This document provides a summary of the mobile app market and trends: - Mobile phones have become the 7th mass media platform due to their widespread adoption globally, with over 5 billion subscribers expected by 2011. - Smartphones now run full operating systems and allow third party applications to be downloaded, making the software more important than the hardware. - The mobile app market is dominated by Apple's iOS and Google's Android operating systems, though RIM, Microsoft and others still have shares of the market. - Constant hardware innovation and the emergence of new manufacturers from Asia is driving the development of new types of powerful yet affordable smartphones.

1. Mobile
Apps
State
of
the
Stores
Rick
Rasmussen
General
Consulate
of
Canada
Palo
Alto,
CA

2. Outline
• Worldwide
impact
of
mobile
phones
• Mobile
phones
are
computers
• Ba@le
of
the
operaAng
systems
• App
development
for
phones
• App
distribuAon
• App
stores
• So,
you
want
to
market
your
app?
• Trends
and
Metrics
2

3. Worldwide
Impact
of
Mobile
Phones
3

4. The
Seven
“Mass
Media”
1. Print
(books,
pamphlets,
newspapers,
magazines)
from
the
late
1400s
2. Recordings
(records,
tapes,
CDs,
DVDs)
from
the
late
1800s
3. Cinema
from
about
1900
4. Radio
from
about
1910
5. Television
from
about
1950
6. Internet
from
about
1990
7. Mobile
Phones
from
about
2000
4

5. Mobile
explosion
• World
populaAon
~7.0B
• Current
subscribers
2.6B
• End
2010
4.0B
iSuppli
• End
2011
5.2B
InfoneAcs
• In
2010,
phone
prices
as
low
as
$15
iSuppli
• Mobile
broadband
growing
at
110%
CAGR
InfoneAcs
• 577M
using
mobile
web,
1.7B
by
2013
Juniper
• 2.1B
users
will
“pay
by
phone”
by
2013
Juniper
5

6. Mobile
growth
6

7. Developing
countries
7

8. Developing
countries
8

9. Mobile
in
Developing
Countries
• Mobile
compensates
for
poor
infrastructure
– Bad
roads
– Slow
postal
service
• GDP
grows
by
0.8%
for
every
10
extra
phones
per
100
people
(world
bank)
• Mobile
payments
– Bypass
corrupAon
– More
efficient
movement
of
capital
– Kenya:
7M
users
in
a
38M
populaAon
base
9

10. Advent
of
the
‘smartphone’
• Feature
phone:
– Runs
apps
provided
by
carrier
– Includes
email,
internet,
keyboard,
PDA
funcAons
• First
model
“Simon”
from
IBM
1992
– Touchscreen,
stylus,
predicAve
input…
– Cool!
• Smartphone:
– Allows
downloads
of
new
applicaAons
from
carriers,
third
parAes
and
others
10

11. Global
Smart
phone
market
share
Total
2Q:
40.962
M
Annualized:
163.848
M
11

12. Global
smartphone
market
by
OS
12

13. North
American
smartphone
market
Source:
Gartner
Research
2Q09
13

14. Mobile
Phones
are
Computers
iPhone
3G
teardown
14

15. Phones
as
devices
• CommunicaAon
• InformaAon
• Entertainment
– Mobile
Content
• Phones
are
computers
– Increased
processing
power
– Increased
memory
– Increased
connecAvity
• Portable
operaAng
systems
are
enabling
technologies
• Sojware
more
important
than
hardware
– ApplicaAons
are
the
new
currency
15

16. The
Sensory
Phone
• Mobile
computers,
fully
aware
of
local
environment,
mimicking
human
senses
• Sight:
– SAll
and/or
video
camera
– Scanner
– High
resoluAon
display
output
• Sound:
– Audio
input
with
noise
correcAon
– Speech
recogniAon
– Hi-­‐fidelity
audio
output
• Touch
– Full
screen,
MulA-­‐touch,
MulA-­‐gesture
– HapAcs
(sensory
feedback)
– Proximity
sensors
– Accelerometers
– LocaAon
(GPS
and
LBS)
• Smell
and
Taste?
Soon!
16

17. The
Connected
Phone
• New
protocols
keep
devices
connected
• Wireless
WAN
– CDMA,
GSM,
3G,
4G,
LTE
• Wireless
LAN
– EV-­‐DO,
Edge,
WiFi,
WiMax
• Wireless
PAN
– Bluetooth,
UWB
• Mobile
TV
– ATSC,
DVB-­‐H,
ISDB-­‐T,
DMB-­‐T
• Wired
protocols
– USB,
Micro
USB,
Ethernet
• Wireless
charging
(soon)
17

18. Lots
of
new
touch
screens
18

19. New
emerging
players
• Hardware
is
changing:
– Many
new
entrants
designing
to
sojware
“standards”
– Korea:
• Samsung
• LG
– New
breed
of
Chinese
players
• Huawei
• HTC
• HTC
• Quanta
• TCL/Alcatel
19

20. Constant
Hardware
InnovaAon
iDon’t
Droid
is
a
3-­‐way
effort
between
Motorola,
Verizon
and
Google.
Slide
out
physical
keyboard
Verizon
(over
AT&T)
network
20

21. Ba@le
of
the
OperaAng
Systems
21

22. OperaAng
Systems
Opera&ng System Developer Source Availability
MENS
Proprietary
to
each
None
(although
some
code
(Motorola,
Erisson,
Nokia,
company
base
provided
to
Symbian)
Siemens)
Symbian
Symbian
FoundaAon
Closed
-­‐>
Open
Source
(9
companies)
Windows
CE
Microsoj
Closed
with
API
license
model
BlackBerry
OS
RIM
Closed
with
limited
licenses
Apple
OS
Apple
Closed
Android
Google
Open
Source
WebOS
Palm
Available
under
license
22

23. Basic
OS
comparison
Source:
engadget.com
23

24. Windows
Mobile
• Spinoff
from
Windows
CE
– Designed
to
bring
the
“Windows
Experience”
to
other
devices
– OS
intended
to
dominate
consumer
electronics
across
sectors
– Mobile,
Home
entertainment,
TV
and
Auto
• Licensed
to
handset
manufacturers
• C#,
C++,
CF
2.0/3.0,
SQL
CE,
etc.
• Slow
adopAon
by
third-­‐party
developers
– Dominated
PC
Apps
– Complacent
working
with
3rd
parAes
24

25. RIM
BlackBerry
• Based
on
strong
legacy
of
original
BlackBerry
• Strength
is
on
server-­‐side
integraAon
– Exchange
Server
– Professional
Apps
and
Services
• OS
used
on
their
own
hardware
as
well
as
licensees:
– AT&T,
HTC,
Motorola,
Nokia,
Qtek,
Samsung,
Siemens
and
Sony
Ericsson
• MDS
development
environment
end
of
life
– Apps
through
Java
via
Eclipse
– Microsoj
Visual
Studio
• Apps
sold
through
BB
Apps
store
as
well
as
mulAple
third
parAes
25

26. Symbian
• Symbian
on
50%
of
current
Smartphones
• Symbian
FoundaAon
(2008)
is
Nokia,
Sony
Ericsson,
NTT
DoCoMo,
TI,
Vodaphone,
ST
Ericsson
and
AT&T
• Legacy
tools
plus
C++
and
Java
SDKs
• 3rd
party
developers
only
now
being
courted
– Sony
Ericsson
store
– Ovi
Store
• Follows
open
source
model
and
will
have
Eclipse-­‐type
license
in
2010
26

27. Apple
iPhone
OS
• Based
on
Mac
OSX
(Linux)
– Released
v3.1
– Tight
integraAon
with
iTunes
(Win/Mac)
• Strong
SDK
for
third
parAes
– First
to
fully
release
hardware
funcAon
to
developers
• Almost
all
“lags”
are
gone
– MMS,
cut
&
paste
– Needs
be@er
Outlook
integraAon
• NaAve:
“Extensible
C ”,
strong
SDK
for
non-­‐
programmers
• 100,000
applicaAons
– 20%
games
– New
“virtual
goods”
market
– Apps
sold
through
Apps
Store
as
well
as
aggregators
27

28. Google
Android
• In
2005,
Google
acquired
Android,
a
small
startup
based
in
Palo
Alto
• In
November
2007
Google
announced
the
Android
plaxorm
– Open
Handset
Alliance,
now
at
30+
members
– Open
source
plaxorm
licensed
free
of
charge
to
handset
manufacturers
– Java-­‐based
for
rapid
app
development
and
deployment
28

29. Open
Handset
Alliance
• Companies working together to come
together to accelerate innova4on in
mobile and offer consumers a richer, less
expensive, and be;er mobile experience
– 10
Mobile
Operators
– 11
Handset
Companies
– 14
Semiconductor
Companies
– 11
Sojware
Companies
– 6
“CommercializaAon”
Companies
• Will
own
the
Android
source
and
make
public
under
Apache
v2
license
29

30. App
development
for
phones
30

31. Coding
Mobile
Apps
• Simple
downloads
and
SMS
• Web
Apps
(in
the
browser)
– Mobile
web
users
surpassed
PC
users
in
2008
– WAP
– Java
and
Flash
• NaAve
Apps
31

32. Issues
moving
web
apps
to
phone
• Small
screen
• Context
switching:
lack
of
windows
• NavigaAon
and
filling
in
forms
• Memory:
Lack
of
JavaScript
and
cookies
• Accessibility
for
secure
communicaAons,
flash,
pdf,
video…
• Variable
Speed
and
response
Ames
• Web-­‐based
apps
may
lack
access
to
hardware
resources
32

33. Third-­‐party
development
33

34. ApplicaAon
distribuAon
34

35. Early
2000
Mobile
Value
Chain
Device
ApplicaAon
Sales
Carrier
Customer
Vendor
Provider
Channel
Carrier-­‐centric:
All
about
gezng
the
deal
with
the
carrier
35

36. Carriers
as
“new
media”
• Carriers
were
looking
to:
– Be
media
companies
– Control
content
distribuAon
– Get
closer
(in
some
cases
own)
content
creaAon
• Ringtone
Business
– Juniper
esAmates
$3.2B
ww
in
2003,
10%
of
all
ww
music
sales
– By
2008,
declined
to
$1B
ww
• Gaming
Market
– Est
$6B
in
2007
– 90%
on-­‐deck,
10%
off-­‐deck
and
adverAsing
36

37. 37

38. On-­‐deck
vs.
Off-­‐deck
• On-­‐deck:
– Phones
shipped
with
applicaAons
pre-­‐loaded
– Companies
rose
and
fell
with
“carrier
deals”
• A
deal
with
one
or
two
operators
could
get
you
funded,
go
public,
get
acquired
– Phone.com,
Infospace,
Jamdat
• Developers
benefit
from
markeAng
and
promoAon
channels
• Smaller
profits
but
higher
gain.
• Off-­‐deck:
– Carriers
look
to
sell
“add-­‐ons”
– Advent
of
alternaAve
distribuAon
in
2006/7
• Mobile
ads
from
Admob,
Nokia,
Google,
Jumptap
• Appstores
such
as
Getjar.com
or
Handmark.com
– Open
doors
for
mobile
startups
38

39. Content
Value
Chain
39

40. App
Stores
40

41. Carrier
App
Stores
Online
Today
• US
Carriers
– AT&T
– Verizon
– T-­‐mobile
– all
others
• Canadian
Carriers
– Bell
– Rogers
– Telus
– Sasktel
• Japanese
Carriers
– NTT
DoCoMo
– KDDI
• Korean
Carriers
– SK
Telecom
(T-­‐Store)
– KT
– LG
Telecom
• Chinese
Carriers
– China
Mobile
– China
Telecom
– China
Ubicom
• Plus
Europe!
41

42. iTunes:
Apple’s
App
Store
42

43. App
Store
• Launched
July
2008
• Phenomenally
successful
– Turned
distribuAon
on
it’s
head
– Put
developers
in
direct
control
• 125,000
in
iPhone
Developer
Program
• 100,000
applicaAons
today,
2B
downloads
43

44. Apps
by
Category
44

45. Loyalty
and
Churn
45

46. 3rd
party
App
Stores
Online
Today
• Phone
Manufacturers
– Apple
App
Store
– RIM: BlackBerry App World
– Nokia
Ovi
Store
– Palm
and
Web
OS
– Samsung
ApplicaAon
Store
(UK,
France,
Italy
only)
• OperaAng
Systems
– Symbian:
Symbian
Gear
– Window
Mobile
(Pocket
PC
vs.
SmartPhone
Apps)
– Google Android
• Android Game Pro (games only)
• Androlib (10K apps)
• Third
Party
App
Stores
– Handango
(Windows
and
BB)
– MobiHand
(Windows
and
BB)
– Pocketland
(Windows
only)
• 3rd
party
aggregators
– AppMiner
– Appstore
HQ
– Appshopper
• InternaAonal
46

47. RIM
Blackberry
App
World
• 2,000+
total
apps
– 1000
freeware
– ASP
$5
to
$10
• Slow
to
market
– IniAally
announced
in
Nov
2008
– Live
on
phones
April
09
• Requires
separate
download
– Web
catalog
online
Aug
09
• No
purchase
opAon
• Competes
with
third-­‐party
soluAons
from
Handango
and
Mobihand
47

48. Android
AndroLib.com
• 14,000
games
and
applicaAons
(counts
duplicaAons
across
mulAple
languages)
• 2500
added
monthly
• Majority
free:
36%
paid
• Website
features
barcodes
for
phone,
scan
and
buy
from
phone
48

49. China
App
Stores
• China
Mobile
– 600M
total
subscribers
– “Mobile
Market”:
1000
apps
for
Symbian,
Windows
Mobile
and
Android
– Working
on
new
Open
Mobile
System
(OMS):
Android
plus
proprietary
extensions
• China
Telecom
– App
Store
in
development
– May
distribute
Palm
and
Blackberry
in
future
• China
Unicom
– 140M
total
subscribers
– App
Store
in
development
– Rumored
talks
with
Apple
re:
iPhone
• Barriers:
– Billing
issues
– Availability
of
pirated
applicaAons
online
– Low
demand
49

50. Revenue
and
QualificaAon
• Varies
by
plaxorm:
– BB
=
Business
– Apple
=
Consumer
– Android
=
Hobbyist
-­‐>
Consumer
• Shared
between
store
and
developer
– Apple:
30%
to
store,
70%
to
developer
• QualificaAon
process
can
vary
widely
– Carriers,
deal
required
– Apple,
strict
release
policy
with
“gated
qualificaAon”
and
high
barriers
on
content
types
– Android
“quality
built
into
the
tools”
– Third
party
stores
vary
but
generally
“Caveat
Emptor”
50

51. So,
you
want
to
market
your
app?
51

52. General
App
Types
• Free
– Quick
and
dirty,
usually
done
for
fun
or
self-­‐promoAon
• Short-­‐term
revenue:
i.e.
$0.99
– Simple
“cute”
apps
– Simple
handy
apps
– Short
term
download
“spikes”
– Supplemented
by
ads/sponsorships
• Serious
Apps:
$2.99
to
$9.99
– Includes
professional
and
games
– Higher
uAlity
(i.e.
social
gaming)
– Polished
and
have
longevity
“sAckiness”
52

53. Dynamics
of
Apple’s
“ Top
25”
• Separate
lists
for
Free
and
Paid
• A
lisAng
here
gets
huge
response
lij
53

54. Driving
Short-­‐Term
Revenue
“Top
25”
• Develop
fast,
release
ojen
• $0.99
is
right
unless
you
can
jusAfy
otherwise
• A
nice
icon
and
smooth
descripAon
• Self-­‐promote:
Twi@er,
Facebook,
etc.
• Partner
for
success:
Gang
up
with
other
developers
and
co-­‐promote
• Are
blogs
important?
Opinions
differ
Source:
TechCrunch
8.29.09
54

55. Emerging
Revenue
Models
• “Freemium”
– IniAal
download
is
free
– Version
may
run
for
limited
Ame
or..
– Pay
to
upgrade
to
versions
with
more
features
• “Free
to
Play”
– Micropayments
– In-­‐game
transacAons
(open
up
new
stages/worlds)
– Virtual
goods
(avatars,
weapons,
etc)
• Increasing
push
toward
adverAsing
and
product
placement
55

56. Trends
and
Metrics
56

57. Mobile
Download
Trends
• More
than
90
percent
of
Android
and
iPhone
OS
users
browse
and
search
for
apps
directly
on
their
mobile
device
instead
of
their
computer
• Average
downloads:
– 10
per
month
for
Android
and
iPhone
– 18
per
month
for
iPod
touch
iPod
touch
owners
• Paid
apps
– Users
who
regularly
download
paid
apps
spend
approximately
$9
on
an
average
of
five
paid
downloads
per
month
– iPhone
and
iPod
touch
users
are
twice
as
likely
to
purchase
paid
apps
than
Android
users.
– Upgrading
from
the
lite
version
was
the
top
reason
given
when
users
were
asked
what
drives
them
to
purchase
a
paid
app
57

58. Average
Downloads/month
58

59. “Flight
Control”
Story
• Flight
SimulaAon
program
by
Firemint
• Hit
#1
in
sales
at
launch
March
28,
2009
• Took
approx
3
man-­‐
weeks
to
develop
(nights,
weekends)
• Over
1.5M
sold
at
$0.99
• Word
of
mouth
and
blog
campaign
59

60. Daily
Sales:
#1
iPhone
App
60

61. Sales
per
country
61

62. Some
hot
new
areas
• Mobile
dev
tools
• Mobile
metrics
and
moneAzaAon
• Mass-­‐publishing
– Huge
“app
shops”
– Aggregators
pushing
numbers
to
gain
top
25
• Cross
plaxorm
– AutomoAve
app
stores?
– Ford
has
Microsoj
Sync
– Google
flirAng
with
BMW
62

63. Where
to
go
for
more
info…
• General
Blogs:
– www.mobilecrunch.com
– www.venturebeat.com
• Vendor-­‐specific
Blogs
– googlemobile.blogspot.com
– androinica.com
– theiphoneblog.com
• New
Media
BC
• Wavefront
Accelerators
• Wireless
CommunicaAons
Alliance:
wca.org
63

64. Thanks
for
your
a@enAon
rick.rasmussen@internaAonal.gc.ca
64