Monday, August 23, 2010

Mobile Monday, "So Many App Stores…Now what?"

I've learned that the mobile industry is a very sociable lot. Besides the big industry trade shows like CTIA Wireless and Mobile World Congress, here in Silicon Valley you can probably find some sort of meetup related to mobile technology at least once a week. With all these groups and associations to choose from, Mobile Monday stands out for its global reach (100 chapters worldwide) and longevity (10 years and running).

The "Silicon Valley" (must have annexed San Francisco) Mobile Monday chapter recently put together a panel for its monthly meeting on the topic of "So Many App Stores…Now what?", to address questions such as "What makes a successful app?", and "How do developers to actually get paid?"

The panelists included two representatives of manufacturer-owned app stores:

  • RIM: Ian McDonald - Manager, Developer Programs
  • Nokia OVI: Michael Bergen - Senior Manager, Developer Relations & Partnerships
Independent, multi-platform app store Getjar: Chris Dury - VP Products, and app review website Chomp: Ben Keighran - CEO/Founder.

The panel offered opinions and advice on a number of questions near and dear to the hearts of most app developers, posed by moderator Jessica Dolcourt - Sr Associate Editor at CNET/CBS Interactive.

Here are my edited notes from the discussion:

What about discovery & payment, these are major issues for developers?
  • OVI: don’t rely on app stores. Use co-marketing. Talk to stores to get marketing exposure.
  • Chomp: on their site apps are ranked by user ratings. To increase downloads, use AdMob, Tapjoy.
  • GetJar: designed to solve the problem, focus on how to monetize.
  • RIM: work with small app marketing shops, generate PR to get attention from media.
Strategies for monetization?

  • GetJar: most app stores are horrible for monetization. Itunes average ~$20/user. Payments are extremely hard.
  • Chomp: iPhone is now easier than ever to monetize.
  • RIM: (App World) an “open ecosystem” with option for selling apps, partner closely with carrier partners, preloads,  use GetJar, Blackberry ad service to supplement revenue, can aggregate ad vendors.
  • OVI: doing carrier billing is a pain. In markets where credit card billing and carrier billing are available (88 operators in 26 countries), have found up to 13X with carrier billing.
What are OVI, RIM doing to incentive developers?

  • RIM: 46M subscribers, common misconception - enterprise Blackberry users are only 50%, investment in new 6.0 platform, have 250K registered developers.
  • OVI: Nokia incentive is global reach, Forum Nokia.
  • GetJar: get featured, get viral, get downloaded/targeted. Developers should build a mobile website. It's not possible to rely totally on viral. Fragmentation will go on. To get targeted - address a segment, virtual goods. Productivity - antivirus is a good good category, top 10 on GetJar.
How to overcome bad reviews?

  • Chomp: app will be removed if review is bad. No 2nd chance!
  • RIM: From a VisionMobile report: the #1 source for feedback is friends. Use Mob4Hire to get feedback in a closed environment first. Problem with not testing in global markets, use DeviceAnywhere, Perfecto Mobile, incorporate localization.
  • GetJar: Developers always have a 2nd chance. GetJar believes that developers power the ecosystem, highlight the latest reviews.
Billing - preference for credit cards, PayPal, operator billing?

  • Chomp: people will buy if app is good. Price point on iPhone is $0.99. People spending ~$10/mo
  • OVI: all about ease of saying yes. Easy, secure & safe. Operator billing is a pain but easiest for consumers, and is important in developing countries where no credit cards.
  • GetJar: open billing solutions, PayPal and credit cards in U.S. Using credit cards for payment misses game users because of teen market. The design of app stores is limiting pricing. Suggests looking at the Facebook model, they have a smaller number of developers but higher revenue, higher engagement.
  • Chomp: users are now consuming apps like music.  Many users discovering new apps are “addicted” to consuming and shopping for the latest. There have been 17B searches across Yahoo, Google and Bing.
  • RIM: Why not a target making a good app vs. churn? Highly integrated apps are more sticky (LBS, address book, etc.)
How do developers use ads in apps?

  • GetJar: only iAd has enough penetration to be sustainable. Virtual goods model of Facebook, Tapjoy.
How many users needed to sustain a business?

  • GetJar: similar to music, $1/user, need to get to $10k-$25k level,
  • OVI: don’t skim on QA costs.
  • RIM: advised catching defects early, follow standard manufacturing/quality processes.
  • Chomp: start as early as possible talking to users. “What are you using now”? User-centric design for mobile apps.
Here are questions posed from the audience:

Comment/opinion from a developer:
$35k average developer cost for good app + $20K marketing cost, +$10K / iteration? Is average cost $80K? Claimed that $1800 is average revenue for paid apps.

  • GetJar: tough on iPhone for developers. Apple wants a lot of apps, but doesn’t care about how many make $$. Repeated point-of-view on strong advocates of mobile web for apps.
  • RIM: Advised using app as a launcher, widgets, code in HTML-5 with Java script launcher.
What % of developers are actually making money?

  • Audience member: < 5%
  • GetJar: activity now in apps as a marketing channel, trend for big web properties.
  • Chomp: (Mobile apps) like web in 90s, space is just starting to grow, still early.
  • RIM: comes down to the business model. Need to build an app not just a feature, the whole value proposition. 

Are developers clamoring for better app stores or better tools and platforms?
  • OVI: Qt (used to was develop Google Earth), can port to MeeGo and Symbian. Importance of mobile web: Qt has SDK, and Mobile web SDK.
  • RIM: it’s both, widget tool kits, Blackberry App World 2
So.. still want to be an app developer? It's become quite a gold rush, especially here in Silicon Valley. My observation is that developers are very much in demand, so the ROI is much more in your potential employability to one of the bigger mobile companies (or a startup) than in the money you are likely to make from making that 1-of-100,00 apps. 

Regardless... Get out. Get social. Join a mobile meetup group. It's lots of fun and you never know who you might meet.

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