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!

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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.

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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.

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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.

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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.

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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.

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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.

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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!

Developer Economics: Ecosystem wars drawing to a close

Welcome to the brand new Developer Economics report! Now in its fourth year and 6th edition, the latest Developer Economics survey reached over 7,000+ developers across 127 countries, setting new standards in developer research.

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Get your free copy here and read about the movers and shakers in the app economy. Dive deep into our rich dataset and discover how developers select and prioritise platforms, which developer tools they use and how their choices translate to revenues.

As always, we have a lot more data available so get in touch (moredata@visionmobile.com) to get the data you need if you can’t find it in the report. Continue reading Developer Economics: Ecosystem wars drawing to a close

Top 5 VisionMobile articles for 2013

With 2013 drawing to a close, we’d like to present you with the top articles from our blog for this past year – and wish you a happy and productive 2014! So, without further ado, here are the top 5 VisionMobile articles for 2013 – enjoy!

5. Developer Economics: App market forecasts 2013-2016

by Andreas Pappas
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The global app economy was worth $ 53Bn in 2012, and expected to rise to $ 143Bn in 2016. As part of our new Developer Economics: App Economy Forecasts 2013-2016 report, Senior Analyst, Andreas Pappas, examines developer population, platforms, revenues, and revenue models and shows how app store sales are just a small part of the app economy. Read the full article. Continue reading Top 5 VisionMobile articles for 2013

How do developers prioritise platforms? iOS vs Android vs HTML5

How do developers perceive different platforms and how is their platform choice affected by the type of apps they developed or the way they define success? Andreas Pappas looks into the data from VisionMobile’s Developer Economics survey in Q3 2013 to shed some light on these questions.

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Not long ago, the choice of a mobile platform, i.e. which mobile platform to support was a key question for developers. That question has more or less been addressed now: iOS and Android accounted for 94% of smartphone sales in Q3 2013 and there is little doubt that they will continue to dominate the market in the years to come. For organisations that require massive scale, combined with all the perks of a mobile ecosystem (monetisation, distribution, platform services), iOS and Android are the platforms of choice with a combined Mobile Developer Mindshare of over 85% based on the last Developer Economics survey in Q3 2013. Continue reading How do developers prioritise platforms? iOS vs Android vs HTML5

Learning From Blackberry's Decline

After Blackberry announced disastrous Q2 results, news broke that Fairfax’s offer to take the company private had hit funding snags as pension funds were uninterested. This shouldn’t be particularly surprising, but it means that a break-up is now the most likely outcome for the embattled smartphone manufacturer. Let’s use Blackberry as a lens to see what we can learn about declining businesses.

This article, by Sameer Singh, was first published at Tech-Thoughts.

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1. Companies cannot attack established ecosystems from behind

The easiest takeaway from Blackberry’s decline is that no single company can compete against an established ecosystem. Blackberry’s decline began once iOS and Android were firmly entrenched as leading mobile ecosystems. Blackberry failed to understand that creating a viable ecosystem around the BB10 operating system was extremely unlikely given the timelines. By the time BB10 was productized, iOS and Android already held dominating positions in the market and developers had no reason to look back. Continue reading Learning From Blackberry's Decline

App trade: a global opportunity

As we launch our new Developer Economics survey [UPDATE: Survey now closed – results out Jan 2014], Senior Analyst Andreas Pappas quantifies the international dimension of the app economy to visualise app trade routes. With barriers to international expansion disappearing, today’s app economy knows no borders. But almost 50% of developers are not yet crossing those borders.

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One of the things that make app development attractive to developers is the relatively low effort involved in selling apps across international borders, compared to other forms of international trade. The low barriers to selling apps internationally make app development attractive even in regions where smartphone penetration and app consumption has yet to reach a level that can effectively support local app development. This is the case in Asian countries with smartphone penetration below 20%, compared to over 50% in Western Europe. To some extent, app development is even more attractive in Asian regions, as labour and other costs are lower, compared to western app economies. Continue reading App trade: a global opportunity

Infographic – Developer Economics Q3 2013 – State of the Developer Nation

As we’re about to launch the latest Developer Economics survey [UPDATE: we’ve launched the new survey – you can take it here!], we’d like to present you with an infographic with some key stats and figures from the latest, Q3 project, to whet your appetite. This infographic holds just a sample of the dozens of insights from the Developer Economics Q3 2013 report ([vm_form_download link_text=’full report available for free download’ product_id=’4062′]), tracking the state of mobile ecosystems, developer mindshare, monetisation trends, revenue models and developer tools.

Insights from this infographic:
– Android and iOS lead in terms of mindshare, HTML5 comes third: 71% of mobile developers use Android, 57% use iOS, 52% use HTML5
– Most developers go straight to the browser: The largest share (38%) of HTML5 developers develop mobile websites with another 23% developing mobile apps
– There are more iOS developers also using Android than vice-versa: 69% of iOS developers use Android, but just 40% of Android developers use iOS as their second choice, just ahead of HTML5 mobile (29%)
– iOS leads in average monthly revenues – but Android is closing the gap: At $5,200 per developer per month on average, iOS continues to be the most revenue-generating platform for developers, ahead of Android by a margin of 10%
– The global app economy was worth $ 53Bn in 2012, and expected to rise to $ 68Bn in 2013: The mobile segment corresponds to 12.6% of the global developer population. In other words, 1 in 8 software developers is involved in mobile development in 2013
– Creativity (53%) and the fun of building an app (40%) are the top motivators for developers

Can’t wait for more Developer Economics? Our new survey is just around the bend [UPADTE: new survey is live]- stay tuned and take the survey (if you’re a developer), or help spread the word (if you’re not)! For the moment, enjoy this great, new infographic!

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How to win in mobile without making your own OS

The battle for app ecosystems is over – iOS and Android have won. However, this is not the end of the war for mobile users. VisionMobile’s Senior Business Analyst Stijn Schuermans and Strategy Director Michael Vakulenko discuss how leading ecosystem players like Amazon and Facebook are competing for users without building operating systems.

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The mobile industry is buzzing with new mobile operating system initiatives. Microsoft is betting big on Windows Phone. Intel and Samsung are cooperating on Tizen. Telefonica and Mozilla are leading the Firefox OS effort. The Jolla team (ex-Meego) is touting Sailfish OS. Ubuntu is extending its popular Linux distribution from desktop to mobile. Hundreds of crazy-smart engineers around the world are losing sleep as we speak to create the next big OS.

As it happens, operating system technology no longer matters that much in mobile.
Continue reading How to win in mobile without making your own OS

Developer Economics: App market forecasts 2013-2016

The global app economy was worth $ 53Bn in 2012, and expected to rise to $ 143Bn in 2016. As part of our new Developer Economics: App Economy Forecasts 2013-2016 report, Senior Analyst, Andreas Pappas, examines developer population, platforms, revenues, and revenue models and shows how app store sales are just a small part of the app economy.

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In the past few years the mobile industry has experienced a powerful upheaval sparked by the launch of the first iPhone and the creation of the first, true app ecosystem. This event brought about a gradual restructuring of the mobile value chain and a steady shift in value from the traditional pillars of the mobile economy, telco services and mobile handsets into app ecosystems. This emerging component of the value chain is what we call the “mobile app economy” and it represents the fastest growing area in the mobile value chain today and will continue to do so in the foreseeable future. Continue reading Developer Economics: App market forecasts 2013-2016

[Report] Developer Economics Q3 2013 – State of the Developer Nation

We’re happy to announce the launch of our new Developer Economics report, based on the largest, most global developer survey (6,000+ respondents from 115+ countries). You can [vm_form_download link_text=’download a free copy’ product_id=’4062′] of this latest report, that tracks the state of mobile ecosystems, developer mindshare, monetisation trends, revenue models and developer tools.

Developer Economics Q3 2013

The full report is available for [vm_form_download link_text=’free download’ product_id=’4062′] – but you can also view the web version, in our newly-launched Developer Economics website and comment on specific sections of the report! In this article we’ll just present some of the key insights – but stay tuned for more Developer Economics articles, based on data from our latest survey!

Developer Mindshare Q3 2013

The Mobile Developer Mindshare Q3 2013 shows Android leading at 71% of developers using the platform, followed by iOS at 56%.

HTML5 has entrenched itself as a mobile development technology of choice, with 52% of the developer population using HTML5 technologies for developing mobile apps.

Developer Mindshare Q3 2013

Once we double click on that 52% of HTML5 mobile mindshare, a kaleidoscope of colour and options appears. The largest share (38%) of HTML5 developers develop mobile websites with another 23% developing mobile apps, i.e. incorporating offline functionality and deeper browser integration. Hybrid apps, such as those produced by PhoneGap account for 27% of HTML5 mobile developers. A minority of 7% of HTML5 mobile developers use platforms exposing native APIs via JavaScript, such as Firefox OS and BlackBerry 10. Last but not least, 5% of HTML5 mobile developers use a Javascript-to-native converter tool like Appcelerator.

Up-and-coming platforms

BlackBerry has been successful in transitioning BB legacy developers over to its new BB10 platform, with the new platform having almost the same mindshare as the legacy BlackBerry 5/6/7 had just before the release of BB10 six months ago.

The strong interest in Windows Phone observed in past surveys is still there (35% of developers planning to adopt WP) but has subsided by 12 percentage points since Q1 2013. Mobile developers now have a wide gamut of options with challenger platforms competing for their attention. Windows 8 is at 40% of Mobile Developer Intentshare, followed by BlackBerry 10 (28%) and Firefox OS (capturing 27% of all developers planning to adopt a platform).

Platform selection and consolidation

There is no one-size fits all in mobile platforms. Our research shows that iOS is selected more frequently than average by developers that value revenue potential (+12%), graphics (+7%), app discovery (+8%) and user reach (+10%). Developers tend to use HTML5 more frequently as their primary platform when they value porting (+9%) and speed & cost of development (+4%). BlackBerry 10 is used more frequently than average as a primary platform by developers valuing developer community programmes (+16%). And Windows Phone is most popular for developers looking for the right development environment (+3%) and documentation (+2%).

Which platform is right for me

Whether hobbyists or IT managers of Fortune-500 companies, developers use 2.9 mobile platforms concurrently, according to our recent survey of 6,000+ mobile developers. This is the first time we are observing a shift towards diversification, with our earlier 2011-2012 research pointing towards continual platform consolidation: on average mobile developers used 3.2 mobile platforms in our 2011 survey, compared to 2.7 in 2012 and 2.6 in our Q1 2013 research.

Platform prioritisation

At 2.9 concurrent platforms on average, today’s developer is multi-platform. In this world, not all platforms are equally important to a developer. Prioritisation has an impact on which platform are new apps and features first rolled out, as well as the focus, app quality, sales and revenue on that platform. Our data shows that 84% of mobile developers are using iOS, Android or HTML5 (mobile) as their primary platform.

Our research shows a strong lead of iOS over Android with 49.4% vs 59% of platform developers preferring it as their main platform. Whereas Android has 4x times more devices shipping and a significant lead in Mobile Developer Mindshare, it lags behind iOS in terms of Android developers using it as their lead platform.

Platform prioritsation

Platform priorities also depend on the level of experience. Developers who are fresh to mobile have a much stronger preference towards Android, with almost twice as many new mobile developers preferring Android (40%) than iOS (21%).

Revenues and revenue models

At $5,200 per developer per month on average, iOS continues to be the most revenue generating platform for developers, and ahead of Android developer monthly revenues by a margin of 10%.

App revenues per platform

Our research of 6,000+ mobile developers shows that there is no single revenue model that is dominant across all platforms. On Windows Phone, developers have a strong preference towards in-app advertising (43%) and pay-per download (40%). BlackBerry 10 developers have a strong preference towards pay-per download (47%). The picture is much more balanced on Android, iOS and HTML5, with no revenue model dominating to the extent observed on Windows Phone or BlackBerry 10.

Developer motivations

Contrary to popular perception, money is not the only motivator for mobile app developers – in fact, far from it. Revenues – in some form or other – are the goal for only 50% of mobile developers.

The hierarchy of developer motivations shows some surprising findings. At the base of the pyramid, the majority (53%) of mobile developers are motivated by creativity or the sense of achievement, making this the most popular among motivators. The fun of making an app, is a motivator for 40% of mobile developers.

Developer tools

Our research shows that developer tools are in the must-have app development arsenal of the most sophisticated developers, and also those making most revenues. Across the tools spectrum, iOS developers are the most active and sophisticated users, with 92.5% reporting that they use at least one tool. iOS developers therefore have a clear advantage as being most advanced in tool use, and therefore having the infrastructure to innovate and differentiate.

Read the [vm_form_download link_text=’full report’ product_id=’4062′] for more insights and data on the latest mobile development trends!

More Developer Economics reports

With the release of State of the Developer Nation, we’d also like to present two more reports, based on Developer Economics data.

Developer Segmentation

Developer Segmentation 2013

The definitive study of developer segments and the hierarchy of developer motivations: Extensive profiling of the 8 principle developer segments, based on desired outcomes, personal motivators and success metrics.

  • How do the eight mobile developer segments contribute to the app economy?
  • Which developer segments should you approach, and at which stage of your developer program?
  • How should you approach each segment?

 


 

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App Economy Forecasts 2013-2016

Developer population, platforms, revenues, and revenue models sizing and forecasts 2013-2015. Sizing the app economy: developer population by region and platform, distribution of revenues, revenue models and forecasts.

  • What is the size of the developer communities for the three key mobile platforms (Android, iOS, HTML)?
  • Which are the most lucrative revenue models for developers?
  • What are the relative sizes of the app economy?