Trends of the Mobile Economy

Apr 10, 2015

Vision Mobile, a research company focusing on the “app economy”, has released the 8th edition of its State of the Nation report. The report is based on survey responses from over 8,000 app developers across 143 countries. It covers the latest trends and developments in mobile and the Internet of Things, language adoption, and revenue models that the estimated million active app developers (2014) are using.

Here are the key takeaways:

mobile state of the union postPLATFORM WARS

They have ended in a stalemate. In terms of device sales, Apple has an increasing lock on the high-end and Android dominates the market everywhere else. No other platforms are making the kind of gains year-over-year to pose any threat to the top two. According to IDC, Apple and Android accounted for more than 96% of all smartphone shipments in 2014.

Developer mindshare illustrates the stalemate best; Android commands 40% and iOS has 37% of their attention. Most developers who are interested in revenue target iOS (According to Strategy Analytics research, iOS generates 89% of all mobile profits) and those looking for reach & scale prioritise Android first.

Despite this growth the report argues that desktop and mobile web are still the most important digital channel for business.

LANGUAGE ADOPTION

According to the survey, on both the server-side and device-side language share Java has the majority of developers using it as their primary language. RedMonk’s January 2015 programming language rankings also have Java (and JavaScript) at the front of the pack showing that the languages have sustained traction.

However, other language continues to rise in popularity. According to RedMonk, if the Android support in 1.4 matures, Go’s popularity would increase and the language would become one of the top 10.  Adoption of Apple’s new Swift language has been unprecedented. Vision Mobile’s report notes that 20% of all mobile developers are using Swift and 2% are using it as their primary language, only four months after its release.

monthly revenues from primary platformREVENUES

Vision Mobile predicts that mobile e-Commerce will account for $300 billion in 2015, or 2.5 times as much revenue as all other sources put together. However competition for this preferred income source is increasing. The app economy is maturing and large companies are finding better ways to make money through apps. Independent players have to compete with larger firms who have lower costs. In fact, in mature markets with higher smartphone penetration, small independent app developers are disappearing. This is causing revenues to polarize.

Revenues are also polarizing by platform priority. Developers, who prioritise iOS, earn more money than those focusing on Android. Android is not even the second best platform for revenues, the mobile browser is. And most surprisingly, developers that program for iOS first and then Android second, earn more revenue on that Android product, than developers who begin developing Android first.

MOBILE COMMERCE

  • Research from PayPal and Ipsos shows that mobile commerce is growing at almost three times the rate of overall e-commerce (42% vs. 13%)
  • Mobile commerce is still relatively small as a percentage of global online spending, but the prevalence of mobile shopping is significant
  • Mobile commerce is being driven by young adults – 59% of smartphone shoppers globally are between 18-34 years old

INTERNET OF THINGS (IoT)

The increased integration of computing and communications technology into everyday objects is slowly becoming the norm. Gartner, Inc forecasts that 4.9 billion “connected things” will be in use during 2015 – a 30% increase from 2014. Gartner estimates that the economic boost of IoT will support total services spending of to the tune of $69.5 billion in 2015. Some of these growth areas will be:

  • Smart Homes & Smart Cities
  • Wearables & Medical Devices
  • Connected Cars
  • Retail
  • Industrial Internet of Things

53% of developers in the Vision Mobile survey are already working on IoT projects (albeit as a hobby or side project). With no slowdown projected in the foreseeable future, many businesses have no choice but to pursue IoT. Developer trends should follow this growth.

CONCLUSIONS

  1. As platforms become increasingly entrenched, a mobile app development strategy is important, but an omni-channel client engagement strategy is paramount to success.
  1. There is great stability in programming languages being used by developers. Yet the future lies in also knowing a language specifically built for mobile, cloud computing or data analytics.
  1. With increasing competitive pressures on indie developers both at home and abroad, it is crucial to know which platform to prioritise, which revenue model to use, who to target (e.g. consumer, enterprise, etc.), and what your revenue source will be to stay above the app poverty line.
  1. Interconnectivity of everything is quickly approaching thanks to the maturing IoT market. For consumers, instead of building walled gardens, allow for integration of multiple products into your solution. For firms, IoT will continue to be valued for its cost savings. Show how your solution can help a company differentiate as well as transform their customer engagement

For more in-depth information on mobile application development and technology trends from providers like Forrester, Ovum and Datamonitor please visit our Market Intelligence webpage.

Todd Riopelle2Todd Riopelle is a market research analyst with Invest Ottawa with experience providing opportunity, competitor and market analysis for start-up tech companies. Previously, Todd studied International Business and had the opportunity to spend one year abroad in Lyon, France. You can reach him at [email protected]  

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