Category: Mobile App Markets

It has been decided that this is the last month for the Opera Mobile Store Blog for Mobile Developers.  Since it was started, its primary objective has focused on ways to help developers achieve financial success.  It has covered a lot of ground from design and business development to marketing and distribution, and much more.  My last few posts will take aim at what will prove most interesting, and likely profitable, for the future of mobile apps.

The future is here, it is just not evenly distributed – William Gibson.

Seven broad categories of development are of special interest:

  • eSports
  • Free Trade Agreements
  • Internet of Things
  • Real Time Translation
  • Digital Money
  • Human Augmentation
  • Artificial Intelligence

eSports is still comparatively young, but is a rapidly growing niche with strong marketing and monetization potential.  Over 27 million people watched the League of Legends World Championship last year and many top players have hundreds of thousands of followers and hundreds of millions of page views.  Creating the next eSport sensation is a longshot.  But, developing apps for existing eSports and using cross-promotional or other marketing tools to reach this market is viable.  This deserves special consideration in that competitive gaming tends to draw a higher proportion of super-users (top 5% of spenders) with carry over on active fan sites.

Free Trade Agreements - Though much more abstract as concerns the mobile app developer, free trade facilitates the opening of new markets, expansion of existing markets, and better monetization potential for most markets.  Four major agreements have been or are in the process of being made, including:

  • TransPacific Partnership (TTP – North America and Asia),
  • TransAtlantic Investment and Trade Partnership (TTIP – North America and the European Union),
  • New Silk Road (China, Asia, Middle East, Africa and Europe)
  • EU-Ukraine Deep and Comprehensive Free Trade Agreement (EU and Ukraine)

The impact of free trade will apply in several directions as relates to products, services, markets, wages and the creation of infrastructure to bring improved internet capabilities to developing markets.

It is appropriate to remember that both Singapore and Hong Kong were relatively undeveloped markets in the 1960’s but are both now have a GDP per capita ranking of #3 and #10, respectively.  Developing a market today can be accomplished much faster and while we are not likely to see such a meteoric rise of today’s developing markets, we will see a gradual evening out.  China, itself, is poised to be the #1 largest economy in the world suffice that global mobile dynamics are changing and generally favoring high-growth developing markets over saturated high-income markets.

The bottom line for developers is the reach for your marketing and advertising dollar as measured in downloads and average lifetime value of your end-users.

Internet of Things   –  Still young but overlapping with numerous technologies and endless devices, IoT is rapidly picking up steam.  Per Business Insider, the Internet of Things will add 24 Billion more devices and see over $6 Trillion in spending through 2020 and inherently ties into issues of Free Trade.  For developers, this opens the potential for developing apps enabling control platforms (smartphones, tablets, computers) to interact with a broader range of peripheral devices.

Much more than all of this is the ages-old belief in the “connectedness of all things” – it translates philosophy into common practice.  This has an inherent impact on marketing in that if you create apps for smartphones that can interact with toasters, that you could also be in the business of selling toasters.  The line by which “one thing ends and the next begins” will become increasingly blurred.

Real Time Translation - The ability for you to speak in English and your audience to hear you in Portuguese or Chinese is developing rapidly.  Granted, it may take a few more years to perfect; the more people who use this technology, the faster it will improve.  Real time translation capabilities will make it easier for everyone to do business on an international basis.

Digital Money   -  This is an epically complex matter driven not only by technology but by governments seeking to limit organized crime, terrorism, tax evasion, etc.; along with other far-reaching geo-political and corporate interests in connection with and tangential to free trade.

But of some practical value to developers is the fact that the ability for anyone with a digital device to make a digital purchase will become progressively easier.  One of the major constraints of developing markets until recently has been the difficulty for the end-user to make a purchase via the payment processor the developer is using.  This was an early mistake by many companies who asserted that, “People in developing markets don’t buy things.”  They do buy things, including smart phones and data plans.  The pay walls are gradually coming down.

Human Augmentation  - Some will consider this over the top, but we are moving in this direction.   Aside from overlapping with the Internet of Things and Real Time Translations, potentially the most practical… or perhaps interesting, technology relates to how we interact with computers – and especially how we “see” the data on computers.

One of the characteristics of mobile apps has been that they need to be designed for smaller screens.  It is one thing to work with a 16 inch computer monitor and another to work on a 4” x 6” screen (or smaller).  The gap between personal computers and mobile devices will continue to close, but the single greatest hurdle is the screen size.  One direction being explored could make your eyes the mirror of your CPU.

Most issues of human augmentation will not achieve an economy of scale for several years yet.  Oculus Rift became a household name with a $2 Billion acquisition for taking VR to the next level.  There is the potential for an ambitious company able to create a safe, easy to use, non-invasive device to do the same – and there will be the demand for corresponding software and apps.

And Artificial Intelligence.  While subject to endless debate, there are a few practical points to be made.  Many games of yesteryear failed largely because they didn’t provide enough of a challenge in solo-play.  This is as much a game design as it is a logic design issue.  Several companies are pursuing the development of AI and contrary to what the naysayers would like everyone to believe; each step in the development of an AI makes the next step in its development faster and easier – if in relative terms.  Whether we reach the point of Singularity is almost irrelevant in that each step in that direction facilitates faster, easier developments, almost on an endless loop basis.

Practically speaking?  It is not too much of a stretch to imagine it will be possible, one day, for app developers to focus almost exclusively on game design while providing an interface for an external AI to handle the logic of playing it (against humans)… with different difficulty levels.

Presently, most games provide the computer opponent lots of advantages while providing the human opponent various handicaps.  With a proper AI, those dynamics would likely be reversed.  It is hard to get game balance “just right for everyone.”  This has the potential to resurrect some much older game titles that could have been totally awesome games if only they were a challenge to play.

A look back to see where we are headed…

All of these topics could be explored in much greater depth – and I encourage you to do so.  Some of these points may be a bit of a stretch “today” – but tomorrow?  The first computer game I played was Pong, followed by games like Space Invaders, Pacman… Zork, Ultima before there was an Ultima II, back when the closest thing anyone had to the Internet was a local BBS (Bulletin Board System) relying upon ASCII… for graphics.

Now, we are talking about technologies that may be able to “digitize your brain” so that theoretically some part of “you” can exist “forever.”  Now, we aren’t talking about monochrome monitors, but holograms.  We aren’t using dot matrix printers and carbon paper much anymore, but literally using 3D printers to print houses.   I remember buying an IBM Selectric III for $1.00.

It’s on this basis that I tend to think less of what the state of technology is today and question what it will be tomorrow.  I remember when the common consensus was that the Internet was a passing fad despite all statistics to the contrary.  Those who assert “IT IS POSSIBLE” are proven correct infinitely more times than those who say the opposite.

History and Technology are not on the side of those who say, “It can’t be done.”

Previously, I noted that some more time will be spent looking at China.  Part of this extends from the recent interest of a Chinese investor group in acquiring Opera.  While not privy to those discussions, in my frequent meetings with members of think tanks, like Odessa’s own Nikolai Holmov, China is receiving greater and more frequent attention.  The nature of Chinese business activities are of a magnitude that warrants broader awareness, even if the implications are not specific to the mobile world, but of which the mobile world is certainly part.

One Belt, One Road – The New Silk Road entails a land-based and sea-based trade belt starting in China and stretching through the Middle East, into Europe and Africa.   While the list of countries to be formally included in the investment and development already in progress is not fully defined, it could include up to 40 or more countries.

Prospective countries (land and sea):  Afghanistan, Armenia, Brunei, Cambodia, Democratic People’s Republic of Korea, Egypt, Georgia, Indonesia, Iran, Iraq, Italy, Japan, Jordan, Kazakhstan, Kenya, Korea, Kuwait, Kyrgyzstan, Lebanon, Madagascar, Malaysia, Mongolia, Mozambique, Nepal, Oman, Pakistan, Philippines, Qatar, Russian Federation, Saudi Arabia, Somalia, Tajikistan, Turkey, Turkmenistan, Ukraine, Uzbekistan.

As Forbes.com’s Helen Wang poignantly quoted from the FinancialTimes.com,

If the sum total of China’s commitments are taken at face value, the new Silk Road is set to become the largest programme of economic diplomacy since the US-led Marshall Plan for postwar reconstruction in Europe, covering dozens of countries with a total population of over 3bn people.

A few noteworthy points regarding the scope of the New Silk Road:

  • Expected to reach $1 trillion in investments (from all parties) by 2020, with the Asian Infrastructure Investment Bank having already allocated $100 billion.
  • Will logistically connect roughly 70% of the world’s population.
  • Countries along the route represent about 55% of world GDP.
  • Aims to net $2.5 trillion (for China, alone) in additional trade over the next 10 years.
  • Logistical and infrastructure investments in road and rail networks, power grids, internet networks, pipelines and port projects.
  • Reduce delivery times from China to Europe by as much as 80%.

To say it is a “big thing” is an understatement, ranking right alongside (and above) the Trans-Pacific Partnership (TPP) and Transatlantic Trade and Investment Partnership (TTIP) – the “other” two major free trade agreements in the process of being formed.   It is appropriate to note that 1) China is not (presently) involved with the TPP and 2) the United States is not (presently) involved with the New Silk Road – though there may be some businesses from each country actively involved with projects associated with each.

Obviously, there are geo-political interests at stake, too – beyond the scope of this article, but one hypothesis is that economic development will serve as a catalyst to political and social stability (i.e. fewer wars and less terrorism).

So, what does the Silk Road mean to you?

First off, the New Silk Road is a major investment and development project, spanning hundreds (potentially thousands) of smaller projects for many years to come.  It is being done, it is continuing – so you can follow its development to see when, where and if you can fit in for a variety of contracts.  Knowing, also, that some areas presently lacking reliable internet access will (in the not too distant future) have reliable internet access provides opportunities for those who get in on the ground floor.

The broader implications are that China is poised to soon be the largest economic power and is beginning to challenge the predominantly “western” mega-corporations on several fronts, from oil to agriculture, but also in tech.  Word came out this week that Ali Baba is now the world’s largest retailer, surpassing Amazon.com and Walmart.  Fundamentally, many developers have mainly focused on the western market for profitability, but more and more eyes will be looking eastwards for potential volume.

Overall though, with three major “free trade vehicles” in motion (New Silk Road plus TTP/TTIP), the world is about to get more competitive, faster.

It was recently announced that Chinese investors have expressed an interest in Opera Software. I do not know and cannot comment on the specifics, but the news can be found on Reuters and Forbes. As it’s been a while since I’ve done a Market Insight post, this seems like a good time to take a look at how your app might fit the Mobile Market in China.

Demographics:

For starters, China has the largest population in the world with 1,375,150,000 people; about 90 million more than India. The urban cores of several cities have populations larger than many nations:

  • Shanghai – 24 million (more than the entirety of Australia)
  • Beijing -21 million (about the size of Romania)
  • Tianjin – 15 million (slightly smaller than the Netherlands)
  • Guangzhou – 13 million
  • Shenzen – 11 million
  • 11 more cities with a population over 5 million

China has 56 recognized ethnic groups, and nearly 300 living languages to go with them. By far, the most common language in China is Mandarin (960 million); with Wu, Yue and Min languages spoken by 60-80 million people each along with Jin, Xiang, Hakka and Gan spoken by another 20-45 million. While outside the scope of this article, the official language in Hong Kong is English.

This brings matters of app localizations to an entirely new level. Localization is critical in regards to both language and social-cultural look-n-feel. Marketing your app in English, or any other language, is not likely to win you many fans though over 100 million Chinese citizens do know English as a second language and the demand for English teachers and TOEFL tutors is very high.

Of additional demographical interest is the age and gender breakout to get a feel for the size of the market (in relative terms) by type of mobile app.

Age structure: % Male Female
0-14 years: 17.1% 124,340,516 107,287,324
15-24 years: 14.7% 105,763,058 93,903,845
25-54 years: 47.2% 327,130,324 313,029,536
55-64 years: 11.3% 77,751,100 75,737,968
65 years and over: 9.6% 62,646,075 68,102,830

Finances

In 2011, China’s GDP per Capita ran at roughly $5.6k and steadily climbed to roughly $7.6k in 2014; about 10% growth per year, but subject to fluctuations as all things are. What is important, however, is Purchasing Power Parity where $7,600 per year equates to about $13,000 in what it can actually buy. It is important to note that GDP per Capita and PPP do not necessarily reflect the actual average of household incomes (much lower), but are useful in relative terms.

China’s historically “cash is king” market is rapidly transitioning to electronic payment systems. Credit card circulation soared from roughly 25 million in 2002 to 186 million in 2009 and to over 450 million credit cards at the end of 2014.

Mobile Platforms and Proliferation

Per the World Bank, it is estimated that there are 93 mobile devices for every 100 people (up from 72 in 2011). Keep in mind that some people have multiple mobile devices and subscriptions. That equates to 1,275,000,000 mobile phones.

While over 70% of China’s mobile users have Android devices, few use Google Play, relying instead on over 200 other app stores. Thus, while the Chinese mobile app market is indeed massive, developing distribution channels is critical to achieve optimum performance.

Only two platforms are in play in China, Android (70%) and iOS (28%), with all others making up only 2%. It is important to note, however, that revenues are much greater for iOS apps than for Android.

Estimating an App’s Market Potential in China:

If you were to evaluate countries for which you would want to localize your app, China should rank pretty high on the list, especially if Mandarin is the target language. For the sake of a quick ballpark potential of app users, let’s presume we are considering a free to play game (with in-app advertising for monetization) designed to be interesting mainly to predominantly Mandarin speaking (spoken by 65+%), 15-24 year old males (106 million), factoring 90% have a mobile device, for a base population of 62 million.

Size of Prospective Market:

  • Android Market: 43.4 Million
  • iOS Market: 17.3 Million
  • Blackberry & Other: 300,000

Of course, reaching everyone in the market is another issue entirely, suffice that even selecting a fairly narrow niche the potential ROI for making your app available in Mandarin is likely greater than that of any other language. Girls are gamers, too, as are many under 15 and older than 24.

The Virtual Silk Road

China is an international player and has been in a long process of liberalizing and modernizing its market for many years. This short article could not possibly cover all of its important and very interesting impact on global trade, real or virtual. China is the largest online retail market with sales reaching over $400 billion in 2014 and estimated to reach a $1 trillion by 2019, per Forrester and TechCrunch. Factoring in purchasing power parity on a near 2 to 1 ratio, it would make sense for more developers to begin looking at China’s mobile market.

It may be a bit of an exaggeration, but in principle – yes, there is “free money” out there for those enterprising enough to find it and go after it. Enter the world of grants where governments, large corporations and sometimes universities, non-government organizations and private foundations provide money to do… something. Grants do not require repayment. For our purposes, we can also include “requests for tender” which are invitations for proposals.

The following are just a (very) few examples reflecting the variety of organizations issuing grants, what they are for, and grant sizes.

 

Are Grants Like a Lottery Ticket?

Before going further, I want to qualify that this is not “easy money” and it is not particularly “fast” either. Considerable research and paperwork is involved coupled with a sometimes lengthy evaluation process. It can take from 6 months to 2 years or longer to receive any funds – all variable per project and issuing organization.

On the other hand, grant money is money that is already budgeted. It is there and someone will get it. The number of people or organizations applying for grant money tends to be a small, but very competitive field. Quite simply, most grants are not widely advertised, few know about them, fewer still apply for them.

Grants are like a lottery ticket, except for two things. You can’t buy the ticket – instead you do the research, the paperwork and complete the application process which is specific to each grant. While you are not guaranteed to win a grant, the more familiar you become with the grant process the greater your chances of winning future grants. That comes through research, talking with other grant writers, being better prepared with the information needed for the next grant application, as well as developing relationships with grant-issuing organizations.

Grants are worth pursuing if you are:

  • a small-medium-sized business open to additional projects and revenue-generating opportunities
  • an organization actively engaging the “greater good” (i.e. civil society).
  • a developer focusing mainly on utility-based apps
  • an entrepreneur with good project management and team building skills
  • good with research and documentation and willing to network your skills with organizations interested in applying for grants

Grant Writing is a Job and Business Opportunity

The last of these deserves extra comment. Many businesses are involved directly or indirectly with the kinds of research, development, technology and other interests usually associated with grants – but are not involved in pursuing grants. Some of them would be if they knew about them and had someone able to pursue them (do the research to find them, coordinate the grant paperwork, go through the application process, etc.).

That could be a job for “someone” – potentially a small business unto itself. Essentially, those interested in this pursuit would first get tied into all of the different grant opportunities and look for other “aligned” businesses, developers or other business arrangements such as special purpose vehicles (SPV’s).

Where to Find Mobile App Grant Opportunities

First, this will often depend upon where you live (country/geographical region). Second, “following the money” will likely lead you to government agencies, large corporations, banks and universities – specific to your country. Additionally, you will want to keep an eye on international aid programs like USAIDEBRD (European Bank of Reconstruction and Development), the European Commission’s Horizon 2020 Project, various agencies of the United Nations, and all manner of Start-Up Accelerators and Incubators.

A more proactive approach would involve setting up a Google Alert or an “If This Then That” recipe to keep you notified of new grant opportunities as they are announced.

Requests for tender deserve mention in conjunction with grants in that they provide money for you to develop something much more specific.  This puts you in the business of being a subcontractor.  The big difference is that you will not hold the rights to the end product.

While most grants are for utility-based apps, there are occasionally grants awarded for games – especially with an educational bent.

Winning your first grant or bid will be your greatest challenge, but once you do – future applications will be easier not only for your familiarity with the process but for also having something to show. It probably won’t be easy.  Completing your first grant application might involve several days of effort.  After a couple, you can have all the work done in 1-2 days.  Then it is just a matter of waiting to see if you win or not – and not giving up on applying to future grants.

GritsYou have the potential to find an income in the world of mobile apps without being a mobile app developer.   There’s that old saying from West Virginia, “If we had some ham, we could have ham and eggs… if we had some eggs.”  What I am here to say is that you, too, can have ham and eggs even if you don’t have ham and eggs.  If you don’t like ham, switch it with grits…. grits and eggs.

Gee… thanks.

Okay, well, let’s put it a different way.  The difference between being self-employed and unemployed is that one of the two is waiting for someone else to provide them an opportunity (for an income).  A self-employed person will frequently pay out of their own pocket to find (or create) the same opportunities.

Fundamentally, it comes down to a lot of people perceiving they cannot generate an income because they don’t have something to market (or an audience in that market).  That something could be a product, but it could also be “any” job skill.  There are, of course, situations where the world is stacked against you or even an entire geographical region.  Even then, there are possibilities – provided we have the willingness and determination to seek them out.

But let’s skip the philosophy for now and jump into some distinct possibilities where you can find an income from mobile apps without being a mobile app developer.

Are you fluent in two or more languages? If so, you might examine freelance or even professional work for the “localization” of mobile apps. Many apps are released in a single or limited range of languages. Localization makes it easier for an app to engage users who speak different languages.

Being a localization agent works best for two types of markets. The first market concerns economy of scale as relates to language demographics coupled with mobile platform (Android, iOS, Java, etc.) penetration. The second concerns helping to open up new markets.

Localization will involve text, graphics with text, and possibly changes in an app’s graphics for greater cultural relevancy. The greatest technical hurdle is going to involve how any in-app purchases are handled. Localization can also be tied into additional local marketing services. This has the potential to be a full-time job or small business with a low (sub-$1k) to no upfront investment, other than your time.

The Local App Expert – If you are a good writer and can talk in front of an audience, being an “app expert” could be made into a part-time job. This presumes you know your way around a wide range of apps – games, utilities, the different app stores to include Opera Mobile Store and some basic troubleshooting skills.

The “conventional” approach these days is to set up a blog and a YouTube channel and eventually grow a following. The real benefits, however, involve going “old-school” and expanding into newspaper, magazines and journals, radio, possibly television, but with a heavy focus on lectures and speaking events.

Organizations – businesses, non-profit organizations, social clubs, retirement communities, etc., frequently host events. Often times, they like to bring in guest speakers for a topic and are even open to topic suggestions.

Add-on ideas include developing a niche specialization, becoming an expert on local e-governance components, and making arrangements with app developers to promote their apps during your events. While there is minimal financial investment required, it can take up to three years from a standing start to see some income. A creative, aggressive approach focusing on speaking engagements can help expedite revenue flow substantially.

The Niche App Expert has comprehensive knowledge on utility-based apps for a specific purpose. This is a lot like the local app expert, but here you are likely going to be focused on a specific industry or career field – but it could be international.

The venues you would be looking to get into would involve both online and offline magazines and journals, industry-specific membership web sites and podcasts, conferences, trade shows, exhibitions, possibly colleges and universities. Your theme is likely to be something about “apps to make your job easier.” With proper knowledge and positioning, you could expand into providing consulting and possibly training services.

There is quite likely to be a higher financial commitment to this approach as it may involve acquiring premium apps, keeping up with new devices, and subscriptions/admission fees for industry journals and events. You can try to get into events for free by requesting a journalist pass. Sometimes, trade mags provide free subscriptions to industry specialists as they may be making their money on advertising.

The Patron, The Investor and The Business Maker

My post on LinkedIn goes into more depth and additional options suffice that everyone has the potential to put “something” on the table (figuratively speaking). This is likely to translate to money, knowledge, resources, networking, or time. You have something to invest – and it is up to you how much you will invest and where.

The mobile app market is very interesting but largely not very different from any other market. Over 90% of mobile apps are distributed for free and that roughly 70% of developers are struggling to break even. That would imply it is a “different market” – but it parallels the same market dynamic faced by starving artists for over a thousand years.

Relative to the logistics and distribution involved in almost any brick-n-mortar business, the dynamics of mobile app development are exponentially easier and with near-zero cost.

The PROBLEM is that there is not a lot of handshaking going on between mobile app developers and old school business development, quality assurance, marketing and distribution. Of course, the big mobile app developers are not having a problem because they can afford to hire people with this experience (not that they always do).

The BENEFIT to resolving this problem stands in the risk to low investment ratio and return on investment potential for someone to help solve “one promising developer’s problems” in monetizing their app.

The process to doing that is getting people with business experience talking with mobile app developers and programmers. Mobile app developers… develop – they don’t really want to know more about marketing or business development. However, they can implement or integrate a significant amount of those marketing and business development components into their app code.

We all see “the problem in front of us” in a different way. That’s completely natural. How successful we are in solving the problem comes down to a combination of will and skills. What’s likely to perform better – one highly motivated person with one or two skill sets or a team of highly motivated people with all of the required skill sets? Good teams almost always win.