[Survey] Developer Economics 2011: The evolution of app development

[Developer Economics 2011 is here! As we launch our new survey on all things developer-related, Marketing Manager Matos Kapetanakis looks back at the 2010 report and examines the major events that have shaped mobile development in the past 6 months]

VisionMobile - Developer Economics 2011

The evolution of Developer Economics
Last July we published the definitive mobile developer research report: Developer Economics 2010, dubbed by TechCruch as “one of the most profound…to date”. Our report delved into all aspects of mobile application development, across a sample of 400+ developers segmented into eight major platforms.

We’ve just launched the follow-up to this research report: Developer Economics 2011, once again made possible thanks to BlueVia, the global developer platform from Telefonica that helps developers take apps, web services and ideas to market. Our goal is to see how the dynamics of the developer world have changed since early 2010 and to provide more insights into app marketing, monetization and many other factors.

Join the survey or help spread the word! This year we ‘ve also secured a prize for each of the first 400 developers; 10 hours free testing time on DeviceAnywhere’s 2000+ handsets. UPDATE: Thanks to overwhelming support, all 400 free testing time prizes have been awarded by DeviceAnywhere. Of course, the $1,500 Amazon voucher is still up for grabs!

Major shakeups of the mobile industry for H2 2010
So, what’s changed since our 2010 research? The mobile industry is an ever-evolving landcape. In the past 6 months we have seen the Symbian Foundation close shop, with Nokia hoping that the as-yet untested MeeGo project will carry their smartphone banner. We have also seen the stellar rise of Android, zooming past Apple’s iOS and BlackBerry and becoming the no2 smartphone platform behind Symbian.

In the handset OEM arena, we have seen more shakeups in 2010 alone than in the 10 years preceding it. Apple and RIM have overtaken some of the traditional handset OEM powers (Sony Ericsson, Motorola, LG) and claimed a spot in the top 5. According to some estimates, ZTE could join them soon.

Moving forward, Developer Economics 2011 is looking at how the key metrics of mobile development have changed in the last year.

The migration of developer mindshare
One of the major findings of our 2010 report was the migration of developer mindshare away from the ‘old guard’, i.e. Symbian, BlackBerry and Java, towards the new powers of the realm – iOS and Android. According to our research, nearly 60% of the 400+ respondents had developed apps on Android. Apple’s iOS took second place, with more than 50% of respondents having a go at it, with Java ME following third.

In our Developer Economics 2011 research, we’ll be asking participants which platforms they’re currently targeting, which ones they plan on targeting and which ones they’re abandoning.

So, what’s changed since then? Well, if anything, the gap between Android and iOS and the rest of the platforms has grown even larger. The Apple App Store carries more than 300 thousand apps, while recent estimates place the number of apps in Android Market at around 130 thousand.

While Nokia has been spending considerable effort on the Ovi Store and increased its popularity with consumers and developers alike, they still have a long way to go to catch up with the two app-dispensing behemoths.

Why do developers head towards iOS and Android? Our Developer Economics 2010 analysis showed that Apple offers a platform that is relatively easy to master and using which a developer can design great UIs. They also have the largest app store and although the certification problem is an issue for some,  porting and fragmentation are not a challenge;. Android, on the other hand, has been gaining momentum across all fields, storming its competitors’ key market – the US. Of course, Android’s many fragmentation issues are often overlooked in the face of many handset OEMs’ dependency on the platform.

The disparity between handset sales and available apps

Our Developer Economics 2010 research uncovered a disparity between the number of devices sold for each platform and the number of available apps. One would expect the platforms with the highest market penetration to dominate in terms of apps, but that couldn’t be further from the truth.

Taking 3Q10 as a reference, it’s easy to see that the two platforms with the lowest penetration, iOS and Android, have the highest number of available apps.

On the opposite side of the spectrum, while Java ME and Flash Lite have the greatest market penetration by far, they can scarcely measure up to the newer platforms when it comes to app volumes.

In Q4, the contrast is even sharper. Both Android and iOS stores have grown by almost 100 thousand apps apiece. Windows Phone has shown an admirable growth, reaching 4 thousand apps in just two months, although it still has a long way to go before becoming truly a threat to incumbents.

Monetization and revenue expectations

In Developer Economics 2010, we asked developers how they felt about the revenues they’re receiving from selling their apps. Almost one in four respondents reported poor revenues, while only 5% reported revenues exceeding their expectations.

VisionMobile - Developer Economics 2010 - revenue expectations

While there has been a boom of app stores, that’s not necessarily a blessing for developers. Most developers face a discoverability issues, having their apps buried under thousands of other apps. Like one developer said in our previous research “It’s like going to a record store with 200,000 CDs. You ‘ll only look at the top-10″.

What options are there for developers? One option is to adopt a multiple storefront strategy, as well as to tailor your monetization model to specific app stores. As the CEO of Rovio, creator of the prodigious Angry Birds app, noted: “Free is the way to go with Android. Nobody has been successful selling content on Android”.

Developing apps in 2011
Care to see how the apps world has changed in the last year? Stay tuned for Developer Economics 2011, where we delve into app development, monetization, distribution, retailing, porting and fragmentation issues among many others.

Mobile developer? Join the survey and have your say.


Why Adobe Should Change its Mobile Strategy (again)

[Where is Adobe really heading with Flash in mobile? Guest blogger Guilhem Ensuque deconstructs Adobe’s recent AIR and Flash mobile strategy and argues why Adobe should go back to the drawing board]
The article is also available in Chinese.

Seen from the outside, Adobe’s mobile game plan is an extension of the same strategy that took them to near-ubiquity in the desktop browser. It’s about putting the Flash Player everywhere for free and cashing-in on the designer and developer tools – plus distribution and analytics services (see the Omniture acquisition). Adobe bets its mobile future on taking the Flash runtime to a forecasted 50% of smartphones by 2012, according to the company.

This strategy has worked well in the past for Adobe in the browser and desktop space. The mobile business is however a completely different animal – which is why Adobe’s strategy will fail. Here’s why.

The two iterations of Adobe’s mobile strategy
Adobe’s mobile strategy v1 was Flash Lite. It has enjoyed massive deployments – more than 1.2 billion devices to date according to VisionMobile’s 100 million club. From a financial standpoint however, Flash Lite royalties represent less than 1.5% of Adobe’s overall revenue.

More importantly, based on discussion with people familiar with the matter, I would estimate that only ~3% of Adobe’s 1million+ mainstream Flash developers customers have been creating Flash Lite content (although no public data is available).

What’s the lesson here ? It’s that subsidizing the Flash Lite runtime penetration into 40-50% of devices did not translate automatically in developers adoption. From the developer’s point of view, Flash Lite indeed lacked a direct content/apps distribution channel in the pre-App Store and “walled gardens” era. It also had different APIs compared to the “full” Flash, and integrations in OEMs handsets were fragmented.

Adobe’s Mobile Strategy v2 was announced in May 2008 as a complete reset of their Flash Lite strategy, aiming to address these obstacles. With the Open Screen Project (OSP), the mainstream Flash Player (v10) and its sibling the AIR runtime are now at the center of the Flash Platform “galaxy” across all types of terminals – desktop, smartphones, TVs, and more.

With this strategy reset, Adobe is going back to square zero to infiltrate the mobile device market with a consistent runtime. Adobe pledges to waive royalty fees for partner OEMs who are collaborating in the Flash/AIR integration effort on their platforms, ensuring over-the-air updateability and consistency. In addition, OSP partners allow distribution and monetisation of Flash content and AIR apps through their app stores (and also through Adobe’s own Distribution service).

Adobe v2 strategy is in essence a pledge to its key customers – organisations like digital agencies paying for design tools and media outlets paying for flash video delivery servers. A pledge that the Open Screen Project will extend the reach of their current technology and people skills investments to the mobile masses – and succeed where Flash Lite hadn’t before.

Sounds good on paper, but … Continue reading Why Adobe Should Change its Mobile Strategy (again)