Mark Wilcox, Author at SlashData Blog

Android First is the New Normal

The mobile platform landscape was fairly stable for more than two years. Having both won the platform wars, Android and iOS seemed quite settled into their market positions. Android selling the most units in every market, but with iOS taking a dominant share of the lucrative high-end. Similarly, Android’s greater developer mindshare was always counterbalanced by iOS developers making the most revenue, and iOS being the primary platform for more full-time professionals. In the last six months we’ve seen a very significant shift on that last point. Apple will now have to work extremely hard in the next few years to avoid giving up further ground.

Why developers are prioritising Android

Towards the end of 2013, Steve Cheney wrote a very widely-read post on Why Android First is a Myth. We wrote a response at the time highlighting the strong silicon valley bias that made the conclusions doubtful, but also confirming with our data that, at least, professional developers were quite heavily prioritising iOS. In 2014 we heard that Android first was a fallacy – the user base might be there but fragmentation, plus inferior documentation and tooling, would make it a poor trade-off for many. In 2015 debate on the topic continued while our data showed Android gradually winning the priority of professional developers from other platforms, but not iOS. We entered 2016 with Android marginally ahead: 40% of professional developers globally prioritised the platform versus 39% for iOS. That seems to have been a tipping point, with our latest survey showing a large shift from iOS to Android. A massive 47% of mobile developers now tell us they consider Android most important, while preference for iOS has slipped to 31%.

The reasons for this shift are many but related. The fastest growing regions in terms of mobile developers are those dominated by Android already. New mobile developers are increasingly choosing Android first in all regions. Existing developers are shifting their priority to Android because the types of app they build are changing. We’ve been highlighting for some time that the app economy is shifting away from direct monetisation of apps, to using apps as a channel for some other business. Mobile commerce is by far the largest and fastest growing (at least in terms of total revenues) part of the app economy. Demographics still matter – users of iOS spend more on real-world goods and services through each device than Android users. However, unlike with downloads and in-app purchases, the difference is nowhere near enough to make up for Android’s larger user base.

Leveling of the playing field

For startups trying to find product-market fit, and enterprises needing to deploy across multiple platforms, a key reason to build on iOS first has been the ability to get to market faster. Android had more relaxed deployment policies and much faster publishing cycles, but it was was easier to develop higher quality apps for iOS. The most critical area in this regard has been the UI. Historically iOS had a few fixed resolutions and higher quality APIs for UI development. Android had a vast array of screen resolutions and aspect ratios, and fairly basic abstractions for dealing with that complexity. However, with the launch of the iPhone 6 and 6 plus in 2014, along with split screen mode for iPads in 2015, Apple has forced iOS developers down a scalable UI path as well. Once the UI of an app has to adapt to multiple resolutions dynamically, the complexity isn’t significantly increased by having to work with many more resolutions (maybe in testing but not in development). So iOS development has become harder, whilst Android has had time to mature their UI APIs, providing support libraries to reduce fragmentation across operating system versions.

The other area where a major Apple advantage has been eroded is in the design of app interfaces. Both Apple and Google moved towards a flatter and more minimalist style, which shifts the emphasis towards animation as the way to both give an interface personality and help users to understand it. Apple’s approach has been to show rather than tell, and leave artists to create, while Google has provided extensive guidance to developers on how to implement their Material Design. The latter has been favoured by many developers that don’t want completely custom UIs deciding to design for Android and adapt that for iOS, where the reverse was previously the case.
Apple isn’t doomed just yet
It’s important to note that mindshare for iOS is still within the range it has occupied for the last few years at 52%. Developers are not abandoning the platform. Shifting developer priorities towards Android are quite a long-leading indicator for device sales, and Apple are already making big moves to counter this trend. Swift is a boost to iOS developer productivity. Cutting app review times increases iteration speed. Apple Pay on the web gives iOS a greater advantage in the booming mobile commerce market.

The danger for Apple is if Android first becomes firmly established as the new normal. If some of the best apps and services come out on Android first then some of the early adopters will start to migrate. Where the early adopter user base goes, other users and the cool startups will follow. Without an app ecosystem advantage, Apple would become almost entirely dependent on hardware differentiation to maintain a price premium. This battle is far from over but Apple will be working a lot harder to keep developers focused on iOS than they have in the past.

The tip of the iceberg

We’ve just taken a deep dive into one interesting trend in the mobile developer ecosystem, there’s more going on with the mobile browser and Windows 10 too. We also have the latest trends from desktop, cloud and IoT, as well as new insights into augmented and virtual reality, plus data science and machine learning. Our State of the Developer Nation Q3 2016 report is filled with interesting trends as seen by 16,500+ developers across 145 countries.

Get it here

What gets desktop developers out of bed in the morning?

Despite all the hype around the death of the PC and the enormous amount of media attention focused on mobile, cloud and IoT, the humble desktop is still the biggest part of the developer economy. There are more professional developers working on desktop applications than any other sector. There’s also more revenue in desktop development. It’s understandable that the media focuses on the exciting growth areas and no-one is arguing that the desktop is likely to make a major comeback. However, while there are still significant quantities of both users and revenue on the desktop there will be developers creating new software for it. While those developers are still adding enough value for the users, the users will stick around. Will those developers still building for the desktop stay loyal to their platforms, or be tempted away into exciting new growth areas? The answer will depend on individual developers’ goals and motivations.

There being enough money to pay developer salaries, in any area, is obviously a very important factor. Even in gaming, where mobile revenue has grown at an astonishing rate in recent years, the desktop still accounts for more than a quarter of revenues. In the enterprise software market, which dwarfs gaming at well over $300 billion annually, desktops still account for the majority of the revenue, with cloud-based software and services gaining fast. Then we have e-Commerce, which in total is likely to approach $2 trillion this year. Mobile devices are rapidly eating into and expanding this market but they’re still only just over 30% of transactions and closer to 20% of revenue. However, although this looks healthy for the desktop currently, the growth trajectories will encourage a lot of developers to move towards mobile or cloud services development in medium term. Even so, our research says that money is not the most important thing for desktop developers.

Individual developer goals, motivations, and success metrics vary significantly and some do put revenues first. Many more developers measure their success by the knowledge gained, or users reached, ahead of revenue or cost savings. Opportunities to learn and reach users should remain plentiful on the desktop for some time. Steve Jobs made a great analogy as he predicted the beginning of the post-PC era:

“I’m trying to think of a good analogy. When we were an agrarian nation, all cars were trucks. But as people moved more towards urban centers, people started to get into cars. I think PCs are going to be like trucks. Less people will need them.”

The desktop PC isn’t going away any time soon and the enormous developer economy based around it isn’t either. Although there are far more cars than trucks today, the trucking industry is still worth hundreds of billions of dollars. Also, new technologies may reach serious commercial scale on trucks before cars. Autonomous trucks platooning are likely to be widely deployed long before consumer transport in autonomous cars. The economics of electric vehicles also makes even more sense for trucks than it does for cars. Similarly, although Virtual Reality (VR) will probably go truly mass market via mobile devices, the early market is likely to be dominated by PC-based VR systems. Developers wanting to push forward the latest cloud technologies in the enterprise will find their audiences demand desktop (at least web) clients on the front-end, with mobile currently more of a bonus than an absolute must-have feature in many cases.

Anyone interested in the ongoing survival and health of the desktop platform needs to understand the developers that are building for it and why they do so. Those that want to tempt developers away from the largest ecosystem to exciting new ones also need to understand what motivates those developers. VisionMobile’s latest Desktop Developer Segmentation 2016 report applies our proven segmentation model to the world’s largest developer talent pool. The report is based on data from our 10th edition Developer Economics survey, which ran in October-November 2015 and reached more than 17,000 desktop developers in over 150 countries, of which over 2,500 answered detailed questions on their desktop development work. We use this data to generate a wealth of insights about desktop developers: What drives them? What else are they working on? What languages, platforms, and tools do they use? What categories of application do they build and how much money do they make?

App developer trends Q1 2015

Our 8th Developer Economics survey has once again achieved an industry-leading scale, including responses from more than 8,000 app developers and 143 countries. Their collective insight shows us an app economy that’s beginning to mature. Platform mindshare and priorities are fairly stable and developers are increasingly turning to cross-platform technologies to deal with the multi-platform reality. Tool adoption is gradually increasing and a shift in focus towards enterprise app development is underway. You can get a copy of the full report here – it’s a free download.

The big changes on their way are in development languages and the Internet of Things. Apple’s new Swift has had an impressive level of uptake but C# and JavaScript are also growing in importance. Meanwhile mobile developers are showing a very strong interest in the next wave of connected devices.

Platform Wars
The platform wars have ended in a stalemate. [tweetable]Apple have an increasing lock on the high-end with iOS and Android dominates everywhere else[/tweetable]. Windows Phone is still growing, now at 30% mindshare, but not generating enough sales to break through the app-gap. The split of developer platform priorities amongst full time professionals best illustrates the stalemate. Android has 40% of developers, iOS has 37%, whilst Windows Phone and the mobile browser have just 8% and 7% respectively.

Although not yet a priority the mobile browser has also bounced back strongly from an all-time low in terms of mindshare 6 months ago, with 25% of developers now supporting it. With the massive growth of mobile apps it’s important to remember that the desktop and mobile web combined is still the most important digital channel for the majority of businesses. [tweetable]The web is definitely not dead[/tweetable].

The Rise of Swift
Our development language rankings show absolutely unprecedented growth for Apple’s new Swift language. [tweetable]20% of mobile developers were using Swift just 4 months after it was introduced[/tweetable] to the world. For comparison, Google’s excellent Go language doesn’t make it onto our new top chart for server-side programming languages, having reached just 5% mindshare amongst mobile developers after more than 5 years. [tweetable]Amongst the first wave of Swift adopters, 23% were not using Objective C[/tweetable], a sign that Swift may succeed in attracting a much wider range of developers to build native iOS apps.

Revenues
Growth in direct revenues from the app stores is slowing. As these direct revenues are preferred sources of income for the Hobbyists, Explorers and Hunters that make up around 60% of the mobile developer population, competition for them is becoming more intense. 17% of developers who are interested in making money generate no revenue related to apps at all. A further 18% of developers make less than $100 per month and the next 17%, bringing us to a total of 52%, make less than $1000 per month.

Those low revenue earners are not at all evenly distributed across platforms. Of those that prioritise iOS, only 37% are below the app poverty line, making less than $500 per month on iOS. On the opposite end of the revenue scale, 39% make more than $5,000 per month on the iOS platform. Rather surprisingly, the revenue distribution for Android-first developers is not much different than for those targeting BlackBerry 10 or Windows Phone. In fact, developers that go iOS first actually earn much more revenue on Android than those that prioritise the platform.

Internet of Things
Despite the relative immaturity of IoT platforms, mobile developer interest is high. A massive [tweetable]53% of mobile developers in our survey were already working on some kind of IoT project[/tweetable]. Smart Home was the most popular market with 37% of mobile developers working on IoT projects targeting it. Wearables were a close second with 35% mindshare. The majority of these mobile developers involved in IoT development are doing it as a hobby (30% involved at this level) or side project (just under 20%), whilst working on mobile apps in their day job. This is expected at this stage of the market where revenue opportunities are still limited.

Tools
Tool awareness is increasing. The fraction of developers not using any third party tools at all has fallen to an all time low of 17%. The second most popular category of tool is ad networks, with a 31% adoption rate. Unfortunately this is the one category of tool that’s negatively correlated with revenues. Cross-platform tool adoption is on the rise. The percentage of developers using these tools has grown from 23% to 30% over the last 6 months. While cross-platform tool use was previously uncorrelated with revenue it’s now a positive revenue indicator. We don’t believe this is due to a significant improvement in the tools, rather it’s because of their disproportionate use in enterprise app development.

Enterprise vs. Consumer
The enterprise app gold rush is now well underway with 20% of developers primarily targeting enterprises, up from 16% in Q3 2014. This shift in focus is paying off. [tweetable]43% of enterprise app developers make more than $10K per month[/tweetable] versus 19% of consumer app developers reaching the same revenue level.

Amongst consumer app businesses, the majority of the revenue is coming from free-to-play games. A typical game is giving a third of gross revenue to the app store provider as a cut of in-app purchases and spending half of what’s left on ads to acquire new users. These game developers are starting to look more like typical fast moving consumer goods businesses, with significant benefits from scale. Despite overall revenues from the stores still rising, life is getting much harder for the small independent developers that try to serve consumers.

The good news for consumer app developers is that 3 of their top 5 favourite categories are common with enterprise app developers. It’s definitely not too late to re-focus on B2B rather than B2C sales. Also, the skills developed building consumer apps are in greater demand than ever now that more and more businesses are taking mobility seriously. This is a trend that will keep running for several years yet.

Want more? Download and read the full report

Can the app stores sustain 5.5 million developers?

In our latest report, App Economy Forecasts 2015 – 2017, we estimate the number of mobile developers in 2014 at 5.5 million. Demand for mobile development skills has never been higher and yet revenue from app store sales cannot possibly pay their salaries. Luckily they don’t have to as developers aren’t all building apps full time and there are several other revenue sources in the app economy, some of them comparable with or even significantly larger than the app stores.

Estimating the developer population

Counting mobile developers is hard. A lot of software developers look into mobile platforms and a lot of people are curious enough about how they’d make an app for their phones that they’ll try to find out. We can’t meaningfully count all of these as mobile developers. However, we also know from our Developer Economics surveys that a huge percentage of developers creating the apps that fill the app stores are not full-time professionals. Popular programming Q&A site StackOverflow has around 35 million unique visitors and it is only an English speaking community. That probably includes a lot of students trying to get help with their coursework. Meanwhile bottom up estimates for the global professional developer population based on job classification data from multiple sources are just under 20 million. This is highly error-prone due to the way developers are classified along with other IT professionals in many places around the world. How many of those are really building mobile apps anyway? Apple has over 9 million developers registered on their developer portal. Some of those are for Mac and Safari but the majority are iOS developers. Then again, the number of developer accounts with any apps published on the App Store for iOS is only around 350,000. Google Play has fewer active publishers than iOS. The truth must lie somewhere between these extremes.

For the purposes of our estimate we decided to count developers who are actively building, or planning to build in the very near future, publishable apps for a mobile platform. Students building toy apps to learn and hobbyists who only build things for themselves aren’t taken into account. Those people could join the ranks of mobile developers in the near future but they aren’t doing anything to satisfy mobile app demand yet. 5.5 million is the number of developers required to maintain all of the published apps that have been updated in the last 12 months, plus build all of the new ones released in the same period. In our report we also forecast the number of new and updated apps going forward and the number of developers required to sustain that app growth through 2017.

Keeping the pizza and coffee flowing

Developers are in high demand and as employees in the US they will typically earn upwards of $100k per year with relatively little experience. Proven talent in Silicon Valley can easily earn 50-100% more. Salaries in Western Europe are not quite as eye-catching but not that far behind either. In countries where the cost of living is much lower, developer salaries are obviously more modest but actually often a greater multiple of the national average wage.

Why would anyone with such earning potential build and sell apps that are likely to produce a poor return on their time. There are several answers:

Some apps make fantastic returns and some developers believe, or at least hope, they could emulate those and use their skills to make a small fortune
Other developers are trying to build small but sustainable businesses on the app stores, targeting niches and working as artists and entrepreneurs
Some developers build their own apps as proof of their abilities in order to sell their skills for a higher rate on contract development work
Many developers just love to code and already earn a full time salary in their day job, they build apps as side projects or for a hobby, either for fun, a little extra income or to sharpen their skills for their next career move
Some developers are purely learning and having fun, usually either at the beginning of their careers and in some cases after they’ve retired.

Note that only the first two of these are depending on the apps for income. Of course not all developers are trying to make a return from apps via paid downloads or in-app purchases. Advertising is also a big source of revenue in the app economy, although most of it goes to a few giant corporations. The typical developer monetising through ads does much worse than those using in-app purchases, so that’s not the answer. However, there are other models where developers have better odds of making money. Subscriptions are the fastest growing revenue opportunity according to our forecasts, although for pure Software as a Service rather than content subscriptions that will mostly be selling to enterprises. The biggest revenue opportunity of all in app economy over the next few years is definitely not in pure software businesses. Indeed, it’s the rather old-fashioned business of selling real physical things! Find out just how big it is by purchasing our latest report.

The European App Economy 2014: Europe is losing ground to Asia

We have just published a research note with an update to last year’s an European App Economy Research Note. 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. The global app economy is growing at 27% annually and the share of revenues captured by developers in the EU is falling. We estimate that [tweetable]around 1 million European jobs have been created by the app economy so far[/tweetable]. If policymakers want to see this job creation continue then there’s a lot more they could do to support developers attempting to create businesses.

A $16.5 billion market

In our App Economy Forecasts 2013-2016 report we estimated that apps and app related products and services would generate $86 billion in revenues globally in 2014. The 19% share of this generated by European developers will contribute $16.5 billion to EU GDP this year. This is many times more revenue than is generated directly in the app stores. However, the EU is home to the top 2 app store earners globally in Supercell (Finland) and King (UK) – masters of the Free-to-Play games market. At the same time, European policymakers are some of the most vocal in attempts to enhance consumer protection with respect to the Free-to-Play model. So far there is only strong encouragement to reform practices around cost transparency but this could (justifiably) lead to regulation if insufficient voluntary action is taken. Significant changes in this area would undoubtedly impact the revenues of Europe’s most high profile app market success stories.

1 million jobs

We estimate that the number of direct European app economy jobs is up 26% from 2013 to 667,000, this breaks down as 406,000 professional developers and 261,000 non-technical roles in app-related business. Using a conservative multiplier we also estimate another 333,000 jobs have been created indirectly by the app economy in the European Union for a total of 1 million jobs. A large fraction of these jobs are in software services companies taking the low risk route to profitability building apps on a contract basis. [tweetable]Contract software development is the most popular revenue model in Europe, favoured by 31% of developers[/tweetable]. This may be partially due to the relative lack of seed capital for startup ventures in the region along with a relatively high cost of living versus most global competitors, making bootstrapping products more difficult.

Slower growth

Although the European app economy is growing at less than half the global rate, some loss of share was unavoidable. Europe was very quick to reach high levels of smartphone penetration and most of the device sales growth is in developing markets. A significant fraction of demand for apps will always be filled by local developers with better market knowledge. As smartphone penetration increases in developing countries their local app economies are growing rapidly. European developers are well placed to export to English-speaking markets and South America but it’s not so easy for them to succeed in Asia. It’s likely that developers based in the EU will need specialist support or local partners to maximise app export opportunities in some of the fastest growing markets.

The enterprise opportunity

As smartphones reach saturation, businesses will play an increasing role in the growth of the app economy in Europe. In our Business and Productivity Apps report we forecast that this sector would experience rapid growth, reaching $58 billion globally by 2016. We have identified 5 areas where app developers and startups can add value in the business & enterprise app sector:

Vertical market specialisation
Productivity/BYO apps
Mobile SaaS
Bespoke enterprise apps
Mobile application and device management

While European developers are well placed to win bespoke enterprise app development business, they may struggle to compete with better funded rivals from other regions for the larger opportunities. Starting a technology business has never required less capital but scaling an enterprise software business is incredibly expensive to do quickly. The biggest mobile SaaS, application management and vertical market opportunities are likely to be venture capital fuelled land grabs. To ensure that Europe makes maximum gains from the future growth of the app economy, policymakers need to do all they can to keep app entrepreneurs from relocating to Silicon Valley in order to access the expertise and capital they need to compete.

North American App Developer Trends 2014: Insights into the app economy powerhouse

North America plays a very central part in the app economy. Not only is it home to the companies that create all of the leading mobile platforms, it is also the largest creator of app revenues. We estimate that [tweetable]in 2013, North America contributed 42% of the world’s app economy output[/tweetable]. Developer mindshare in the region is also considered particularly valuable by OEMs and tools vendors. This is due to the disproportionate global shares of both venture capital and media coverage focussed on the region. North America is often the starting point for new developer trends with high smartphone penetration and relatively mature 4G networks.

For those that see value in understanding developer trends and preferences in North America we have created a new report which compares the region to the rest of the world. The report covers developer mindshare for platforms, languages and tools, as well as revenues and deeper dives into enterprise and game developer markets. It answers questions like these:

Why are developers in North America more likely to target mobile browsers than those in the rest of the world?
Android mindshare is higher than iOS in North America but by how much?
Despite lower mindshare, iOS is prioritised by more North American developers than Android but how many?
How much more revenue does a developer in North America earn on average than one elsewhere in the world?
How is that extra revenue distributed amongst the developer population and across platforms?
Which revenue models are most popular and which are the most successful in North America?
Enterprise developers in the region make significantly more revenue than those targeting consumers – how many times greater is the average revenue?
Which revenue models do these enterprise developers favour and what’s their share of the total revenue pie?
Games are also monetised differently than other apps, which are the most popular revenue models for North American game developers?
Ad networks are the most popular category of tool globally but not in North America – what’s more popular there?
What’s the breakdown of developer tool usage across platforms in the region?

The North American App Developer Trends 2014 report includes many more insights and explanations of key trends. It is also packed with 20 graphs, slicing the relevant data in different ways. If you need to know more about developers in the region, then this report is for you.

State of the Developer Nation: The App Economy Consolidates Before the Next Gold Rush

Our 7th Developer Economics survey broke all records again, reaching more than 10,000 app developers from 137 different countries. The full report with the survey findings has just been published and is available for free download!

The view of the app economy that they collectively provide is one of consolidation. Developers are focusing their attention on fewer platforms and app revenues are becoming increasingly concentrated amongst the top publishers. Consolidation in the developers tools sector may also be partly responsible for the decline we see in tools usage. This is also reflected by the platforms, with BlackBerry moving their focus away from consumer smartphones and Microsoft killing their recently acquired Asha and Nokia X platforms to double down on Windows Phone. Fortunately there are several indicators that the next gold rush is just getting started.

Platform Wars

On a global level the platform wars are ending with iOS claiming the majority of the high-end device market and Android winning almost everywhere else. This results in [tweetable]Android leading in developer mindshare at 70% with iOS a clear second with 51% of developers targeting the platform[/tweetable]. However, we’ve been tracking this metric since 2010 and there is a new pattern. [tweetable]Windows Phone was the only platform to gain developer mindshare, rising steadily to 28%[/tweetable], despite failing to gain device market share. Although Android and iOS lost developer mindshare, this was not fewer developers prioritising either platform, rather more developers are now choosing sides. The average number of platforms a developer targets has fallen from 2.9 to 2.2 over the last 12 months, with more than 40% only targeting a single platform.

BlackBerry 10 is rapidly leaking developer mindshare, down to 11%, having failed to gain traction with consumers. Meanwhile, it’s now becoming increasingly clear that [tweetable]the future of HTML5 lies beyond the browser[/tweetable]. Although HTML5 is used by 42% of developers as a technology for app development, only 15% still target mobile browsers as a distribution platform.

A surprisingly high 47% of iOS developers and 42% of Android developers are using something other than the native language on their platforms. While hybrid apps are the most popular non-native option for building Android and iOS apps, they’re only used by 13% of developers. Hybrid apps are HTML5 apps with a native wrapper, typically created by tools such as Cordova.

App Revenues

The majority of app businesses are not sustainable at current revenue levels. [tweetable]50% of iOS developers and 64% of Android developers are below the “app poverty line” of $500 per app per month[/tweetable]. 24% of developers interested in making money earn nothing at all. A further 23% make less than $100 per app per month. The overall app economy, including all revenue sources not just the app stores, is still growing but the revenues are highly concentrated. At the top end of the revenue scale there are just 1.6% of developers with apps earning more than $500k per month, collectively they earn multiples of the other 98.4% combined.

State of the Game Developer Nation

Games dominate app store revenues, yet most games developers struggle. [tweetable]33% of developers make games but 57% of those games make less than $500 per month[/tweetable]. Experience breeds success in the games market. The more games a developer has shipped the more likely they are to be financially successful. However, 70% of games developers have shipped less than 4 titles.

Games is a multi-platform world with the average games developer targeting 3 platforms versus 1.75 platforms for non-games developers. Multi-platform games benefit from cross-platform game development tools with Unity by far the most popular, used by 47% of developers. The next paid tool, Adobe Air, comes a distant second at 15%. Apple and Google’s latest graphics technologies launch a battle for the richest gaming experiences. Third party game development tools like Unity and the Unreal Engine will be key to developers exploiting these capabilities.

Tools of the App Developer Trade

Third-party tools are a critical part of successful app businesses. There’s a strong correlation between tool use and revenues, the more tools a developer uses, the more money they make. We successfully predicted the rise of the Mega-SDK, where consolidation amongst tools companies allows developers to integrate multiple tool categories from a single vendor. Despite this, tool use is declining, partly due to the rapid influx of new mobile developers. These new developers are typically not aware of the tools that are available and thus reduce the average usage levels. 26% of developers that are interested in making money don’t use any third party tools, up from 14% just 12 months ago.

The most popular category of tool is Ad Networks, with 30% of developers using them. However, this is one of the few tool categories that is not associated with higher than average revenues. More experienced and successful developers show a preference for Cloud Computing platforms, such as Amazon Web Services or Microsoft Azure, with 40% of those with 6+ years experience in mobile apps adopting them.

Enterprise Apps – The Next Gold Rush

[tweetable]Enterprise apps are already the safest bet in the app economy and they’re only just getting started[/tweetable]. 67% of mobile app developers primarily target consumers and 11% target professionals directly. The 16% of developers who target enterprises are twice as likely to be earning over $5k per app per month and almost 3 times as likely to earn more than $25k per app per month.

Penetration of enterprises with mobile devices and solutions is already broad but not yet deep. Currently iOS appears to be winning the battle for enterprise adoption and revenues. Yet many developers are focusing on the wrong platform with 10% more enterprise developers targeting Android than iOS. Although enterprise apps have been a historical strength for them, Microsoft and BlackBerry are seeing very weak adoption for their new platforms amongst enterprise developers due to lack of demand from enterprises.

This battle is in the very early stages. Microsoft is re-focusing on their core competence in productivity software while Apple and Google move rapidly to embrace enterprises. [tweetable]Google’s integration of Samsung’s Knox platform into the Android platform is a major step forward[/tweetable]. Meanwhile Apple’s new partnership with IBM gives them a strong proposition in all the major vertical markets. These moves will undoubtedly drive greater adoption of mobile technology in enterprises and create countless opportunities for developers to help re-think the way we work.

For more information, download the full Developer Economics Q3 2014: State of the Developer Nation report!

How much does it cost to create a successful app?

The app stores contain a range of apps from hobbyist creations built for fun to the carefully crafted output of venture backed startups and mega-corporations that have had millions of dollars spent on their development.

Even though the market is maturing and exceptionally well-funded developers have taken over the store charts, the occasional small independently developed app that goes viral can still break through and achieve a decent level of success. The question is, how likely is a small budget developer to succeed? What platforms give them the best chance of success? Where should the budget be spent? With all the competition out there, how much does a bigger budget improve your chances of turning a profit?

What are the odds?

In order to look at how budget can impact profitability it’s worth calibrating by the average chances of making a profit on each platform.

The figures in this chart are probably more positive than most industry observers would expect. Looking at the data it seems likely that many solo developers have valued their time at zero when reporting costs. For hobbyists and explorers, working in their spare time this might make rational sense. They don’t expect to be paid for the time anyway and their small app profits more than cover their other development costs. This is reflected in the slightly lower level of Android developers losing money versus iOS (there are far more hobbyists on Android than iOS).

Leading platforms

On the most popular platforms – iOS, Android and HTML5 – there’s a general correlation between spending more on an app and making more revenue. However, not all spending produces equal results. Spending more on development only slightly increases the chances of making a profit, while increased spending on design and marketing are strongly correlated with higher probability of making significant profits. Higher spending on customer service is almost always associated with greater profit probability but here the causation is almost certainly in the other direction; successful apps incur greater customer service costs because they have a lot of customers! These platforms show very similar patterns but they aren’t identical. The biggest difference between them is that spending more on design for HTML5 apps seems to produce much less of a boost to profit probability than for either of the leading native app platforms.

The second tier

BlackBerry 10 and Windows Phone show similar patterns of spending versus profit probability that are very different from the leading platforms. For small amounts of spending, there are similar patterns to the leading platforms. More investment, greater chance of a profit, with better returns from design and marketing spend. However, before reaching a level that would sustain a full-time designer or developer, the trend reverses; investing large amounts in any aspect of apps for these platforms reduces the probability of a profit and increases the chances of making a loss. This suggests that these platforms have not yet reached sufficient scale in terms of app revenues to sustain many highly complex or polished apps.

Opportunities everywhere

On the leading platforms, developers with budgets in the multiple thousands of dollars a month have roughly twice the chance of turning a profit on their apps as those spending minimal amounts. Even at lower spending levels, the probability of breaking even or better is reasonably high across all platforms, particularly for those investing in design and marketing. While it’s clear that only some of the platforms discussed above are likely to support scalable app businesses at the moment, there are plenty of opportunities to build profitable apps on any these top 5 platforms.

Want to know more?

I’ve only scratched the surface of our data here. What scale of profit or loss can be expected on different platforms with different levels of investment? Are there optimal investment levels to maximize the chances of success? Which app categories are most likely to product a profit. What do successful app development companies look like at different sizes? All this and more is covered in our App Economics report.