple of years.

Changing Dynamics

The mobile apps market is a huge revenue driver for operators, OS vendors and developers. Its a kind of triumvirate in which every party benefits. If we look at some available statistics, a report from Gartner suggested early last year that during 2010, consumers will spend $6.2 bn in mobile application stores while advertising revenue is expected to generate $0.6 bn worldwide. Meanwhile, mobile application stores will exceed 4.5 bn downloads in 2010, 8 out of 10 of which will be free to end users. Gartner forecasts that worldwide downloads in mobile application stores will surpass 21.6 bn by 2013 while free downloads were estimated to be at 82% of all downloads for 2010, and will account for 87% downloads by 2013.

Analysts say that the mobile apps market is indeed driven by the smartphones. High-end smartphone users are the early adopters of new mobile applications and more trustful of billing mechanisms, so they will pay for applications that can meet their needs. Average smartphone users will become less tech-savvy as smartphones come down in price to have a mass market appeal and these users will be more reluctant to pay for applications. So, the app market will have a healthy repository of simple free apps to satisfy the free user and more serious productivity and business apps for serious tech savvy smartphone users.

Industry experts say that application stores will be a core focus area during 2011 for the mobile industry and applications themselves will help determine the winner among mobile devices platforms. Analysts like Gartner say that consumers will have a wide choice of stores and will seek the ones that make it easy for them to discover applications they are interested in and make it easy to pay for them when they have to. Developers will have to consider carefully not only which platform to support, but also which store to promote their applications in.

There are 3 kinds of app stores now. One, every OS vendor has his own app store like Apple Store, Android Market, Nokias OVI, RIMs Blackberry App World and Windows Mobile. The latest one is the Samsung App store which offers its own Bada OS based apps among others. The second category is service providers portal based app stores and the third one is independent third party app stores like Mobango. While entities like Mobango only provide free apps, the former 2 have a mix of paid and free apps.

While vendor based app stores generate a good deal of revenue out of paid apps, operators and third party app stores are primarily dependent on mobile advertising. Take the case of Mobango, it has customers worldwide across all geographies. Company sources say that Mobango has served over 750 mn downloads and currently generates in excess of 1 mn downloads of applications a day to its customers. Mobango says that it has one of the largest developer communities in the world and it uploads to its store a large number of mobile applications everyday.

Says Badri Sanjeevi, CEO, Mobango, We have around 35,000 apps across operating systems, except Apple all our applications are totally free. We have recently launched a unique initiative through which developers can monetize on their apps. To this end, we have launched an interactive platform called Make More Money (MMM) which scans more than 55 ad-networks worldwide. Mobango publishers will now be able to make immediate money from their in-app ad revenues. Developers who are already a part of interactive portfolio can now upload their applications to Mobango and boost their downloads with a special promotion.

Innovation Rules

In the context of independent third party mobile application revenues, excluding games, estimates suggest that it is right now a `250 crore market and growing rapidly. As we look at India right now, its highly a Symbian based and consumer centric apps industry. But, things are in for a change and companies like Mobango may be bullish in 2011, Android based apps will overtake Symbian and will have the largest number of apps in the market.

Also, the next major shift is the growth in more serious enterprise apps development and that will spur bigger revenues going forward. Right now India is in a cuspfrom the elementary wallpaper and games download, the next logical evolution would be more about serious productivity apps in smartphones. Even if a basic app is priced at `25, it translates into huge revenues. Recently, Samsung launched in India its paid apps service through its app store with the credit card payment option.

What really is important is innovation in the apps market. For instance, Apple iPhone is used in many innovative ways. Sometime back, an iPhone app called iStethoscope was launched and it is now being used by thousands of doctors around the US and in some places, it has replaced the conventional stethoscope. Clearly, apps are such an impactful medium when put in the right device hardware and OS environment.

Even for a new OS like Bada, the response in the market has been very impressive.

Says JK Shin, president and head, mobile communications business, Samsung Electronics, Samsung is excited to see such a great response from developers for the Bada OS. We will roll out additional Bada based smartphones and continue to support Bada developers in making and marketing high quality applications.

The road ahead for mobile apps market is indeed exciting. Innovation and collaboration are happening on a regular basis like we see in instances like Aircel-Blyk among others. Vendors are just scratching the surface in India. As the market evolves further in 2011, mobile phone will be characterized by its ability to run a range of apps. Analysts like Gartner say that as smartphones grow in popularity and application stores become the focus for several players in the value chain, more consumers will experiment with application downloads. Games are the #1 application, followed by mobile shopping, social networking, utilities and productivity tools. These will continue to grow and attract increasing amounts of money.

Shrikanth G
shrikanthg@cybermedia.co.in