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[Communities of developers play a key role in shaping the future of Internet of Things. For the first time we have the data to understand who those IoT developers are, where to find them and how to reach them.] It’s clear now that developers and makers are the true kingmakers of IoT. In the home, Google’s Nest is opening up its API, Apple has HomeKit and Samsung bought developer-focused startup SmartThings. Every wearable and their auntie has an API, and they are now joined by meta-APIs that aggregate data, spearheaded by Apple HealthKit and Google Fit. Recent new car SDKs include Dash’s Chassis API, Carvoyant’s and Vinli’s. ARM and Intel have both released new developer tools. Relayr got $2.3M in funding to build an Internet of Things app ecosystem, among other things. Popular developer tool Eclipse got in the game with an open IoT stack for Java. When 17% of respondents in our survey of 10,000 developers said that they are involved in M2M or IoT, we were really excited. Communities of developers play a key role in shaping the future of Internet of Things. For the first time we have the data to understand who those IoT developers are, where to find them and how to reach them. Let’s look at a few tip on how all those programs can reach out to developers. How many are they? First of all, people running IoT developer programs have millions of developers to work with. [tweetable]VisionMobile estimates the number of IoT developers at 3.2 million individuals[/tweetable]. One in eight of those are focused on IoT as their primary target, prioritising it over smartphones, tablets and other screens. In fact, [tweetable]IoT and M2M attract 36% more developers than Smart TVs, set-top boxes, game consoles and e-readers combined![/tweetable] This is even more impressive when considering that IoT is in the early stages of market development, while game consoles and set-top boxes have dominated the living room for decades. 70% of IoT developers work in small teams, most of them in startups of under 50 people. Small, agile teams dominate the search for the next killer app. That should come as no surprise: it takes a lot of flexibility to venture out in the complete unknown. Indeed, a whopping 14% of IoT developers is unsure of whether they’ll serve enterprises or consumers. Where are they? IoT developers are everywhere – from Silicon Valley to Hanoi and Kuala Lumpur, from small towns to mega-cities. There is no single area that dominates IoT innovation in terms of developer population. This is good news for entrepreneurs all over the world. You don’t need to be in the right spot, because there isn’t any. It is no surprise to see [tweetable]startup clusters in Silicon Valley and New York light up for the Internet of Things[/tweetable]. There are many developers in Europe too (most of them in Western Europe), but they are scattered and seem slow to move from mobile to IoT compared to other regions. A key cluster can be found in Canada, particularly in Toronto. There seems to be a “Blackberry fallout” – a prime source for highly experienced hardware people. Like in Canada, Finland seems to know a “Nokia fallout” and is positioning itself as an electronics innovation center. [tweetable]4 out of 10 IoT developers live in Asia[/tweetable] (a significantly bigger proportion than in mobile). The outsourcing and manufacturing center of the world seems to be fertile ground for IoT innovation. The leaders are India and China. In India, Bangalore and Mumbai lead the dance. In China we see clusters around the major coastal centers, but also the inner cities are surprisingly well represented. The outsourcing and manufacturing hubs offer fertile ground for IoT innovation. How can they be reached? In the survey we also asked developers where they get their information. When breaking down the data for IoT developers, some surprises emerge. Hackathons, for example, are often one of the first initiatives that a developer program adopts to attract developers. But [tweetable]only one in five developers uses hackathons to get info[/tweetable]; their reach is fairly limited. While publications in the tech media is a good way to get brand awareness, only 1 in 3 developers that have IoT as their primary target will look there for information. So where do they look? As usual, [tweetable]community support is the most popular source of information (over 50% of developers)[/tweetable]. This said, online forums and tutorials are underdeveloped relative to mobile, as the IoT developer space is still in an early stage. [tweetable]Committed IoT developers seek information, not discovery.[/tweetable] Workshops are a key outreach channel. In contrast, for those involved in IoT as a side project, conferences and other events are a good way to find out what’s going on. Is this for me? Just the beginning This is just the beginning. First, because we’re in the early days of IoT developer platforms. Even as we have millions of developers who are actively experimenting with IoT and at the same time a lot of IoT developer programs popping up, we have yet to see the emergence of a major platform similar to Android and iOS in mobile. It’s also the beginning for VisionMobile’s research on IoT developers. Our 8th Developer Economics survey (launching next week) will give significant attention to IoT developers. What would you ask to thousands of IoT developers? Find more information here if you want to join the Developer Economics research in this space.

[If Apple wants to create a new, large product category out of smart watches, they need to create mass-market demand for their new product. What are the 3 most important features that will define the future of the Apple Watch? The ones that enable developers to innovate on top of these devices and create demand for smart watches.] “We believe this product will redefine what people expect from its category. … It is the next chapter in Apple’s story.” With these words, Tim Cook made it very clear that the Apple Watch is more than just an excellent product. As with the iPod, the iPhone and the iPad before it, the Apple Watch aims to shape the future of wearables and create a whole new market reality. As it stands, the Apple Watch v1 is a nicely designed timepiece, an engineering wonder, but competition will be fierce. Since fashion is about self-expression, by definition, there will be no single winner. If Apple wants to create something bigger than fashion accessories, the Watch needs to be a functional tool. If it’s a tool, [tweetable]Apple must answer a fundamental question: what is a smart watch for?[/tweetable] The very first new post-Steve Jobs product, Apple Watch, is stunningly pretty, is functional — and is utterly unnecessary. #AppleLive — Brian S Hall (@brianshall) September 9, 2014 A lot of kitchen-sinking in the Apple watch. Much like the iPad launch. It's a piece of glass that be be anything, but what in particular? — Benedict Evans (@BenedictEvans) September 9, 2014 Will notifications become the killer app for smart watches? Unlikely. Not only is it unclear that we really want more interruptions, but it’s a bit of a dead-end for innovation. There can only be so many improvements in notifications, and only so many companies making those improvements. If Apple wants to create a new, large product category out of smart watches, they need to become something much more that a timepiece with notifications and sensors. Something that allows people to do things that were not possible before. How Apple can do this? By following the same path that worked so well for iPhone and iPad: Tap into the limitless innovation power of co-creators to discover new use cases and possibilities we cannot imagine today. The most important features of the Apple Watch going forward are the ones that enable developers to innovate on top of these devices and create demand for Apple’s smart watches. What are these features? WatchKit The straightforward way to expand the functionality of the watch is the WatchKit SDK, which allows developers to create “watch apps”. Other smart watch players like Android Wear, Pebble and Razer have made similar capabilities for developers. Developers are already showing strong interest in smartwatches. For example, the developer program of Pebble boasts 20,000+ developers and thousands of apps,. HealthKit The Apple Watch has a strong emphasis on embedded sensors for fitness and wellness. On the launch event, the company dedicated an entire section on it. Tim Cook: “This is a very important area for me and a very important area for Apple.” But a few sensors and apps do not make a platform. The real potential lies in the HealthKit SDK that Apple launched at its WWDC event earlier this year. While its not technically a feature of the watch itself, it is this SDK that can take the device’s functionality and expand it in a whole new way to monitor activity and other wellness data . Could it be that the category that Apple wants to redefine is not the watch, but wellness and healthcare (in the broadest sense of the word)? Certainly several other companies seem to go after that opportunity. Among them Google (Google Fit), Validic, Samsung (SAMI), Human API and most recently Jawbone (Jawbone UP API). Identity Like the Nymi wristband, the Apple Watch has all the technology in it to identify you personally. Apple has already demonstrated how digital identity combined with the Apple Watch can be used to make payments or even open hotel doors. (The clever integration with the new Apple Pay can drive adoption for both.) However, the possibilities are much broader. Biometric identification can be the end of not only passwords, but other kinds of ID as well. Another product category for Apple to redefine and absorb into its iOS universe? Digital identity is a key control point for many digital leaders, including the likes of Google, Facebook, Twitter, LinkedIn and Salesforce. They are all actively working to hold your identity information and build your online persona on their platform. For Apple, the importance of identity is also evident in their deepening integration between devices and in their introduction of fingerprint sensors in all new phones. Users first What is a smart watch useful for? Beyond fashion and self-expression, a new kind of health monitoring and identity are prime candidates for the title of killer use case. Apple is going at it with their proven recipe for launching digital ecosystems: users-first. Apple starts by releasing a well-designed device for hardcore fans with a lot of value built in by default. Once there is a critical mass of users, Apple connects them with developers, who create real mass-market demand for the product. It will take the ingenuity of a community of developers to explore all the possibilities and create a category killer, and Apple knows it very well. #AndroidWear #google #wearables #Apple #cocreatornetworks #ecosystem #Pebble #developers #samsung

[With the release of Uber’s API, their ploy to achieve world domination has just gotten a lot more probable. The Uber API allows developers to add physical transport to apps as easily as ads or push notifications. Uber as a TaaS (Transportation-as-a-Service) platform.] After Uber’s Series D round in June, a captivating discussion ensued about the valuation of the ride-sharing company. In one corner, Aswath Damodaran, the NYU finance professor who literally wrote the textbook on company valuation. In the other, Bill Gurley, considered by Forbes to be one of technology’s top dealmakers, and investor in Uber. In a blog post, Damodaran summarizes the “duelling narratives” (sic) as follows: “I viewed Uber as a car service company that would disrupt the existing taxi market (which I estimated to be $100 billion), expanding its growth (by attracting new users) and gaining a significant market share (10%). The Gurley Uber narrative is a more expansive one, where he sees Uber’s potential market as much larger (drawing in users who have traditionally not used taxis and car services) and much stronger networking effects for Uber, leading to a higher market share.” In short, while Damodaran sees Uber as an attractive company, he doesn’t think it’s worth the valuation used in its last funding round. Gurley, however, sees a market potential for Uber that’s 25x as high. With the release of Uber’s API, Gurley’s narrative just got a lot more probable. Uber just outgrew the taxi market Several commentators (including a Gartner analyst) present Uber’s API as a new channel slash marketing tactic to draw new users to the service. While this is indeed one of the end goals, there is much more to Uber’s API strategy. [tweetable]Uber can get all the users it needs. To grow to its full potential, it needs new use cases more[/tweetable]. Wherever Uber establishes itself, users flock to the system. Usually, when traditional taxi services become aware of their new competitor, controversy ensues, which leads to even more brand awareness. When taxi drivers went on strike in London in June, Uber saw a 850% rise in sign-ups. Uber itself say poetically that it targets “every app with a map” (thanks Daniel Pink for unleashing that marketing tactic onto the world). In all seriousness, that little rhyme doesn’t do justice to the raw potential for innovation of a ‘bits-to-atoms’ transportation API. In fact, the release of its API might mark the moment that Uber stops being a taxi substitute and becomes truly an on-demand transportation company across a wide spectrum of user needs. Many of these needs we cannot imagine yet. [tweetable]The Uber API allows developers to add physical transport to apps as easily as ads or push notifications. [/tweetable]  Uber as a TaaS (Transportation-as-a-Service) platform, following in the footsteps of BaaS tools. This is possible because all of the ‘infrastructure’ that Uber has built over the past year: users, drivers, and the connection between them through the Uber service and apps. In the blog post that launched the API, Uber explains: “We’ll never conceive of every great idea, and we could certainly never build them all.” They echo Marc Andreessen, who back in 2007 spoke about addressing “countless needs and niches that the platform’s original developers could not have possibly contemplated, much less had time to accommodate.” The current launch partners and the use cases they represent are but a glimpse of where this is heading. When Uber’s network of co-creators gets in full swing, Bill Gurley’s prediction of widely expanding market will become reality, just as millions of apps – many completely unforeseeable successes – unlocked the market for smartphones. New use cases are currently focused on the transport of people, but the recent experiments with local delivery of household items makes it clear that it won’t stay this way. Uber wants it all The second part of Bill Gurleys valuation argument was that Uber is subject to strong network effects, and hence is set up for a winner-takes-all market share. By releasing its API with an exclusivity clause (barring developers from working with competing services), Uber confirms that this is indeed their intention. Not only has Uber reached critical mass with strong network effects between drivers and riders. It’s now adding a new network effect, between developers and users, which can possibly grow even stronger. One of Damodaran’s hesitations to accept Gurley’s narrative was that network effects between drivers and riders might be local, i.e. only relevant on a city-by-city basis, and without global effect. This is not the case for the network effects between developers and users. Uber has many competitors around the world, but soon only fellow global players will be able to withstand the competitive heat. This explains the haste with which Hailo pushed forward the timing of its own API release, launching on the same day as Uber. A lot of the new use cases that the Uber API will spawn, will be scenarios that are not traditionally addressed by taxis. What’s more, taxis will not be able to compete by also providing similar services. They simply don’t have the reach (in users as well as geographies) to persuade developers to adopt a taxi-centric, local solution. Uber wants world domination, and they’re in an increasingly good position to get it. #cocreatornetworks #ecosystem #tools #Uber

[How long will developers be loyal to ecosystems that seemingly set them up for failure? The odds are clearly stacked against developers as most of them struggle to make a living. The sustainability of co-creator ecosystems is in serious peril, it would seem. A look at other lottery-like industries provides an explanation, and a surprising perspective.] Great news from Apple’s HQ, everyone! The App Store is breaking records (yet again, some point out), both in terms of popularity with users and in the total amount of money they spend. What an awesome time to be an app developer, isn’t it? Thanks to our amazing developer community! Apple says July was record-setting month for app store revenue http://t.co/BI8wFTTG5V — Tim Cook (@tim_cook) August 5, 2014 Well, not quite. Tim Cook doesn’t exactly paint the whole picture. The truth: all that app store goodness is very unequally distributed across developers. The figures in our Q3 2014 State of the Developer Nation report are once again crystal clear: [tweetable]the vast majority of app developers struggle to make a living. 7 out of 10 don’t earn enough to sustain full-time development[/tweetable] (we call them the Have Nothings and Poverty Stricken). That would be over 2 million people, roughly the population of Slovenia. Almost 90% of that record app store revenue will go to just 12% of developers. While more app store revenues are clearly a good thing for developers, the money is peanuts compared to what Apple makes. In Mobile Megatrends 2014, we showed that [tweetable]Apple captures 80% of the total iOS “ecosystem GDP”, while developers capture less than 15%[/tweetable] (including commissioned apps released without any revenue model). The situation on Android is even worse. [tweetable]Whereas 50% of iOS developers live below the poverty line, the number for Android is 64%[/tweetable]. Also for Android, hardware makers capture 80% of ecosystem GDP, while developers are scrambling over the left-overs. Other ecosystems like Windows Phone or Blackberry don’t have the scale to provide viable escape routes. Is this sustainable? Can this situation continue, or will these ecosystems eventually collapse as developers get fed up? [tweetable]How long will developers be loyal to ecosystems that seemingly set them up for failure?[/tweetable] The prospects are indeed grim. Marco Arment, for example, speaks about “vastly increased commoditization” as well as declining consulting revenues in a post titled “App Rot”. He quotes other Indie developers saying “There’s a chill wind blowing”, “The app gold rush is well over”, “In my tenth year as a full time indie dev, … I think that yes, it is much harder these days” or “Considering the enormous amount of effort I have put into these apps over the past year, [my sales figure is] depressing.” Expressions of distress that are far removed from Tim Cook’s optimism. And yet, they’re still at it. The number of app developers shows no sign of declining. The app lottery [tweetable]App development is a lot like playing the lottery – as long as there is a chance to win big, people will play.[/tweetable] Investing significant amounts of money and effort when the odds are stacked heavily against you is not a rational choice. But it’s a very human one. We’re collectively bad at assessing likelihoods, especially in situations as complex as marketing a killer app. We get as much pleasure from fantasizing about a big win as we would get from the win itself, especially if we’re poor to start with. The fantasy gets even better because we can’t imagine any other way to get this rich, this quick. The final nudge is the sense of regret we would feel if we didn’t implement that great idea we had, while someone else hits it big on the app store with that same idea. [tweetable]Rational thinking versus pleasure center lit up by fantasies? It’s no contest, really.[/tweetable] There are plenty of other industries with the same characteristics. The same income inequality and hope-driven creation play out in music and other forms of entertainment, game development, and entrepreneurial communities (as long as there are exits, there will be wannabees). Future industries will show the same pattern, too. Internet of Things, anyone? Ecosystems can sustain this situation as long as there is supply of developers hoping to get rich. Only 1.6% of developers have an app that earns >$500K per month, but those few big wins will make all the difference for the motivation of the Have Nothings, the Poverty Stricken and the Struggling to keep creating (source). Asking whether developer ecosystems are sustainable is like asking for how long casinos will exist given that most participants lose money. “Indefinitely” would be a safe bet. #apppovertyline #sustainability #mobiledeveloper #apprevenues #appeconomy

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. #softwareasaservice #asia #apprevenues #mobilesoftware #europe

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. #developereconomics #developerresearch #NorthAmerica

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! #revenues #ios #enterprise #mindshare #Android

We just published the new Developer Economics Q3 2014 report – this is the 7th report in our research series! The full report is available for free download! Based on a survey of 10,000+ app developers, the 7th edition Developer Economics: State of the Developer Nation Q3 2014 research report investigates the latest trends and discusses platforms, languages, consumer vs. enterprise revenues, as well as developer tools and segments.

[Will the car become little more than a smartphone accessory on wheels? This question is highly relevant after the recent CarPlay and Android Auto announcements. Car makers face a choice that could well determine their success for many years to come: keep tight control over the in-car experience, or cooperate with Apple and Google and benefit from the immense value that they have created. But do car makers have a choice at all?] “Will there be head units in the future, or just mirrored phones and devices?” Annie Reddaway kicked off the Q&A section of a webinar about the app mania in cars with this simple enough question from the audience to expert speakers from Ford and INRIX (at the 38 minute mark). She might as well have asked: will the car become little more than a smartphone accessory on wheels? A long, tense silence followed. This question – highly relevant after the recent announcements of CarPlay (at the Geneva Motor Show last March) and Android Auto (at Google I/O in June) – clearly touches a nerve with even the most forward-looking car makers like Ford. After a pause, John Ellis, self-proclaimed “software guy” at Ford, answered that the concept of what is a head unit will evolve, moving somewhere along a continuum from dumb screen to fully integrated app system. (Note the resemblance with the much-feared “dumb bit pipe” scenario for mobile telcos. Not a coincidence.) Let’s see if we can pinpoint where we might land along this spectrum. The trillion dollar dilemma Car makers face a critical dilemma. You can either have full control over the car’s functionality (i.e. in-vehicle apps), or you can embrace Apple and Google in the car, benefitting from the immense value that they create in smartphones and from their automotive initiatives. But you cannot have both. What do we mean by control? In answering the head unit question, John Ellis paints a picture of what’s at stake: “You have to remember that we’re building an object that’s going to be used by people who, at the tender age of 16, get taught what a stop sign looks like. (They don’t get taught how to drive a car!) And then they buy these very high-end, safety-equipped vehicles and then take them out at speed.” Or, as another automotive insider put it: “We make one of the few products that literally kills people.” ‘Control over apps’ means accepting the liability of what happens when a user crashes the car while using an app, which will inevitably happen. With that liability comes a great responsibility to curate and shape what goes into the car, certainly when it is made by third parties. So far, car makers have opted to retain tight control to avoid liability. However, this has slowed them down in creating value for users and in competing with over-the-top solutions, like just using your smartphone while driving. Once more John Ellis: “We [the users] are demanding personalization at a rate that is far in excess of what [car] OEMs can handle.” Automotive has become a market where choice and innovation-by-open-experimentation, not engineering, are the basis of competition. Car makers are far out of their comfort zone, as we’ve explored in-depth in our March report on connected car apps. The alternative to fighting this losing battle is to delegate (and therefore give up) control over in-car apps to over-the-top players. Companies like Apple and Google can solve fragmentation and are experts in developer-centric innovation, i.e. in building vibrant communities of software entrepreneurs. They’ve proven in the mobile space that they know how to create massive value for users and developers alike. Car makers can leverage the expertise of ecosystem specialists, and then use it to their own gain. More and more of them are willing to consider, as the graph below shows. Isn’t this a utopia? Won’t car makers be blown away if they embrace Apple and Google into their products? I don’t think so. In mobile, companies like Facebook, Amazon and WeChat have proven that the model when these companies leverage rather than compete with ecosystems can work very well too. Mobile precedent: why an OTT future might be inevitable If the mobile industry’s history is any indication, car makers might be taken in speed. There are several strong arguments why an over-the-top future for in-vehicle infotainment will be inevitable, despite the best efforts of car makers to stay in control. (After all, telcos and handset makers had the exact same intention in the pre-iPhone era). The basis of competition in automotive has changed. We know that the basis on which people make car buying decisions has irreversibly changed, with in-car technology taking a more prominent role. Smartphones are driving people’s expectations of what car infotainment should offer. People don’t want to be connected with their car, they want to be connected with their life while in the car, and smartphone ecosystems are best positioned to offer that. A 2013 Accenture study found that 61% of people find it essential or important to have the same operating system on the dashboard and on their devices. (see Q10) It’s a predictable new market disruption. If you’re familiar with Clayton Christensen’s Innovator’s Solution, in-car technology might seem like a deja-vu of his transistor radio example. While transistor technology was not a good solution for table-top radios in the 1950s, it resonated with youngsters who wanted music on the go (even at worse quality). The millennial generation today doesn’t care too much for the car as a status symbol or for driving experience. They care about digital lifestyle and about a personal transportation solution that might be multi-modal, doesn’t necessarily involve car ownership, and is above all convenient to get from A to B. Is it any wonder that they’ll turn to the familiar mobile players first? Watch this video if you want to see this generational difference play out before your eyes. The differences in development lifecycle favor an over-the-top solution. People replace their smartphones on average every 2 years. Cars last a multiple of that; many manufacturers offer 5+ years of warranty, so a 10-year lifetime wouldn’t be surprising. Cars also take much longer to design. The result is that at any time, the technology in your car is likely to look inferior to that in your phone, if not outright obsolete. On which of the two platforms would you prefer to build your functionality? Silicon Valley investor Marc Andreessen (here and here) knows what he would choose. He concludes that cars will become accessories to the phone, not the other way around. Car screens should (and will) be 100% tethered and controlled by the up-to-date device in your pocket. In a poll at the Consumer Telematics Show (Jan 2014), 54% of experts agree that “standardized integration of mobile devices” will be the best way to align with the speed of development in consumer electronics devices. My colleague Mark Wilcox offered the only alternative: “If car makers don’t want the in-car computer to be dumb glass with a better GPS antenna and speakers then they need to make cheaply replaceable head units and swap them out at every service.” Company inertia too favors the challengers. The capabilities, resources, processes and business models needed to successfully innovate with car apps are nicely aligned with those needed to innovate with mobile apps. Developer-centric innovation is in the DNA of Google and Apple, while it is a very different mode of operation than that of a traditional car business. As many of you will know, it’s very difficult to get anything at all done in a large organisation, let alone change its core. Based on this, over-the-top players will have an easier time implementing the new regime, which gives them a substantial head start over car makers. Taking the lesson from the smartphone revolution, we even have a pretty clear picture of how exactly control over in-vehicle software will move from car makers to over-the-top platforms; a scenario that today might be unthinkable for many in the industry. How the mobile industry was overturned in 5 easy steps: The proprietary portal Telcos attempt to build their own tightly controlled service “portals” (incl 3rd party apps). This fails, as it is too restrictive for both users and developers. Tactical gain for early adopters Several over-the-top players come in and are adopted by small subset of incumbent telcos and handset makers who seek short-term tactical gain. They might be able to sell an extra high-value connectivity service or become more attractive to the large/affluent OTT player’s customer base. New basis of competition The over-the-top players redefine what is important when buying a phone. Smartphones who have integrated the OTT solution take off in popularity. Consumers show a disregard for traditional metrics of performance in favor of the new platform. Must-have status The popularity of over-the-top solutions quickly makes them a must-have for all handset makers. All other OEMs are forced to adopt, or see their market share and/or profitability eroded. (see image below) Shift of control With wide-spread adoption, control over the app ecosystem moves inevitably to the over-the-top platform players. Telcos and handset makers become “decision takers”, not “decision makers”, as they no longer have the market power to enforce own rules. Can we replace telcos and handset makers with car manufacturers in the story above? The first three steps are already clearly in motion in the connected car market. (See our report for a full discussion). Car makers are making their own app stores, with almost no apps or user traction. The table illustration above shows how some car makers will certainly adopt CarPlay and Android Auto (due to their large traction in smartphones) and possibly others like MirrorLink. The Accenture study mentioned above already clearly shows the shift in customer criteria when buying new cars. When looking at the list of car makers who promise to adopt CarPlay and Android Auto, we might even argue that stage 4 is underway as we speak. Already we can see that OEM-specific head unit software will not remain a differentiator. It might be a lowest common denominator, i.e. having the top internet radios on the car, like now an AM/FM radio is included. If the scenario plays out, then Apple and Google will soon become the guardians of driver safety – they will be the ones applying driver distraction rules and curating apps. It will cement their position as ecosystem owners. Be prepared The odds are stacked against car makers as the controllers of apps and guardians of driver safety. It looks like they have already stepped on the slippery slope that will eventually shift control to over-the-top car app platforms. The pattern is remarkably similar to the events that occurred in the mobile industry, with the same key players and just a few short years ago. Car makers would do well to prepare to embrace the alternative choice: welcoming over-the-top platforms and leveraging them to sell more cars and boost profits. If not, they risk losing the control anyway, without the leverage to boost their core business. One only needs to look at the shifts in the handset industry to appreciate how serious a scenario that is. Many of the ‘kings of mobile phones’ from 2006 are now out of business, have been acquired, or are in deep trouble. Handset profits have shifted to just two companies who understood what was going on and acted correctly.Telcos from their side have seen their VAS business replaced by apps, and are now seeing their core business of messaging and voice being pressured by non-telco apps with superior value propositions. On the other hand, car makers that succeed in leveraging CarPlay, Android Auto and other platforms await a bright future. Also for this scenario, many examples can be found in the mobile industry. Smartphone maker Xiaomi, a 4 year old startup the leverages Android and builds it own differentiated services on top, sold 26 million devices in H1 2014. That’s already more than in all of 2013 and puts the company in the global top 10 of smartphone makers. In its home market China, Xiaomi outsells Apple and has already outsold market leader Samsung on two occasions. OTT² platforms like Line see revenues in the hundreds of millions of dollars, built on a commodity messaging base. So what will the choice be? Over the coming years and decades, trillions of dollars in car revenues ride on this question. #ecosystems #disruption #GeneralMotors #google #Apple #platforms #automotive #carapps #connectedcar #CarPlay #OpenAutomotiveAlliance #Ford

[Put together, the announcements at Google I/O and from Apple, Samsung, Nest, Quirky and others in the past weeks paint a crystal clear picture of where the future of the Internet of Things is heading. Our latest report on the topic gives you the right tools to separate winners from losers in the IoT race. In this post, we line up the candidates in smart homes, smart cars and health.] The blast of IoT-related announcements in the past days and weeks, including at Apple WWDC and Google I/O, are more than an indication that the Internet of Things is picking up pace. Put together, they also offer a crystal clear picture of where the Internet of Things is heading. The major players have put their stake in the ground: A lot of attention at Google’s I/O conference went to the Google Wear and Google Fit announcements. At the same time, Google-owned home automation company Nest – known from its thermostat, smoke detector and now security camera (Nest acquired Dropcam) – has opened up its API to developers. With the “Works with Nest” program, the company is positioning itself as the central hub for connected devices in the home; and it is not alone. Crowdsourcing product development site Quirky announced Wink, a hub + app + cloud platform that together with Nest is going to provide some strong competition for that other hub-in-the-home startup: SmartThings. Quirky is an interesting player as its backed by GE, with whom they have been partnering on a range of smart home solutions. Apple announced HomeKit and HealthKit at its WWDC developer conference, adding to its push into the car earlier this year with CarPlay. Samsung, finally, announced its own health platform SAMI and sensor designs Simband last month. The common theme is that [tweetable]all these recent IoT announcements focus on developers more than products. Why is that?[/tweetable] All these companies have understood a fundamental truth about the Internet of Things. IoT is not about technology or features or devices or connectivity. We explain this idea in depth, and with many more examples, in our new report – IoT: Breaking Free of Internet and Things. [tweetable]The biggest opportunity in IoT is in thousands of niches and use cases, just waiting to be discovered[/tweetable] by tweaking and experimenting with new ideas. How do you deal as a company with such diversity and unpredictability? How do you design products for future unknown needs? Luckily we have some recent examples of companies that solved this conundrum. In the past 6 years, Apple and Google propelled themselves to top positions in mobile by fostering vibrant communities of innovators (app developers) that together unlocked countless new use cases and needs, from silly (Flappy Bird) to life saving (PocketCPR). We’ll leave the full discussion of the exact mechanics for another time, but with the smartphone model in hand, it becomes clear what the companies above are trying to do. They want to achieve the same kind of dominant position as Apple and Google in mobile, using the same recipe. And some of them inevitably will. The stakes are high. Successful community owners will gain immense competitive advantages, typically leading to winner-takes-all markets. The game is on: [tweetable]who will be the equivalents of iOS and Android in the Internet of Things?[/tweetable] Who will be the kings of IoT? Three areas in particular seem on the brink of seeing Android/iOS-like ecosystems of entrepreneurs gaining momentum: home, health and cars. In the home, there are at least 4 serious ecosystem contenders. Apple signalled its intentions by releasing HomeKit, the developer API that enables discovery and control of third party connected devices. Some clever people (e.g. at Forbes and Macworld) have pointed out that the Apple TV might be the perfect substrate for a HomeKit-driven hub. Google has made a clear investment in the home with its $3.2B acquisition of Nest, as well as other initiatives like Android TV and ChromeCast. GE has been building momentum with its Quirky partnership and now the Wink platform. Meanwhile in startup land, SmartThings has been pursuing this ecosystem vision for almost 2 years since its headline-making Kickstarter campaign. In health and wellness, things are heating up too. Fitness wearables like Pebble, Razer, Nike+ and Fitbit have successful SDKs with tens of thousands of registered developers. However, in our new report we explain that the bigger opportunity is in combining and mashing up data from different sources. That is the core functionality of the following candidates: Apple puts its stake in the ground with HealthKit. Samsung did the same with the SAMI platform. Samsung is in a unique position to bundle an IoT platform with hardware (components, not devices), for example the set of reference sensors (Simband) that they announced at the same time. This strategy is also the basis for the company’s success in smartphones. Samsung can also bring a large amount of Samsung device users into play; a strong carrot for ambitious IoT entrepreneurs. Google has been playing with wearables for a while (Android Wear, Google Glass). At Google I/O, the company announced Google Fit, a set of APIs that will “blend data from multiple apps and devices”. Again there are several startups on the scene – Human API and Validic come to mind. In cars too, we find a mix of internet giants, car maker incumbents and startups that are building developer platforms. We discussed them in depth in our March report “Apps for Connected Cars? Your Mileage May Vary”. Apple took the lead earlier this year by announcing CarPlay. Google is following suit with Android Auto, backed by the Open Automotive Alliance with all the major car makers. The announcement mentioned that “Android developers will soon be able to create entirely new experiences for the car” – a clear hint at Google’s intentions to empower a community of entrepreneurs to discover unexpected user needs. Microsoft has Windows in the Car. The leading platform-oriented car makers are Ford with AppLink and GM. Interesting startups with an “over the dashboard” play include Dash and Carvoyant. What about the sectors that have historically been the focus of the Internet of Things industry, like utilities (smart metering), industrial applications or smart cities? While they represent attractive business opportunities, these arenas focus mostly on solving well-understood needs for known customers. As such, they are not likely to sprout ecosystems that can spectacularly break open the IoT market. On the other hand, we might see some unexpected platform players coming on the scene. One set of strong candidates focuses on a different part of the IoT challenge: selling and distributing the physical products. Amazon has made its opening in the Internet of Things with a dedicated online storefront and with back-end services (Kinetics), a simple expansion for its AWS infrastructure. We’ve written earlier this year about the plans of Chinese e-commerce company JD.com (together with Baidu) to set up a service line for IoT entrepreneurs. The wheels are in motion Time will tell who will take the top position, but the wheels are clearly in motion. As time goes by, hardware becomes less and less a barrier to entry. Just look at Cruise, an 8-person startup that built a self-driving car in record time with low-cost sensors and components. Dedicated Internet of Things platforms are booming (we count 50+ so far). The cost of connectivity is dropping. This allows entrepreneurs to focus on making sense of data and drive meaningful action, more than on solving underlying technology problems. As this trend continues, VisionMobile forecasts a fast growth of the IoT developer base in the next years, reaching well over 4 million innovators and entrepreneurs by the end of the decade. With every new use for Internet of Things technology that they discover, demand will grow and this market will become more attractive still. Exciting times! How can you separate winners from losers in the Internet of Things? Whether you’re a developer, investor or platform company, our IoT report will allow you to make the right bets. Download your copy now. #Carvoyant #nest #forecast #SmartThings #google #Apple #platforms #HumanAPI #GM #dash #developers #microsoft #Quirky #Validic #GE #samsung #Ford

We’re happy to unveil our latest research report – the UK App Economy 2014 charts the mobile app economy in the region, investigating revenues, jobs, the profile of the British app developer, and how the UK can provide better opportunities for developers. Get a free copy of the report here: www.vmob.me/UKAE14WN This report will give you a snapshot of the mobile app industry in the UK, presenting an overview of the market in terms of size and revenues, as well as insights into the average size and geo distribution of developers in the UK. The UK App Economy also sketches the profile of mobile app developers in the country, presenting demographics, but also average revenues, app categories and attitudes. Finally, this report shows how app developers rate funding, training and policy in the country, and where they see room for improvement.

We’ve just launched a new report, disseminating the IoT industry – you can download it for free here: www.vmob.me/IOT14WN The key lesson from the smartphone revolution is that Apple and Google won not by product features, but by creating networks of entrepreneurs. These networks of entrepreneurs unlocked new demand by creating countless of apps and devices that no single company could ever imagine, let alone create on its own. This entrepreneur-driven demand has created a smartphone market that is several times bigger than the pre-iPhone one could ever become. The same will happen in the Internet of Things. Our new report tells the story of how developer-entrepreneurs can push the IoT market to unpredicted heights, and how smart IoT ecosystem winners will reap enormous gains by leveraging developer innovations to boost their core business.

The UK has been quick in adopting smartphones, tablets and apps with smartphone penetration expected to reach 74% by the end of 2014. But beyond the benefits that one can derive from using apps, there are potentially much bigger benefits in creating apps, or creating an app industry for that matter. We’re happy to present our new research report, charting the mobile app economy in the region, investigating revenues, jobs, the profile of the British app developer, and how the UK can provide better opportunities for developers (you can download the full report here). VisionMobile set out to assess the state of the UK app industry in 2014 and find out whether the UK is on the right track to becoming a vibrant and global hub for the app economy. Our findings are based on our Developer Economics survey series (our 7th edition reaching over 10,000 app developers) and a UK App Developer Census survey of over 300 developers across the country. We estimate the UK app industry will exceed £4 billion in revenues in 2014 and will be growing at a CAGR of 38% between 2013 and 2015 and 22% between 2013 and 2025. The UK has approximately 8,000 companies that are directly involved in app development and approximately 380,000 jobs centred around the app economy. We expect that approximately 30,000 new jobs will be created in the in the next 12 months. Most of the UK app industry is concentrated around Greater London, which is home to 31% of UK app companies while the South East hosts another 24% of app companies. There are several app startup hubs located in Brighton, Cambridge, Birmingham, Bristol and Edinburgh, however these are much smaller in scale than London. The UK app economy attracts developers & designers across all ages, from teenagers to 65+ year olds, with 4% being 17 years old or younger. Female app developers or designers account for just 8% of the developer/designer population. 83% of app developers and designers are self-taught and only 7% have attended a Bootcamp or other taught course. This indicates a gap in the market for affordable training for app developers. Overall, app developers and designers are pleased with career prospects, flexibility, income and work life balance. But they are quite critical of the UK as a technology hub and the support it provides, highlighting gaps in training and mentoring, funding, industry presence and support, particularly outside of London. The UK has gathered a lot of momentum in the past two years and the government has been visibly supportive of the startup economy, introducing several incentives and investment in infrastructure. However, there are several areas where more work needs to be done in order to sustain this momentum: continuing tax incentives, providing affordable training, even at an early age, cutting the red tape for fledging startups, educating entrepreneurs about funding resources and support schemes. Industry must also strengthen its support in these areas and confirm this support through developer events across the UK. Looking for more insights? Download the full report for free! #appeconomy #apprevenues #mobileapps #UK

It’s abundantly clear from WWDC announcements that Apple is working hard to lock users into the system by combining devices into one seamless experience (PC, mobile, tablet, home, wearables). What many people might not realise is that Apple is fighting just as hard to lock in developers. [tweetable]iOS is now fully in the third stage of the ecosystem lifecycle.[/tweetable] You see, platform strategies differ throughout the life of a developer-centric ecosystem. To get started, ecosystems must solve the proverbial chicken-n-egg problem by establishing a beachhead market. Once network effects are in place, ecosystems must expand fast to stay ahead of competing ecosystems, hopefully to arrive at a winner-takes-all outcome. We’ve written extensively on this blog how mobile ecosystems have done that by subsidizing some participants (developers) and by commoditizing others (e.g. handset makers in the case of Android). In the case of Android and iOS, that battle has been won. (More about that in Mobile Megatrends 2014 – just out!) As the ecosystem matures, new platform features become less about acquiring new users to further fuel network effects. Apple is now defending its iOS ecosystem. Its focus has shifted to capturing and keeping the most valuable users. Tim Cook spent several minutes on stage to highlight that Apple is capturing users away from Android in China. The best users, obviously, not those buying $50 Android devices. Here’s how Ben Thompson over at Stratechery puts it: “[Apple’s Jony Ive implicitly acknowledged] that smartphones have reached the saturation point, especially in the premium segment that Apple has chosen to focus on. However, this is problematic because Apple needs to grow. There are two ways to do so: steal share from competitors and sell more to existing users. While the sheer number of announcements at Monday’s WWDC keynote was almost overwhelming, much of what was announced slotted neatly into one of these two strategies.” But as we know, iOS is a two-sided platform. [tweetable]To keep the most valuable users, Apple needs to keep the best and brightest developers and entrepreneurs engaged[/tweetable], too. This is a top priority for Apple. Locking in developers If developers create apps first (or even only) for iOS, then Apple is sure of a steady stream of high-value, exclusive apps that make iOS devices more attractive to users. The goal of keeping valuable users is tightly intertwined with Apple’s ability to keep developers on the platform. It does so by making it more difficult and costly for developers to switch away from iOS development. A first set of initiatives intended to lock in developers are SDKs like Touch ID and Metal that only make sense when there’s little fragmentation (Apple’s natural advantage over Android). Creating a login mechanism based on a fingerprint sensor only makes sense if a lot of devices have such sensors. We can reasonably assume that future Apple devices (all high-end) will, while the same cannot be said for mainstream Android handsets. Nat Brown astutely explains how the same principle works for Metal, a low level graphics SDK: “Of the class of very advanced programmers who will jump on Metal are… the teams that maintain the game engines, frameworks, and toolchains used by 95% (perhaps 99%) of the games for mobile. Unity3D, Unreal Engine, and a few others simply dominate mobile gaming on both iOS and Android. […] Due to this I find it unlikely that the API itself will act to lock anybody into iOS from a classic API perspective – everybody is using an engine or framework and indeed tools much higher up the value chain. But… Metal could very well offer an iOS performance lock-in on mobile.The most realistic rendering games will look great on iOS until Google does deeper/better driver work on Android. As it turns out, that is crazy hard due to the diversity and fragmentation of Android hardware. In this respect, if Metal is indeed a 10x speed improvement or a 10x detail improvement, it may very well be a masterful move – non-iOS games from the same engines will just look lousy on Android. Wow.” Then there are SDKs that are basically platforms inside the platform, like HealthKit and HomeKit. While there are alternatives out there (e.g. SmartThings and OpenHab in home automation, Human API and Validic in health), Apple might be the path of least resistance and easiest experimentation for developers who are just starting to discover IoT. Furthermore, Apple has a key advantage over its competitors. It can dangle the carrot of hundreds of millions of users in front of developers. As a developer, once you build on Apple, you can’t go back, except at a very high switching cost. Apple also creates lock-in by embracing the cloud, as Ben Evans pointed out. In the Naked Android post, we wrote about how Google gains more control over developers by developing all the most valuable functionality into proprietary cloud services, not in the open Android OS. To some extent, Apple is doing the same. With the newly announced Apple-only BaaS CloudKit in particular, Apple is aggressively subsidizing developers. The free storage and usage levels for CloudKit are orders of magnitude beyond other BaaS providers and would cost tens of thousands of dollars on competing platforms if used all. Some services might not be economically viable without it. The more developers adopt Apple’s cloud services (including CloudKit), the more difficult it will be for them to abandon Apple or go cross-platform. Two platforms, two identities iOS and Android are naturally (and intentionally) developing distinct identities. As Evans mentioned: “It might get harder to make essentially the same app on both platforms. If a core, valuable thing you can do on one platform has no analogue at all on the other, what do you do?” As a result, developers who are serious about iOS will stick with iOS. SDKs playing to Apple’s fragmentation advantage, new platform attempts (uncharacteristically focused on developers first before polished consumer products have appeared) and building out cloud tools for developers all serve to make it more difficult for developers to port iOS apps. This will help to ensure a profitable future for Apple for years to come. #Apple #ecosystemlifecycle #lockin #wwdc