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

[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