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We continue with insights from our most recent publication, IoT Developer Megatrends – a short publication on the most important trends for the Internet of Things. In this post, we look at the potential of consumer and enterprise IoT markets. Enterprise IoT (industrial, large-scale applications) are currently the biggest market in terms of revenues, but will that remain so forever? Consumer applications like Wearables and Smart Home are hyped in tech media, but will that translate into a real business opportunity? History and data can provide some answers to these questions. Flashback to 2007. “Five hundred dollars fully subsidized with a plan!” Steve Ballmer laughed as the journalist asked for his reaction to the iPhone launch. “That is the most expensive phone in the world and it doesn’t appeal to business customers because it doesn’t have a keyboard. … Right now we’re selling millions and millions and millions of phones a year; Apple is selling zero phones a year. In six months, they’ll have the most expensive phone by far ever in the marketplace. … Let’s see how the competition goes.” Who would buy an overpriced phone that doesn’t appeal to business customers, indeed! From a latecomer to the market with no experience in mobile telephony, nonetheless. Except for one small detail. The demand for expensive iPhones (and later for Android) did not come from business users who wanted faster-better-cheaper. It came from consumers craving the millions of apps available on these devices. Not only was Windows Mobile overtaken by iPhone and Android, but these new products ultimately undermined the enterprise market that Microsoft and Blackberry owned. In 2014, iOS and Android accounted for 97% of new mobile device activations in enterprises, while the latter two were obliviated. The new normal: consumers first As it happens, the pattern we saw in smartphones is not the exception, but the rule for most recent computing technologies – Software-as-a-Service, social media, and even PCs. Likewise, IoT will find large-scale adoption in consumer markets first. After that, consumer technology will proceed to displace its supposedly superior enterprise equivalent. This might surprise you, as enterprise solutions comprise the bulk of the IoT market today. Isn’t all the money in large enterprise projects then? [tweetable]Unlike in days past, the technology underlying the IoT is relatively cheap and ubiquitous[/tweetable]. It doesn’t require large government or enterprise budgets to fund so it is accessible to experiment and iterate with. Just like with mobile apps, innovators can take existing technology into countless needs and niches, most of them unimaginable today. (As opposed to inventing new technology to realize an existing vision.) The enterprise market caters to straight-forward, well-understood business needs and grows at a moderate pace. Meanwhile, for consumers without long procurement cycles, the plethora of use cases unlocks new demand – things we didn’t realize we needed – which grows the market at incredible speed. Finally, enterprise technology is overtaken: if I can have this fantastic, cheap, powerful consumer technology at home, why am I stuck with old, clunky tools at work? It should come as no surprise then, that [tweetable]the most popular verticals in which IoT developers are active are the Smart Home and Wearables[/tweetable]: distinctly consumer-oriented sectors. The other verticals have a B2B orientation, requiring developers to sell their work to enterprises or partner with big companies to get their products to consumer markets. As a result, they are much less attractive to developers, and innovation will be slower there. The Connected Car market offers us an interesting view in what happens when a sector “consumerizes”. Up until now, developing car apps required partnering with car makers. Apple’s CarPlay and Android Auto enable – for the first time – a direct-to-consumer model for developers. Immediately we see an uptick in developer interest. Market reset IoT is a greenfield market. When new use cases lead to new demand, this new demand is fair game for everyone. The rules of the current market will not apply. New players can appear out of nowhere and overtake incumbents (as Apple and Google did in mobile). New business models can emerge, some of which disruptive to incumbents. Some newcomers might give for free (or at zero profit) what incumbents sell, in a model that boosts demand for their core product. History shows that it will be nigh impossible for incumbents to react effectively. [tweetable]We predict that by 2020, new players with new business models will dominate IoT[/tweetable]. Most incumbents will be bankrupt, acquired or uncompetitive. #data #developers

In our latest Developer Economics report, we discussed the rise of e-commerce as the most lucrative of revenue models, expected to account for 2.5 times as much revenue as the rest of the app economy put together in 2015. Using the ‘Key Developer Metrics’ dashboard on DataBoard, our new, interactive dashboard service, we found that developers in the mature markets of North America and Western Europe had a weaker preference towards e-commerce as compared to the developing markets. Underlying reasons include high fixed line broadband and desktop PC penetration in North America and Western Europe, coupled with the maturity of the local e-commerce markets. Consumers are more likely to stick with their established desktop-commerce habits, while strong motivations would be needed to divert usage from web to mobile. At the other end, developing markets leapfrogged directly to mobile, skipping the web-only maturity phase that North America and Europe underwent. In Asian markets, mobile-commerce is in many cases perceived as the only alternative to offline shopping and is therefore picking pace rapidly. In India alone, m-commerce went up from about 10% to 50% of online transactions during the last 12 months and is expected to reach 70% in 2015. This poses a significant opportunity for m-commerce apps, especially in the markets where there is weak competition from established brands. App developers prioritizing the Mobile Browser (16%) have significantly higher adoption of e-commerce than iOS and Android. This is explained by the ease of porting an existing web e-commerce app to mobile and leveraging the popularity of existing e-commerce apps. On the other hand, [tweetable]iOS and Android, have a similar level of e-commerce adoption (11%)[/tweetable], though for different reasons. The former because of the established spending patterns of their consumers, and the latter because of the wider reach to consumers, prevailing in the regions where e-commerce is growing fastest. Native apps in this case are not expected to replace web apps, but rather co-exist to address a different need: One-off buyers are unlikely to download an app and are better attracted to the service through mobile web. Once loyalty builds up, it makes sense to move into using a native app in order to take advantage of the better browsing experience and lower friction in transactions that native apps have to offer. By using further the DataBoard filters we compared revenue generation between developers who use e-commerce vs. those using other business models per primary platform. Our data on 8,000+ developers indicates that adopting e-commerce makes sense across all platforms, as it increases significantly the chances of $5,000+ monthly app revenues (29%) as compared to all other revenue models (19%). iOS developers building e-commerce apps stand a better chance (+6%) of earning above $5,000 per app per month as compared to their peers who use other business models. For Android developers, the opportunity is far more profound as e-commerce may prove to be the answer to their monetisation problems: The chances of making $5,000 in monthly app revenues are substantially higher for Android developers who build e-commerce apps (27%) than those who don’t (17%). Leveraging Android reach to sell something other than apps, or, in other words using Android apps as a channel, is an excellent opportunity for Android developers who are after app revenues and find it hard to monetise their apps using ‘mainstream’ business models. The next logical question to ask would be on the profile of the app businesses who are successful in e-commerce. Posed differently, what is the recipe for success in e-commerce? Using our DataBoard service you can find out and plan your future strategy on e-commerce.. You can access packages including DataBoard services here.

In last week’s blog post, we said that IoT is breaking free from Internet and Things. That is, Internet of Things is not about how to add a service to my product, but about turning the information generated by all those sensors, devices, things and services into knowledge about the environment and meaningful action. [tweetable]Making sense of data is the core value driver in the Internet of Things[/tweetable]. Let’s explore this idea a bit further. We continue with insights from our most recent publication, IoT Developer Megatrends – a short publication on the most important trends for IoT. Adding connectivity and services to existing products and machines often leads to a “one device, one app” situation. This proliferation of apps quickly becomes unwieldy to manage. A basic improvement would be to combine multiple devices into one user experience. Most of the emerging Smart Home solutions (e.g. Ninja Sphere, ImperiHome) focus on the ability to control all your devices from one place. But why stop there? Services that create knowledge and drive meaningful action by mashing up multiple data sources are on the rise. Not all those sources have to be sensors or devices. A good example is the Nest Learning Thermostat. To intelligently adjust the temperature in your house, the thermostat uses a lot more info than just the current temperature. It detects your presence with sensors. It talks to other appliances from Nest itself (smoke detectors), Whirlpool (washers), August (locks), Automatic (car adapters), Hue (lights) and others. Nest even works together with electricity companies who pay users to automatically turn down cooling during peak times on the electricity grid. The possibilities to make Nest smarter by pulling in more outside data are endless. Other good examples are health & fitness platforms like Apple HealthKit or Google Fit. They pull together data from all your wearables, smart scales, apps and more into a full picture of you. That data could also be shared with medical professionals – the birth of a new type of medicine? It’s easy to see that using more sources of information creates more opportunities for innovation than just connecting a single device, or even than listing multiple devices in a single service. By combining devices in one service, you add up their functionalities. By mashing up data, you multiply possibilities. However, combining data from different sources presents some tough engineering problems. It comes as no surprise to see the rise of data-centric platforms and tools that help developers to pull together and mash up information. Examples include Samsung’s SmartThings and Apple’s HomeKit in the Smart Home; Dash and Mojio in the car; Validic and Jawbone’s UP platform in health. A single platform for the Internet of Things? The insight that mashing up data provides more opportunities for innovation will help us to answer another question that’s on many people’s mind. [tweetable]The Internet of Things is not one market, but a collection of many diverse verticals[/tweetable]: from Smart Home and Wearables to Smart Cities and Industrial IoT. Will a single platform cater to all these verticals, or will sector-specific platforms win out? At this moment, both types of platform exist. In our IoT Developer and Platform Landscape 2015 report, we list 50+ vertical platforms and a similar amount of general purpose ones. In these early days of the Internet of Things, vertical platforms probably have the advantage: it’s easier for them to create beachhead markets in specific verticals from which to expand. But will this focus hurt them in the long term? If combining more sources of information leads to more opportunities, then limiting platforms to a single vertical is an unhelpful constraint, not a useful focus. If your car pings your thermostat when you’re about to leave from work, is that a Smart Car scenario, or a Smart Home scenario? Both, and neither. It’s a Smart Life scenario. At some point, [tweetable]IoT platforms will have to cross vertical boundaries to reach their full potential[/tweetable]. Already, key players like Google, Apple and Samsung are active in all key verticals concurrently. We predict that the top IoT platforms in 2020 will be cross-vertical. Sector-specific platforms will be niche or in decline. #iot

It seems that if your company doesn’t have an IoT strategy nowadays, you might as well quit. But not just any strategy will do. Let’s look at some of the hot topics in IoT today that are unlikely to make a dent in market adoption. Here are some insights from our most recent publication, IoT Developer Megatrends – a short publication on the most important trends for IoT. Here’s what everyone knows about the Internet of Things. It’s going to be enormous. We’ll have tens of billions of devices by the end of the decade. This is a multi-trillion dollar opportunity over the next years. All the major players in consumer electronics, mobile, cloud, factory automation, enterprise IT and more will be fiercely competing for a piece of that pie. All this information shouts: [tweetable]if your company doesn’t have an IoT strategy you might as well quit[/tweetable]. Not just any strategy, of course. The history of technology is littered with great concepts and engineering feats that never became mainstream products. It’s worth looking at some of the hot topics in IoT today that are unlikely to make a dent in market adoption. What IoT is not A lot of the buzz in the media and on industry forums is about the Internet of Things technology itself. Standards. Security. Privacy. Whether to use Bluetooth, Wifi, cellular or mesh networks. If history is any guide, all of these important questions will get solved over time, but none are an actual roadblock to market adoption. iOS and Android didn’t depend on app standards to revolutionize the smartphone industry, for example. Meanwhile, product designers have discovered IoT and are adding connectivity (internet) and services to their products with blazing speed. Washing machines, socks, ovens, shoes, cars, door locks, toothbrushes and even flower pots are becoming “smart”. The problem with this “product with an app” approach is that all those disconnected, individual apps will soon become impossible for users to manage. The Internet of Things isn’t even so much about things. For example, companies like Google-owned Waze achieve better traffic intelligence by crowdsourcing smartphone data rather than through an extensive network of road sensors, typical for a Smart City project. True smart cities have taken note, and are starting to use Waze’s data. Waze literally never shipped a thing. Breaking Free of Internet and Things Here’s an uncontroversial, but often forgotten truth. [tweetable]The value of IoT products doesn’t come from the technology or the internet or the things[/tweetable]. Value is created in IoT by making sense of data, turning it into knowledge and meaningful action. It’s not the parking sensor that matters, but finding a free parking spot quickly and without frustration. This perspective on the Internet of Things has some interesting implications. We predict that the most interesting IoT applications in 2020 will use data that already exists today, rather than new sensors. Why? Value is created by making sense of data, and many data will have more than one possible source (like in the Waze vs traffic sensor example). New devices will be more expensive to build, install and maintain than solutions that mine existing sources of data. When a solution can be found that doesn’t require new sensors or hardware, it will prevail. Already, companies like Cellint use data from mobile network operators to monitor traffic jams in cities. Internet of Things is not about how to add a service to my product, but about making my product work with every other service. It’s about how all those sensors, devices, things and services can be integrated into the user’s digital lifestyle. IoT is breaking free from Internet and Things. #iot

From ad networks to customer support, developer tool startups have been popping up in the last few years to help app developers write less code, reach the right users and monetise. 2014 was a year with a wealth of M&A activity with over 30 transactions in the developer tools space. Developer tools consolidation [tweetable]There are more than 1,000 developer tools available in the market[/tweetable], with many of them popping up from one day to the next and (some of them) quietly disappearing after a short period of time. That means there’s one developer tool startup for every 1000 apps! Ad networks, user analytics, and cross platform tools feature prominently among dev tool startups acquired in 2014. The acquirers were typically large companies, such as Yahoo, Apple, Google, Facebook, Twitter, Unity and Microsoft, who are building up Mega SDKs with comprehensive developer tool portfolios. The majority of dev tool startups cannot survive on their own for long and are seeking VC investment or buyouts by the larger players in the field. Developer tools need a long period of seeding the market with free products, before they can hope to see conversion to a premium tier – let alone figure out what developers are willing to pay for. In 2013, it was backend-as-a-service tools that were a must-have developer offering and the subject of acquisitions, most notably with Facebook and Parse. [tweetable]In 2014, it was ad networks that were the prime acquisition targets[/tweetable], and with cutthroat price competition and complex landscape this is only bound to intensify. We’re also starting to see an evolution towards UI technology as a developer differentiation, with the acquisition of Form by Google which was subsequently released for free in less than 3 months. In the table below we’ ve tracked 33 developer tool acquisitions in 2014 (let us know if there are any we ‘ve missed?) Developer tools acquisitions of 2014:CompanyProduct descriptionAcquired byDateAcquired forSense NetworksMobile location advertisingYPJan 2014–Little Eye LabsPerformance analysis and monitoring tools for AndroidFacebookJan 2014$10-$15MInsightsOneCloud-based predictive analytics solutionsApigeeJan 2014–SparqMobile marketing platformYahoo!Jan 2014–GetJarIndependent app storeSungy MobileFeb 2014$50MBurstlyBeta testing, user analytics and monetizationAppleFeb 2014–CloudantDatabase-as-a-service for web and mobile developers.IBMFeb 2014–ApplifierUser acquisition SDK with video ads and game replay SDKUnityMar 2014–AdMobiusMobile Audience Management PlatformLotameMar 2014–TesthubApp testing servicesApplauseMay 2014–Mocean MobileMobile Ad networkPubMaticMay 2014–DistimoApp store analyticsApp AnnieMay 2014–CapptainPush notifications and user feedbackMicrosoftMay 2014–TapCommerceMobile ad retargetingTwitterJun 2014$100MAppurifyMobile testing platformGoogleJul 2014–FlurryUser analyticsYahoo!Jul 2014$200MMobileDevHQApp marketingTuneAug 2014–5RocksUser analytics for game developersTapjoyAug 2014–Mongoose MetricsCall tracking technologyIfbyphoneSep 2014–FeedHenryCross-platform toolRed HatSep 2014$82MPlayHavenMobile gaming monetization platformScience MediaSep 2014–MopayMobile paymentsBokuOct 2014–DucksboardDashboard visualisation technologyNew RelicOct 2014–FirebaseBackend as a serviceGoogleOct 2014–TelerikUI frameworks and cross platform toolsProgress SoftwareOct 2014$262.5MMobFoxMobile ad networkMatomy Media GroupOct 2014$17.6MTap for TapPromotion exchange for app developersPretio InteractiveOct 2014–Corona Labs2D game engineFuse PoweredNov 2014–AppifierMobile App BuilderAppMakrNov 2014–AppiaUser acquisition platformMandalay Digital GroupNov 2014$100MTapticaMobile user acquisition platformMarimediaNov 2014$13.6MNexageMobile ad networkMillennial MediaDec 2014$107.5MHockeyAppApp performance management and beta distribution serviceMicrosoftDec 2014– Even though the pace of acquisitions was down slightly in 2014, as indicated by the graph below, it still remains high compared to the 2011 and 2012 levels. As our research demonstrates, developer tools are correlated with both developer experience and revenue – and as such are becoming the competitive arsenal of those that want a fighting chance in the app stores. M&As accross the 2011-2014 period: In 2015 we expect to see the levels of developer tools M&A continue unabated, as larger players – from ad networks to media companies – leverage developers and their apps as a user acquisition channel. And with dev tool startups competing globally for a pool of 5.5 million app developers, the cost of developer acquisition is only going upwards, and not many startups will be able to afford it.

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 #developereconomics

We’re happy to announce the publication of the latest State of the Developer Nation report for Q1 2015 – this is the 8th edition and it’s based on a survey of 8,000+ app mobile and IoT app developers. The report features all the latest trends in mobile and IoT development, including platform and language prioritisation, revenues and revenue models, tool adoption and more. It also examines the rise of Swift, the most popular IoT markets, enterprise vs. consumer apps, as well as presenting the most important sources for developer monetisation. Download the report here – it’s a free download!

VisionMobile – and more specifically, our CEO and Founder, Andreas Constantinou, will be among the judges at the Apps Awards 2015. It’s the biggest apps awards event in Greece and it’s being held in Athens on April 2. App submissions are open until March 16, so if you want to get your app noticed by Media and investors, best hurry up!

Internet of Things comes to life thanks to wide availability of inexpensive and powerful hardware components. Chris Anderson, the former editor of Wired, calls this “the peace dividend of the smartphone war”: “The components in a smartphone — the sensors, the GPS, the camera, the ARM core processors, the wireless, the memory, the battery — all that stuff, which is being driven by the incredible economies of scale and innovation machines at Apple, Google, and others, is available for a few dollars. They were essentially ‘unobtainium’ 10 years ago. This is stuff that used to be military industrial technology; you can buy it at RadioShack now,” Before the smartphone industry started to give back its “peace dividend”, product ideas were years ahead of what companies could achieve with the state of the art hardware. For example, Apple’s vision of Knowledge Navigator saw the light of day 20 years before iPhone launch. Things are different today. Ben Evans writes in “The home and the mobile supply chain” blog: “Today it sometimes seems like things are the other way around. Want to make a connected door lock? Camera collar for your dog? Intelligent scale? Eye tracker? The electronic components all there, more or less off the shelf. The challenge is in the vision for what the product should be, what people would do with it and how you would take it to market.” In other words, hardware technology is abundant today. It’s no longer the bottleneck. IoT breakthroughs will happen not by making more powerful processors or larger memories, but by identifying new applications for the sensors, devices and connectivity. Numerous IoT startups and crowd-funded teams are now tackling problems across a wide spectrum of industries that previously required billions of dollars from large corporations or governments. Much like demand for smartphones is fueled by apps, the [tweetable]demand for Internet of Things will be driven by developers tinkering with hardware, software and data[/tweetable], and discovering new applications for the abundant hardware technology. These developers will create countless apps, services and devices that no single company could ever imagine, let alone create on its own. This developer-driven demand will create Internet of Things markets that are several times bigger than the ones we could ever predict with a spreadsheet that extrapolates today’s market. Many of these IoT developers will come from the mobile app market. Paraphrasing on Chris Anderson, if components are the peace dividend of the smartphone wars, IoT developers are the post-war baby boomers. The data from our recent Developer Economics survey of 8,000+ mobile developers shows that [tweetable]53% of mobile developers are already involved in IoT either making products[/tweetable], as a side project or as a hobby. Wearables attract highest developer interest – 78% of mobile developers that are interested in IoT are targeting or plan to target this vertical. Wearables are followed by smart home and connected car verticals with 74% and 52% respectively. We believe that mobile developers will play a pivotal role in the evolution of IoT extending their innovation beyond mobile apps. Apple and Google already work hard to get mobile developers use their fledging IoT platforms, including wearables (Apple Watch, Android Wear), smart home (Apple HomeKit, Nest Developer Program) and connected car (Apple CarPlay and Android Auto). As we are readying to publish our “IoT Developer 2015 Trends” report, we will be sharing more data and insights about IoT developers and Internet of Things evolution. #connectedcar #iot #smarthome #wearables

Xiaomi was proclaimed the most valuable tech startup in the world after recent $1.1B funding at a monster $45B valuation. There is fair deal of confusion about Xiaomi’s business model, as reflected in a recent Re/Code article: “With a focus on rapid innovation and nifty software, Xiaomi has quickly grown to become the world’s third-largest phone maker. However, a recent financial report showed profits remain slim, just $56 million in 2013.” Xiaomi indeed sells lots of smartphones, but how can low profits justify $45B valuation? It appears that smartphones are just the tip of the iceberg for Xiaomi — Investors who poured $1.1B into the company saw a much better future for Xiaomi than selling millions of cheap smartphones at meager margins. Comparing Xiaomi with other traditional smartphone makers is like comparing Apple with Orange (a mobile network operator). The two happen to be in the same industry, but they are really in different businesses. Apple, Samsung, Huawei, Lenovo sell phones to make profits. Xiaomi sells phones to seed competitive e-commerce business that goes far beyond mobile. Xiaomi’s “Just for fans” slogan is the key to understanding the company. Xiaomi builds community of engaged fans by selling smartphones online and using Internet-age marketing methods. Fans are offered weekly software updates, active involvement in forum discussion about new product features, frequent updates in social media (Weibo and WeChat) and more. Flurry data shows that Xiaomi users are more engaged with their smartphones even than the users of Apple devices. “The average Xiaomi consumer spent 7% more time in apps than an average iPhone consumer.” Xiaomi’s community of fans (and future e-commerce customers) grows at a fast pace: The company sold 61M smartphones in 2014 and expects to sell another 100M in 2015. I first discovered Xiaomi almost 3 years ago, when it was still a nascent handset maker. It was clear even then that there is more to the company than cheap smartphones. We wrote in our VisionMobile research note called “The Xiaomi Tribe” (August 2012): “Marketing guru Seth Godin explains that the purpose of marketing is not to impose products on uninterested customers, but to stand up as the leader of a group that has formed around an idea. He calls this community a ‘tribe’. Once you lead a tribe, you will have their permission to sell them souvenirs.” On January 5th, 2015 Xiaomi CEO Lei Jun published an update on Weibo with sales and revenue numbers (61.12M smartphones and revenues of $11.9B). The update is unsurprisingly directed to Xiaomi fans and not to industry analysts: “Dear Mi Fans, I’d like to share a piece of good news with all of you…” Translated (English) version of Lei Jun’s update is here. Smartphones helped Xiaomi incubate large community of fans that becomes strong competitive advantage for the e-commerce business. Today, Xiaomi is coming of age and growing to become one of the largest e-commerce players in China. Harry McCracken recently tweeted: Xiaomi is the third biggest ecommerce site in China. Approaching $10 billion a year. Sells 1000 different products. — Harry McCracken (@harrymccracken) October 28, 2014 Xiaomi aggressively grows its product portfolio beyond its own smartphones and tablets. The company plans to invest in 100 specialist hardware companies and sell co-branded “souvenirs” to its raving fans. Xiaomi entered smart home with WiFi routers, smart TVs, media centers, webcams, lightbulbs, air purifiers, and a wall plug, as well as wearables and wellness with the Mi fitness band, headphones and a blood pressure monitor. In December 2014 Xiaomi invested $203M in Chinese home-appliances maker Midea Group. The company also established an online entertainment division in the beginning of 2014 and will invest $1B in the creation of video content. In a move that can signal expansion into enterprise services and building a developer ecosystem, Xiaomi will invest $1B in Kingsoft Cloud Services. And if all that is not enough, Xiaomi also obtained a Mobile Virtual Network Operator (MVNO) license from China’s Ministry of Industry and Information Technology in September 2014. Yuri Milner, one of Xiaomi investors, says Xiaomi valuation could more than double to $100 billion as the company has the same potential as Facebook Inc. and Alibaba (where he also invested). “In smartphones, Xiaomi can take significant market share globally, but that doesn’t cover the whole opportunity. There are a number of other interesting categories that Xiaomi can target.” We could see a glimpse of this future opportunity in the opening slides of the January 15th, 2015 company event as reported by Ben Thompson live on Twitter: https://twitter.com/monkbent/status/555608137093230592/ It’s clear that those who view Xiaomi as a smartphone company miss the point. Xiaomi operates a new kind of business model in which smartphones serve as a distribution channel and not a source of profits, as we explained on the VisionMobile blog in August 2013. Ben Evans recently wrote his “Next Questions in Mobile” post, looking beyond the usual “iPhone vs. Android” polemic. Xiaomi answers some of these “next questions in mobile”, and also shows how to use “mobile” to create asymmetric competitive advantage in other industries. #assymetricbusinessmodels #handsetmanufacturer #xiaomi

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.

We’ve just finished the draw of prize winners from our latest Developer Economics survey (October/November 2014). The free report with key findings from the survey will be published in Feb 2015 – so stay tuned! Travis S, Canada – @PicoFoundry (iPhone 6) Majid Khosravi, UK – @majkhosravi (Google Nexus 5) Andy Dent, Australia – @andydentperth (Nokia Lumia 925) Ross Sheriton, Canada – @rosscheriton (Oculus Rift Developers Kit Dk2) Christian Witts, South Africa – @christianwitts (Parrot AR.Drone 2.0 Elite Edition Quadricopter) Richard Moore, UK – @moore_rich (Nest Learning Thermostat, 2nd Generation) Huayuan S (Samsung Gear Live Smartwatch) Katerina Gridina, Germany (Fitbit) Lim Zheng Hong, Singapore (CanaKit Raspberry Pi B+ Ultimate Starter Kit) Also – check out a nice project conducted by Stratos Botsaris on the Raspberry Pi he won in one of our previous surveys!

We’re happy to announce the launch of our new Developer Segmentation report! What’s new: On top of comparing and profiling segments, our new report also examines the evolution of developer segments and what that implies for the future of the app economy and the mix of the developer population. We also discuss where developers turn for guidance and therefore where to find them and how to engage them. We examine shifts in the behaviour and success perceptions of all segments, comparing 2014 and 2013 trends. Finally, we also present the key features of new developers making the transition into mobile and their influence on future trends. The report is available for purchase here: http://vmob.me/DS3Q14WN

In the past couple of years, no other technology has raised more expectations about the future and the way that it will affect our lives than 3D-printing technology. Tens of articles and posts are published every day on this subject. Most articles present 3D-printing with much excitement while others go as far as to predict that every household will own a 3D-printer. [tweetable]Despite the hype, 3D-printing today is far from a household technology[/tweetable], mostly used by non-professionals for fun, entertainment and utility. Yet there is hardly any talk on how 3D printing can pave the way to consume content in a physical, tactile way and therefore become an unprecedented marketing tool. Tangible marketing Marketing until today has been predominantly 2D through graphics sound/music and motion/animation. With 3D printing, marketing can become three dimensional and change how brands interact with consumers in so many imaginative ways. [tweetable]With the advent of 3D printing, the marketing message can be felt, held, used; it becomes tangible[/tweetable]. We are no longer constrained to abstract, virtual worlds or bold slogans and tag-lines. When applied to marketing, 3D printing opens up many dimensions of tangible communication and real-life interaction. Customization From mass-production to mass-customization. Some major brands have already started experimenting by employing 3D printing for communication purposes by uploading products’ 3D files and by allowing customers to alter them and print them. Is this enough? Most likely not. Why not think of something more radical, why not surprise people and introduce a touch of exclusivity? Ok, picture a hotel by the beach (tempting summer destination) that hired a product/fashion designer to create unique, imaginative 3D-printable flip-flops (something like these maybe?) that could be 3D-printed per room booking based on customer’s colour preference, foot size and carry their name. What a great unique give-away gift that can be not only utilitarian, but also stylish, and collectable . Sounds too far fetched? The technology is already here! Games & Gamification [tweetable]3D-printing technology adds a physical and tactile substance to ideas and experiences[/tweetable]. How could this technology be relevant to mobile marketing? Or how about tying 3D printing to the most popular app category: gaming. As mobile games are intangible, transforming part of them into a physical object can greatly enhance the game experience for players. Picture a gamer who wins an award as then complete a new level and can 3D-print their trophy, medal in plastic or even metal. The gamer’s trophy could adorn a shelf, double a jewellery, or form a smartphone accessory that could make it a huge business in Asia. Or how about 3D printable candy to be to be eaten, shared with friends in Candy Crash, with the associated bragging rights, of course. The gamification of advertising and 3D-printing would has endless opportunities for online or mobile marketing where the audience would have to play a game in order to access to the 3D files of the trophy or award. Contextualization 3D-printing machines are in a sense small production factories available inside homes, or even public spaces if they take the form of vending machines, they could be found in any public space. This means that the production and delivery venues can be potentially anywhere target customers live, work, travel and socialize. For example, the insurance company DVV/Les came up with an interesting application of 3D-printing by offering the Keysave,a service which 3D scans your keys and should you lose them, you download and print the 3D-file of your key. A smart promotional activity, close to the core business of the insurance company that widens its appeal to a wider audience. Or a more humorous and high-tech idea. Suppose that someone finds themselves in a noisy environment (dogs barking, cars horning, or kids crying), An app like AutoShazam could detect the high noise levels and a suggestion of a 3D-printable set of earplugs on pops-up on the screen of your smartphone, so that you can print them off and take a break (a mobile KitKat moment maybe?). Further ideas could be born by employing technologies such as ibeacon, or sensors. PreExperience What’s possible can be far wider than the limits of one’s core businesses. Imagine that you book a flight ticket only to receive a confirmation e-mail or e-ticket. But what if the flight company would allow you to create and then 3D print a custom luggage tag themed after your holiday? Or what if after booking online your hotel room for your much-awaited vacation, to have the ability to instantly 3D-print your QR coded key-card; the very same card that you will be using in few days’ time to enter your room. In both cases, a part of your future experience is already in your hands. 3D Maker Ecosystems So, who can realize these ideas? The development of three-dimensional products is a whole new world for the digital marketing and advertising agencies. What is needed is 3D maker ecosystems, or 2-sided marketplaces bringing together marketers with 3D makers. Perhaps a cross between Pinshape, a marketplace for selling 3D objects and oDesk, a marketplace where companies hire freelancers to get the job done. Ecosystems connecting marketers with 3D makers would have superior growth economics and the same winner-takes-all effects that we have seen practiced by Android and iOS ecosystems. Of course, many digital marketing agencies or Brands will opt to make their own 3D printable object libraries working with professional 3D artists or winners of 3D maker competitions. Digital marketing agencies can also partner with banks to make 3D printing available in more places. Just picture this for example. You buy with your credit card a new smartphone. Then your bank, as a nice promotional gift, offers you a series of 3D printable cases you can download and print. But hey, if you do not have a 3D printer, you can go to closest branch where a 3D-printing vending-machine, next to the ATM prints your case. Putting a brand in your hand 3D-printing technology is a marketing tool for all kinds of brand, be it physical goods, software or services brands. It is a multidimensional tool, simply up to the marketers’ imagination to dream up the right application. Yet, be warned: 3D-printing and real-life tangible objects are two-edged swords. Make a gimmicky object and your brand suddenly looks uninspired and tacky, Come up with something imaginative and relevant to the here and now and you will thrive. That’s what puts your 3D campaign not only in people’s hands but also in their hearts. About Alexandros Stasinopoulos Alexandros is a multidisciplinary award-wining Design Manager with experience at the intersections of Design and Innovation Management. Currently, as Creative Director at the international Design & Innovation Consultancy Pilotfish B.V. in Taiwan, he is responsible for transforming visions and strategies to tangible products and services. Prior to this, he designed for Taiwanese companies as well as taught Design at Shih Chien University. Alexandros holds a BA in Design from AKTO (Greece), a MA in Design from Domus Academy (Italy) and a Msc in Strategic & Product Design from TU Delft (The Netherlands). For more information you can visit : www.ale.gr #3dprinting #mobilemarketing