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Should Automakers Build App Stores?
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Should Automakers Build App Stores?

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  • 1. APPS 4 CARS GENIVI All Members Meeting April 25, 2012 Ludovic Privat 1
  • 2. AutomotiveWireless Consumer Electronics 2
  • 3. Automotive Automotive AppsWireless 3
  • 4. Topics of the day• App Store economics• What App Strategy for Car Makers? • Should you build an app store? • If not what to do? 4
  • 5. App Store Economics•Choice• Volume• Price (low) 5
  • 6. Choice NB of downloads NB of Apps550,000+ Applications on Apple App Store 6
  • 7. Volume 7
  • 8. Low price• Current average app price: $2.02• Current average game price: $1.02• Current average overall price: $1.88 Apple App store - April 2012 Source: 148apps.biz 8
  • 9. Low price Free $0.99 $1.99 $2.99 $3.99 $4.99 $5.99 & up46.43% 25.77 %10.73 % 5.15 % 2.59 % 2.93 % 6.4 % Percentage of app in each price category Apple App Store (April 2011) Source: 148apps.biz 9
  • 10. Low price • U.S. consumers who have never paid more than $1 for an app: • iPhone owners: 45% • Android owners: 62% • Blackberry owners: 63%TeleNav survey - 1,000 respondents (Aug 2011) 10
  • 11. Auto appsHow much would they pay (US)? 11
  • 12. Auto appsHow much would they pay (UK)? 12
  • 13. Auto appsHow much would they pay (Ger)? 13
  • 14. App Stores Revenue• Apple app store • 550,00 Apps available, 25 Billion Apps downloaded until March 2012 • $4 Billion paid to developers (to date); $2.1Billion paid in 2011 • Average revenue: $0.16 / app• Google app store • 400,000 Apps available, 10 Billion Apps downloaded (Dec. 2011) • Google Play (Android Market) is said to be 23% of iOS revenue per active user.• In-app advertising • Estimated at around $200-$300 million in 2011 14
  • 15. App Stores Revenue 2011 $4B 15
  • 16. App Store failuresHandset Maker Operator 16
  • 17. Long term model?• One closed garden replaces another • From wireless operator’s lock-up to Apple/Google Lock-up• New forces: • Competing stores on Android (Amazon, GetJar & others) • HTML 5 apps, mobile payment 17
  • 18. In-car Apps 18
  • 19. In-car App flavoursBuilt-in Beamed-in Brought-in 19
  • 20. Are Car Manufacturer’sApp stores sustainable? 20
  • 21. Mobile industry 480 Million smartphones sold in 2011 2 dominant platforms: iOS & Android Large addressable marketConsumer interest developer interest Choice Developers are21 the real currency
  • 22. Car industry 60 Million passenger cars sold in 2011 large fragmentation per brand Small addressable market Little developerNo consumer interest interest Little Choice 22
  • 23. Wireless innovation speed• Smartphone & tablets are becoming powerhouses: CPU, GPU, Sensors• Product & innovation cycles are extremely fast, driven by intense market competition• In contrast car life cycle remains pretty stable 23
  • 24. Consumer interest for in-dash app stores?• Likely to be seen as duplication of their smartphone apps• High cost of ownership (connectivity cost) • limited success of connected PND (25-30% of subscription renewal) demonstrates driver’s unwillingness to pay for another subscription 24
  • 25. Built-in app store? 25
  • 26. App opportunities for car makers 26
  • 27. Which apps?• Lifestyle apps: Internet radio, Twitter, Facebook, etc.?• Driver apps: navigation, traffic, weather, etc.?• Vehicle apps: eco-driving, remote door opening, tracking, monitoring, etc.? 27
  • 28. Key opportunities• Focus on core competency: vehicle centric value-added services• Piggyback on driver data plan when possible• Big data opportunity about car knowledge (parts, etc...)• Big data opportunity on driver knowledge (driver behaviour analytics)• Extended customer relationship over the full lifecycle of the car• B2B monetization opportunities with third parties: insurance companies, car part suppliers, etc... 28
  • 29. Key takeaways• App market is tough business• Don’t fight a lost battle against wireless industry giants• Monetize opportunities based on vehicle- centric core competencies 29
  • 30. Thank you!ludovic.privat@gpsbusinessnews.com +33 6 22 05 61 38 Twitter: @gpsbusinessnewshttp://www.gpsbusinessnews.com 30

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