We have just published a research note with an update to last year’s an European App Economy report. The good news is that Europe’s app economy still accounts for 19% of global revenues and is growing strongly at a 12% annual rate. The bad news is that the rest of the world, particularly Asia, is growing much faster.
Car makers have started a major offensive to get more apps in their vehicles and open up to outside developers. Their efforts have sparked an interest in the developer community. “A year ago there was very little interest from mobile developers because the automotive market was perceived as being too insignificant”
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.
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 focussed on consumer apps for the foreseeable future.
Consumer apps are the focus for all the excitement and media attention in the industry. Enterprise software is dull and boring, right? Not if you care about making money! Besides, what’s so dreary about reinventing the way people work in a mobile and connected world?
“Wait”, I hear you cry, “what about BYOD and the consumerization of IT? Surely the future is all about selling computing tools directly to professionals?” Well the data from our last Developer Economics survey says that future isn’t here yet. In any case, if you’re going to collaborate with colleagues then you all need to be using the same tools, so most of the time the company still has to choose and buy them.
We asked developers which type of customer they primarily targeted from a selection of Consumers, Professionals, Enterprises, Other and Not Sure. Using this data we can compare the fortunes of developers serving each of those audiences.
The most popular revenue models appear to be those that are easiest to implement. The developers using them tend to have lower revenues. This may be due to greater competition or it might just be a result of less sophisticated app businesses producing less valuable apps. There are some interesting differences between platforms but subscriptions appear to be a relatively untapped gold mine everywhere, although maybe not for everyone.
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 make revenue with their apps. Considering all revenue sources, which categories of application are generating the most money and what’s the competition like on each platform?
Making money from your app is really difficult. Pricing is intuitively an important part of the potential of any app. Price too high, and you price yourself out of the market, but price too low, and you’re leaving preciously needed money on the table. Michael Jurewitz comes to the rescue! In a five part blog post series, the Apple veteran explains the ins and outs of app pricing, tackling crucial issues like differentiation, pricing power, price elasticity and a practical plan to optimise prices based on your app’s data.
Data from Apsalar’s Big Data Lab reveals the game categories with the highest propensity for in-app purchases. As it turns out, strategy games are more than 18x more effective at driving IAP than arcade games! In-app purchases are also strongly correlated with engagement (as measured by average daily session length). Yet another proof point that user engagement is a key ingredient in any app monetization strategy.
4 out of 5 developers admit that their app doesn’t make enough money to be considered a standalone business. 2 out of 3 doesn’t break even. And yet there is hope.
Advertising is the most popular revenue model, while ads can also act as a promotion channel that facilitates app discovery. With 100+ ad networks and exchanges, there is intense competition, regional specialisation and niche solutions, but out of the fray, one service emerges as a leader: AdMob.