Mobile application markets have grown significantly due to increased use of mobile devices and advances in mobile technology. As mobile commerce expands, the size of the app market is expected to grow exponentially. There are now thousands of apps available across various app stores and mobile platforms, with total industry revenues estimated to reach $27 billion by 2013. While Apple currently dominates the market, analysts predict its share will decrease to 15% by 2015 as third-party app stores capture a larger portion of sales.

1. MOBILE PLATFORMS Submited By: Nihit Jain (06AG3802) Prateek Kumar Jain (06AG3806) eJains

2. Mobile Applications Developments in mobile handset technology and use of mobile devices by consumers have made mobile application market consumer-oriented, global in scope and device-dependent. Mobile commerce takes off, the size of the market will increase exponentially because of network externalities. Research companies see mobile commerce developing significantly in the future. The rollout of 3G and 4G mobile services vastly increases the data transfer rate and therefore the variety of services that can be provided on a mobile device.

3. New technologies permit mobile phones to be used as payment devices not only for virtual but also real-world shopping. New services, such as mobile digital television, location-based services and integrated financial services, are being offered by many market players. The cross-border use of mobile handsets for mobile commerce also has huge potential.

4. Categories:

5. Mobile Applicaitons Three types of applications: Free, Paid, Ad-supported. Each app is different for different platforms. There are about a total of over 1 billion apps. Estimated earnings of app industry in 2010 was $4 billion and is estimated to grow to $27 billion till 2013.

6. Different Mobile OS Source: http://www.gartner.com

7. Business Model Native or on deck - operators, mobile device manufacturers, and Operating System (OS) developers managed Third party or off deck- independent or third-party managed

8. App Stores - Native Name Established Owner Available apps Device platform Developer's cut per sale Developer fees Android Market October 22, 2008 Google 300,000 (Mar 2011) Android 70% US$25 App Catalog June 6, 2009 Palm/HP 6,405 (Mar 2011) webOS 70% Free App Store July 10, 2008 Apple 350,000 (Jan 2011) iOS 70% US$99/year App World April 1, 2009 RIM 16,121 (Dec 2010) BlackBerry OS 70% US$200/10 application submissions Ovi Store May 26, 2009 Nokia 43,535 (Oct 2010) Multiple (Symbian, Java, Maemo) 70% 1 € (plus possible certification costs) Windows Phone Marketplace October 21, 2010 Microsoft 12,023 (Mar 29 2011) Windows Phone 7 70% US$99/100 application submissions

9. Third Party Name Established Organizations Available apps Device platform Developer's cut per sale Developer fees Amazon Appstore March 2011 Amazon.com 3,800 (March 2011) Android 70% US$99/year AppsLib August 2009 AppsLib, Archos 445 (October 20, 09) Android 70% Free MobileRated 2006 Kalador Entertainment 55,000 (December 2010) Multiple Android, BlackBerry OS, Java N/A Free Handango 2000 PocketGear 190,000 Multiple Android, BlackBerry OS, Java, Palm OS,PSP, Symbian, Windows Mobile ≈ 42% Free explorePDA.com 2004 explorePDA 1,500 Multiple Android, BlackBerry OS, iOS, Java, Palm OS, Symbian, webOS, Windows Mobile 75% Free MobiHand 2004 MobiHand, Inc. 5,000 (June 3, 2009) Blackberry, Palm, Symbian, Windows Mobile and Android 60-80% Free PocketGear 1999 PocketGear 140,000 (June 2010) Multiple Android, BlackBerry OS, Java, Palm OS, Symbian, Windows Mobile ≈ 55% Free SlideME April 2008 SlideME 1,860 (July 21, 2010) Android ≈ 95% Free

10. GetJar Business Model Third Party App Store; 70,000 applications. Sells only free version of apps. GetJar generates its revenue from a 'pay-per-download' system, where developers bid for ad slots on the store in order to get premium visibility, paying GetJar when downloads are made. The company is backed by venture capital fund Accel Partners, and closed its US$11 million Series B funding round in June 2010 – at this time, it was said that the company had “maintained its profitability despite a challenging economic environment.”

11. Apple App Store Launched in July 2008, in the first year, app store of apple made an estimated gross profit of about $180 million. (Source: http://news.cnet.com/8301-13579_3-20008540-37.html ) In 2011, app store’s revenue is estimated to reach to $2 billion. ( http://www.greatereader.org/?p=8933 ) Similar to the iTunes business of apple, the main focus of app store is promoting hardware sales rather than generating profits.

12. Google’s Revenue from Android Market Source: ( http://phandroid.com/2011/02/21/in-one-year-android-market-revenue-grows-a-remarkable-862/ ) $ (in million)

13. Presently, 60% of the market share is held by Apple app store. The entry of new independent third party (off deck) stores will increase the market share of off deck stores. By 2015, the market share of apple will decrease to 15% and majority of the market share would be taken by third party stores. Source: Markets and Market Research, 2011

14. Market Share of App sales Revenue for 2010

15. Revenue distribution:

16. PEST Analysis

17. Porter’s Five Forces Threat of New Entrants: Moderate high Barrier created by industry giants. Threat of Substitutes: Low as there is no substitute in the market to sell apps. The App developers at the most can sell the apps on their own websites.

18. Porter’s Five Forces Buyer’s Power: Moderate There are many similar apps and if a buyer feels that he / she is not getting value for money, the buyer could go to another store to buy a similar or same app. Certain OS providers such as Apple can restrict the availability of apps on other stores.

19. Porter’s Five Forces Supplier’s Power: Moderate The supplier here is the app developer The developer would like to go to that app store where his cut is maximum and fees is least. But he would like to go to those app stores which are more famous to maximize his sales.

20. Porter’s Five Forces Industry Rivalry Moderate The same apps are available at many app stores, increasing the competition. In native business model, different mobile OS decreases the competition.

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