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

The news are finally out — Apple is buying Beats for 3 Billion Dollars. Headphone sales? Music streaming service? Wearables? Music label deals? None of the current Beats products look as a credible reason for a deal of that size. Something much bigger is going on. It is not about what Beats is today, but about what Beats can become in the future. To understand what Beats can become we need to understand Lady Gaga first. Lady-Gaga-the-business-model. Lady Gaga broke in with her August 2008 debut album, “The Fame”, and became an international megastar in a few short years. Gaga won Billboard magazine’s Artists of the Year title 2010, is ranked fourth in VH1’s list of 100 Greatest Women in Music, is the fourth best selling digital singles artist in US according to RIAA, is on Forbes magazine The World’s 100 Most Powerful Women list from 2010 to 2013, and was named one of the most influential people in the world by Time magazine. Lady Gaga was the subject of numerous business case studies, including one by Harvard Business Review (Anita Elberse, Michael Christensen) and Business Strategy Review (Jamie Anderson, Jörg Reckhenrich and Martin Kupp). What makes Lady Gaga special is her pioneering use of social media to build a loyal community of fans to “sell the artist” in what the music industry calls a “360 deal”. The “360 deal” is reminiscent of a VC investment model, where a label invests more money up front in exchange for a piece of merchandise sales, touring revenue and other earnings that artists had long kept for themselves. The HBR Lady Gaga (B) case study notes that as early as 2009 and 2010 Lady Gaga already had multiple consumer brand partnerships, including: Beats by Dr. Dre selling branded Heart Beats model of the $100 in-ear headphones as “undeniably unique” and likely to “attract fashionistas far and wide.” (The story is much bigger here than this specific deal.) Virgin Mobile sponsoring the U.S. tour dates of the Monster Ball tour. Polaroid, which appointed Lady Gaga as creative director for a special line of products that would be released in the coming years. MAC Cosmetics for which Lady Gaga joined 1980s pop legend Cyndi Lauper as the latest celebrities to feature in MAC Cosmetics’ Viva Glam advertising campaign. In 2011, Amazon launched a promotional campaign selling at a loss Lady Gaga’s album “Born This Way”, essentially subsidizing distribution of the new album. In an interview with The Wall Street Journal, Gaga was asked whether she believed that “Born This Way” was worth more than 99 cents. The answer is very telling: “No. I absolutely do not, especially for MP3s and digital music. It’s invisible. It’s in space. If anything, I applaud a company like Amazon for equating the value of digital versus the physical copy, and giving the opportunity to everyone to buy music,” she said. “It also wasn’t really 99 cents, because Amazon paid the difference on all of those purchases as part of their promotional campaign for one of their new services. I think it’s amazing and it was a really nice surprise and I felt honored that they chose my record to be part of it.” Troy Carter, who discovered Gaga and was her manager till November 2013 being widely credited for much of her business strategy sums it up nicely in his interview to FastCompany: “It was more about building a platform on top of music—because music, we realized, sells everything but music.” Gaga-the-business-model is a poster child of the new economics of digital era. Mike Masnik of TechDirt calls it the economics of abundance brilliantly explaining it in just minute and a half video here: http://www.techdirt.com/articles/20091020/1519476609.shtml. (Note that Mike accurately predicted the rise of the new business models in music well before Gaga’s business success became known.) Digital music is abundant (“It’s invisible. It’s in space” as Gaga puts it) and music industry whose business models were rooted in scarcity of vinyl records and later CDs were turned upside down by the need to deal with abundance of digital music. The good news, Mike says, is that for every abundance new scarcity is created. Gaga-the-business-model is an excellent example of how to benefit from these new scarcities created by the transition to digital. The business people behind Gaga also saw the missing link in the digital music value chain. This missing link is also a huge opportunity to fill the void going much further that “selling the artist” to the loyal fan base. In February 2013 Jimmy Iovine, Chairman of Interscope Records (Lady Gaga’s record company) and at the same time co-founder and CEO of Beats, gave very revealing interview to D:Dive Into Media. The most interesting bit comes in the Q&A section where Jimmy divulges his vision for BeatsMusic.com 35 min 15 sec in the interview (and it’s not about curation): “But there something else going on our service that doesn’t go on anywhere. We have to make it user-friendly to the artist. They have to be able to build businesses on it. They have to be able to have the information who is using their music, where they are… That has to become a business for the artist as much as communicating with their fans. Right now, they (music services) have all the information and the artist have no information. No one knows… I don’t know. I own a record company. I would die to know who bought my records on iTunes or bought my tickets on TicketMaster.” Jimmy Iovine sees the opportunity in changing the game and “building a communication between a fan and an artist.” In other words Beats Music is not yet another streaming service designed to sell music, but a platform for artists to build businesses and “sell everything but music” as Troy Carter says. That brings us all the way from Gaga to Uber, where Troy is an investor. Steve Schlafman from RRE ventures says in “Uberification of the US Service Economy”: “On-Demand Mobile Services (like Uber) deliver a “closed loop” experience by collapsing the value chain including discovery, order, payment, fulfillment (offline but within owned network) and confirmation.” In essence, Beats aims to become Uber of music by aggregating demand, connecting listeners to artists and empowering the artists to build thriving business on top of the platform. Much like Uber, which promises to end the era of poorly paid cab drivers. Or like Apple App Store, which connects users with app developers allowing them to build business on top of the platform. Pandora, Spotify, Play Music and Amazon that are all designed to sell music, will have very hard time to compete against a platform for building businesses on top of music. As Marshall Van Alstyne said in slightly underestimated way (pun intended): “There is a strong argument that platforms beat products every time.” The acquisition makes very good sense for both Apple and Beats. Beats gets the opportunity to kickstart network effects of the platform by bringing huge base of Apple users together with their credit cards to artists. Apple at the same time will benefit by bundling the music platform with its idevices, where the company makes most of its profits and badly needs to rejuvenate growth. (I don’t think Apple will prevent BeatsMusic service from being available on Android devices. Having best experience with most fresh music reserved for Apple users will do just fine. “Apple-first” strategy works very well for both most mobile app developers and Apple.) Interesting times ahead — As Troy Carter says in his interview to Guardian: “Hollywood, record labels and tech giants such as Apple, Google and Samsung face immense risks and opportunities. Everybody should be afraid right now. We saw what happened to Nokia and BlackBerry and Motorola. Nobody saw Android coming. Nobody saw the iPhone coming. Nobody saw Samsung coming. No one is safe right now. Everything is moving so quickly.” The music industry needs to brace for a deep and painful disruption, much like legacy taxi cartels and unions across the globe. Samsung needs to find a new source of differentiation after acknowledging defeat with its home-grown music service. Will health and wearables fill this void? Google will probably scramble to build a competitor to Apple/Beats refocusing YouTube Music from labels to artists. Amazon will need to find a solution if the company wants to stay relevant in the music distribution on which it relies for promotion. Of course we haven’t heard much of it from Apple or Beats, but Jimmy Iovine said to Re/Code following the announcement of the acquisition: “Obviously, we can’t talk about that, as you know. See, in the record business, you can show someone your song, and they don’t copy it. In the tech business, you show somebody your idea, and they steal it.” The strategy lesson from Apple and Beats is this: Look for opportunities to build platforms connecting consumers with value-adding complementors. (Think a “connect-ing business”, and not a “connected business”.) Capture value through bundling with the platform that will buy you hyper-growth driven by network effects and insurmountable competitive advantage. (And of course don’t tell anybody what’s you are up to before it’s ready.) #Apple #Beats #businessmodels

Samsung unveiled its vision on mobile health. The company wants to provide the “voice of your body” with two new intiatives: a sensor-packed Simband device for protoyping next-gen wearables, and the SAMI cloud platform that enables developers to generate insights from health data. The vision is spot-on when it comes to making software entrepreneurs the new heroes of health. Analyst Stijn Schuermans asks the question: what’s next for mHealth? It used to be that the coach on the field or in the gym had all the wisdom to make you fitter and healthier. Ever since Moneyball, coaches have had a serious competitor: data. This trend has started to snowball in recent years with the advent of smartphones, wearable fitness trackers and connected devices (from scales and heart rate monitors to blood glucose meters). Health IoT has moved from being a blue ocean market to red ocean status as competition increases. Fitness trackers, connected weight scales, sensorized running shoes… Already we see dozens of similar devices on the market. For example, Amazon.com shows 1,000+ results in the pedometer category; it lists products from Fitbit, Jawbone, Nike, Basis, Omron, iHeart, Striiv, Misfit and about 50 other known and less known brands. Even if many of these are not yet connected, they will be soon. [tweetable]The current wave of health and fitness related IoT devices is just the beginning.[/tweetable] Once these devices become commonplace, what’s next? From coder to coach: the role of software entrepreneurs in mHealth It is well understood that the trend to approach fitness with devices and data will have far-reaching consequences for sports coaches, dietologists and medical professionals alike. If those professions want to remain the heroes of health in the future, they’ll need to partner up with new players in the game: software developers and data scientists. [tweetable]The wheels are already in motion when it comes to making sense of health data.[/tweetable] There are already over 50K health apps on iOS and Android that help people to get fitter, increase their wellness or manage their disease. Insurance players like Aetna are working actively to get a full health picture. Their Carepass initiative helps their customers to get a full picture of all their app and device data in one place, and to set and track health goals. Propeller Health is combining IoT with environmental data to help patients to better manage asthma. What’s being done for the developers who make all those apps? Programmable Web lists 100+ health APIs. Most of them are between 1 and 3 years old and will have matured quite a bit already. Companies like Human API and Validic provide middleware for health data, making it easier for software entrepreneurs to build interesting applications. Another company that has clearly understood the message is Samsung. Their “voice of the body” concept is spot on. With today’s announcement of the SAMI platform they’ve taken a big step in enabling developers to make sense of data. SAMI, an unwieldy acronym that stands for Samsung Architecture Multimodal Interactions, is described as an open cloud-based sensor data platform that helps developers to go “from big data to contextual insight”. [tweetable]IoT and wearable will win by communities of software entrepreneurs that will make sense of all the data they generate[/tweetable] and help you improve your health, no matter what your current level of fitness is. The smartest of these entrepreneurs will combine data from many sources to arrive at the best possible recommendation or diagnosis. Platforms like Human API or Samsung’s SAMI will make that possible. Incidentally, Samsung has signaled clearly today that developers and entrepreneurs are crucial to the future of mHealth. Developers being involved long before a consumer-ready device is available – the same developer-first strategy that Google followed with Android or, say, Google Glass. The Korean electronics giant is also putting its money where its mouth is: it will invest a handsome $50M in a Digital Health Challenge to stimulate innovation within the global developer ecosystem. Next stop: users Samsung’s Voice Of The Body announcements illustrate the evolution in IoT maturity nicely. First come sensors and devices, represented today by the Simband “investigational device”. (Simband is a wristband packed with novel sensors to measure your body. It’s more of a reference design rather than a commercial product.) Then, empower hardware makers, developers and entrepreneurs to experiment with the new technology (via Simband) and with the data it generates (via SAMI). Samsung obviously hopes that this will result in more component sales. But before that will happen, a final piece in the puzzle needs to fall into place. Simband and SAMI, despite all the talk about developer-entrepreneurs, are still very much focused on solving technology challenges. The aim is to reduce the cost and complexity of building valuable applications. What’s missing is a vision on how to connect these developers and their apps to the users who needs them. Where will the demand for wearable health sensors and health apps come from? We can draw an analogy with smartphone platforms. The Android ecosystem consist of a software platform (the Android Open Source Project, or AOSP), plus the Google Play app marketplace and a set of critical apps and APIs (more in our Naked Android article). AOSP is open, the Play store and Services are tightly controlled by Google, as they represent the connection with users. Demand for Android phones is driven by Android apps, which are built with Play APIs and available on the Play store. [tweetable]The SAMI platform represents the AOSP of wearables.[/tweetable] The equivalent of the Play services is nowhere to be seen (yet). The crucial question for Samsung and other players in the space is this. Will they stop at technology? Or will they continue to evolve into a full-fledged computing platform and ecosystem that connects users with a community of software and hardware entrepreneurs? Interestingly, more so than almost any of its competitors, Samsung has a large amount of existing users that could be connected to valuable health solutions. If Samsung pulls this off, they have an opportunity to start the network effects that will eventually lead to a winner-takes-all outcome. [tweetable]Will Samsung seize the day in IoT and create the next dominant computing platform?[/tweetable] What do you think? #developers #mobiledeveloper #samsung #wearables

When Facebook was first listed on the stock exchange in 2012, investors were concerned. Had the company missed the mobile wave? 5 years after the launch of the iPhone, most of Facebook’s revenues still came from desktop. Zuckerberg’s team recovered. Today mobile already represents 60% of revenues, and Facebook is about to double down. Apps will become a central part of the social network’s monetisation of mobile. Stijn Schuermans shines a light on Facebook’s new mobile developer strategy. Two years ago we wrote that Facebook was a prime candidate to become the leader of the mobile web; the one who would take care of the missing platform ingredients (reach, discovery, monetization). It should come as no surprise then that over the past year Facebook has shown a renewed focus on helping developers to build – grow – monetize their apps across all mobile platforms. Zuckerberg himself called it the cross-platform platform in his keynote speech on f8. We couldn’t have said it better ourselves. The mobile platforms of Apple and Google became so successful because of the large amount of apps that they drew in. For developers, however, this meant heavy competition, few opportunities to stick out and a difficult environment to build a business on. [tweetable]Facebook now positions itself as the developer’s partner that helps to de-commoditize apps.[/tweetable] Facebook can lure mobile apps to its own camp by enabling developers to compete better. Apps will depend on Android and iOS to become available on the majority of handsets, and on Facebook to reach users, get discovered and make money. Three aspects of Facebook’s strategy warrant a closer look. Facebook builds a Mega-SDK Facebook knows developers very well – hacker culture is deeply embedded in the company’s DNA. [tweetable]Facebook is now extending that developer DNA beyond company boundaries[/tweetable], just like Amazon has expanded its cloud operations DNA outside of the company by commercializing its Amazon Web Services (AWS). “Unlike their past developer efforts, which were all about pulling content onto Facebook, this year was about pushing Facebook’s infrastructure out into all kinds of mobile apps”, as Ben Thompson put it. It is a very natural way to empathise and connect with the developers who will build complements to Facebook and Amazon’s core businesses. How is Facebook going to entice mobile developers? By building one of the first true Mega SDKs. [tweetable]As we predicted last July, Facebook’s Mega SDK will be built around app marketing services[/tweetable]: analytics (relevant acquisitions include Parse, Monoidics, Little Eye Labs, Airlock) promotion (more than 350 million app downloads through mobile app ads to date) re-engagement (Engagement Ads were announced at f8) monetization (the new Audience Network) Half a dozen acquisitions in the past year, new products and a new developer incentive program (FbStart) all say that mobile developers are becoming incredibly important to Facebook. Although we have to stay careful of course: Mike Mace correctly points out that Facebook in the past has shown predatory behavior (incorporating 3rd party apps into the core product) and neglect for developers. Digital identity is Facebook’s essence Facebook’s new anonymous login and privacy features are not just about soothing the privacy pundits and the company’s most vocal users. They point to a deeper reality: digital identity is at the core of everything Facebook does. [tweetable]Facebooks needs developers to make the Facebook digital identity ubiquitous across web and mobile[/tweetable]. The social network giant does that by reducing sign-up friction on the user side (hopefully also making developers more comfortable with integrating Facebook login). Social login was also a main feature of Parse. Several other highlights at the f8 conference (Send to Mobile, the mobile Like button, even Applinks) make most sense when viewing them as ways to increase the value of a Facebook login relative to a proprietary identity, another social login provider, or no identity at all. [tweetable]Why this focus on identity? Because it’s crucial for Facebook’s survival[/tweetable]. A study from early 2014 claims that Facebook is about to lose 80% of its users, drawing a parallel with infectious diseases that spread, then flare out. Whether or not that comparison holds water, identity is a powerful antidote to this scenario. If users don’t just use Facebook as their social network, but also to access scores of unrelated services, then it will be hard for users to drop Facebook entirely. The company will still have to work hard to keep users active and engaged, but it will have an opportunity to try. And, not to forget, Facebook gains a treasure trove of user behavior data that will reach far beyond its own services. It was no accident that identity was the first item on the “cross-platform platform” list in the graph above, before social. On the web, Facebook also accounts for more than half of all social logins. It fully intends to achieve the same in mobile. The company’s future depends on it. Facebook wants to become “Google for mobile” Facebook and Google are mortal enemies, because they have the exact same business model. Create value for users by developing a score of valuable services (most of them free to use), and enlist developers to create thousands more. Deliver that value across all digital devices; on the web and on mobile. Capture value by selling user reach, engagement and hyper-targeting to advertisers. It is no wonder then that there are many similarities between both companies. Facebook is taking that similarity to the next level with its new products. The Audience Network is the AdMob of Facebook. It aims to become the key competitor for Google in mobile advertising. But the boldest move is Applinks. [tweetable]In the most optimistic case, Applinks will allow Facebook to build the PageRank of mobile[/tweetable], a head-on attack on its arch rival. (Facebook has already kindly offered to host an index of all applinks.) At worst, Applinks can substantially boost Facebook’s app install business (CPI) through affiliate marketing schemes, earning revenue on each referral. That supports the Mega SDK for developers as well as Facebook’s own income statement. #crossplatform #facebook #mobiledeveloper #developers #appeconomy

We’re happy to announce the winners of the prize draw from our April/May developer survey! A big thanks to everyone who took the survey – results will be out in July, available for download from DeveloperEconomics.com, as usual. Here are the prize draw winners: – Galaxy S5: Emil Izgin (@ocjdev), Russia – Lumia 930: Marius Hergel, Norway – BlackBerry Z30: Luke A. (@lukeja) – Sphero: Harry M. – Lego MindStorm: Cristiano Sarti (@CristianoSarti) – Raspberry Pi Starter Kit: Stratos Botsaris (@polydefkis12), Greece – Das Keyboard: Daniel Midi (@danielmidi), USA

We’ve just published our latest research report. App Economy Profits examines how choices in the app economy affect profitability and the profile characteristics of the profitable vs. the loss-making app businesses. Find out more: https://www.visionmobile.com/product/app-economy-profits/

The app stores contain a range of apps from hobbyist creations built for fun to the carefully crafted output of venture backed startups and mega-corporations that have had millions of dollars spent on their development. Even though the market is maturing and exceptionally well-funded developers have taken over the store charts, the occasional small independently developed app that goes viral can still break through and achieve a decent level of success. The question is, how likely is a small budget developer to succeed? What platforms give them the best chance of success? Where should the budget be spent? With all the competition out there, how much does a bigger budget improve your chances of turning a profit? What are the odds? In order to look at how budget can impact profitability it’s worth calibrating by the average chances of making a profit on each platform. The figures in this chart are probably more positive than most industry observers would expect. Looking at the data it seems likely that many solo developers have valued their time at zero when reporting costs. For hobbyists and explorers, working in their spare time this might make rational sense. They don’t expect to be paid for the time anyway and their small app profits more than cover their other development costs. This is reflected in the slightly lower level of Android developers losing money versus iOS (there are far more hobbyists on Android than iOS). Leading platforms On the most popular platforms – iOS, Android and HTML5 – there’s a general correlation between spending more on an app and making more revenue. However, not all spending produces equal results. Spending more on development only slightly increases the chances of making a profit, while increased spending on design and marketing are strongly correlated with higher probability of making significant profits. Higher spending on customer service is almost always associated with greater profit probability but here the causation is almost certainly in the other direction; successful apps incur greater customer service costs because they have a lot of customers! These platforms show very similar patterns but they aren’t identical. The biggest difference between them is that spending more on design for HTML5 apps seems to produce much less of a boost to profit probability than for either of the leading native app platforms. The second tier BlackBerry 10 and Windows Phone show similar patterns of spending versus profit probability that are very different from the leading platforms. For small amounts of spending, there are similar patterns to the leading platforms. More investment, greater chance of a profit, with better returns from design and marketing spend. However, before reaching a level that would sustain a full-time designer or developer, the trend reverses; investing large amounts in any aspect of apps for these platforms reduces the probability of a profit and increases the chances of making a loss. This suggests that these platforms have not yet reached sufficient scale in terms of app revenues to sustain many highly complex or polished apps. Opportunities everywhere On the leading platforms, developers with budgets in the multiple thousands of dollars a month have roughly twice the chance of turning a profit on their apps as those spending minimal amounts. Even at lower spending levels, the probability of breaking even or better is reasonably high across all platforms, particularly for those investing in design and marketing. While it’s clear that only some of the platforms discussed above are likely to support scalable app businesses at the moment, there are plenty of opportunities to build profitable apps on any these top 5 platforms. Want to know more? I’ve only scratched the surface of our data here. What scale of profit or loss can be expected on different platforms with different levels of investment? Are there optimal investment levels to maximize the chances of success? Which app categories are most likely to product a profit. What do successful app development companies look like at different sizes? All this and more is covered in our App Economics report. #revenues #mobileplatforms #apprevenues #profits #developersegmentation