VisionMobile-Developer Economics Q32013

8/9/2019 VisionMobile-Developer Economics Q32013

http://slidepdf.com/reader/full/visionmobile-developer-economics-q32013 1/59

© VisionMobile 2013 | www.DeveloperEconomics.com/go

1




2

Contents

Key Messages

Chapter 1: State of the device nation, Q3 2013:

The inflexion point

Chapter 2: Ecosystem economics: competing

against the odds

Chapter 3: State of mobile developer Mindshare:

Q3 2013

Chapter 4: Choices, choices, choices:

Which platform is right?

Chapter 5: The multi-platform developer: It’s all

about priorities

Chapter 6: How developers mix and match

mobile platforms

Chapter 7: Developer attention in tablets catching

up with smartphones

Chapter 8: Developer revenue models: a box of

chocolates

Chapter 9: Developer tools: crossing the frontier

of platform innovation

Chapter 10: The kaleidoscope of HTML5 app

development

Chapter 11: Understanding the complex mosaic of

developer personas

Chapter 12: Sizing the app economy

Also by VisionMobile

Mobile Innovation Economics Workshop

A strategy workshop introducing the new economic

thinking necessary for successful innovation by telcos.

Find out more visionmobile.com/strategy

About VisionMobile ™

VisionMobileTM is an analyst firm helping companies

leverage and measure mobile ecosystems. We help telcos,

handset makers and companies outside the mobile industry

to create a competitive advantage using ecosystem

strategies. Our mantra: distilling market noise into marketsense.

VisionMobile Ltd.

90 Long Acre, Covent Garden,

London WC2E 9RZ

+44 845 003 8742

www.visionmobile.com/blog

Follow us on twitter: @visionmobile

Terms of re-use

1. License Grant. Subject to the terms and conditions of thisLicense, VisionMobile™ hereby grants you a worldwide, royalty-

free, non-exclusive license to reproduce the Report or to incorporate

parts of the Report (so long as this is no more than five pages) into

one or more documents or publications.

2. Restrictions. The license granted above is subject to and

limited by the following restrictions. You must not distribute the

Report on any website or publicly accessible Internet website (such

as Dropbox or Slideshare) and you may distribute the Report only

under the terms of this License. You may not sublicense the Report.

You must keep intact all notices that refer to this License and to the

disclaimer of warranties with every copy of the Report you

distribute. If you incorporate parts of the Report (so long as this is

no more than five pages) into an adaptation or collection, you must

keep intact all copyright, trademark and confidentiality notices forthe Report and provide attribution to VisionMobile™ in all

distributions, reproductions, adaptations or incorporations which

the Report is used (attribution requirement). You must not modify

or alter the Report in any way, including providing translations of

the Report.

3. Representations, Warranties and Disclaimer

VisionMobile™ believes the statements contained in this

publication to be based upon information that we consider reliable,

but we do not represent that it is accurate or complete and it should

not be relied upon as such. Opinions expressed are current opinions

as of the date appearing on this publication only and the

information, including the opinions contained herein, are subject to

change without notice. Use of this publication by any third party for

whatever purpose should not and does not absolve such third party

from using due diligence in verifying the publication’s contents.

VisionMobile disclaims all implied warranties, including, without

limitation, warranties of merchantability or fitness for a particular

purpose.

4. Limitation on Liability: VisionMobile™, its affiliates and

representatives shall have no liability for any direct, incidental,

special, or consequential damages or lost profits, if any, suffered by

any third party as a result of decisions made, or not made, or actions

taken, or not taken, based on this publication.

5. Termination: This License and the rights granted hereunder

will terminate automatically upon any breach by you of the terms of

this License.

Copyright © VisionMobile 2013

v.018




3

Key Messages

Our latest research of 6,000+ developers – the largest and most global

mobile developer survey to date – shows an unprecedented level of detail indeveloper attitudes, platforms preferences, revenues, revenue models used

and tools of the trade.

The Mobile Developer Mindshare Q3 2013 shows Android leading at 71% of

developers using the platform, followed by iOS at 56%.

HTML5 has entrenched itself as a mobile development technology of

choice, with 52% of the developer population using HTML5 technologies for

developing mobile apps.

Once we double click on that 52% of HTML5 mobile mindshare, akaleidoscope of colour and options appears. The largest share (38%) of

HTML5 developers develop mobile websites with another 23% developing

mobile apps, i.e. incorporating offline functionality and deeper browser

integration. Hybrid apps, such as those produced by PhoneGap, account for

27% of HTML5 mobile developers. A minority of 7% of HTML5 mobile

developers use platforms exposing native APIs via JavaScript, such as

Firefox OS, BlackBerry 10 and Windows 8. Last but not least, 5% of HTML5

mobile developers use a Javascript-to-native converter tool like

Appcelerator.

BlackBerry has been successful in transitioning BB legacy developers over

to its new BB10 platform, with the new platform having almost the same

mindshare as the legacy BlackBerry 5/6/7 had, just before the release of

BB10 six months ago.

The strong interest in Windows Phone observed in past surveys is still there

(35% of developers planning to adopt WP), but has subsided by 12

percentage points since Q1 2013. Mobile developers now have a wide gamut

of options with challenger platforms competing for their attention.

Windows 8 is at 40% of Mobile Developer Intentshare, followed byBlackBerry 10 (28%) and Firefox OS (capturing 27% of all developers

planning to adopt a platform).

There is no one-size-fits-all mobile platforms. Our research shows that iOS

is selected more frequently than average by developers that value revenue

potential (+12%), graphics (+7%), app discovery (+8%) and user reach

(+10%). Developers tend to use HTML5 more frequently as their primary

platform when they value porting (+9%) and speed & cost of development

(+4%). BlackBerry 10 is used more frequently than average as a primary

platform by developers valuing developer community programmes (+16%).




4

And Windows Phone is most popular for developers looking for the right

development environment (+3%) and documentation (+2%).

Whether hobbyists or IT managers of Fortune-500 companies, developers

use 2.9 mobile platforms concurrently, according to our recent survey of6,000+ mobile developers. This is the first time we are observing a shift

towards diversification, since our earlier 2011-2012 research pointed

towards continual platform consolidation: on average mobile developers

used 3.2 mobile platforms in our 2011 survey, compared to 2.7 in 2012 and

2.6 in our Q1 2013 research.

At 2.9 concurrent platforms on average, today’s developer is multi-

platform. In this world, not all platforms are equally important to a

developer. Prioritisation has an impact on which platform new apps and

features first rolled out on, as well as the focus, app quality, sales andrevenue on that platform. Our data shows that 84% of mobile developers

are using iOS, Android or HTML5 (mobile) as their primary platform.

Our research indicated developers prefer iOS (59%) over Android (49%) as

their primary platform. Whereas Android has 4x times more devices

shipping and a significant lead in Mobile Developer Mindshare, it lags

behind iOS in terms of Android developers using it as their lead platform.

Platform priorities also depend on the level of experience. Developers who

are fresh to mobile have a much stronger preference towards Android, with

almost twice as many new mobile developers preferring Android (40%)

than iOS (21%).

At $5,200 per developer per month on average, iOS continues to be the

most revenue-generating platform for developers, ahead of Android

developer monthly revenues by a margin of 10%.

Our research of 6,000+ mobile developers shows that there is no single

revenue model that is dominant across all platforms. On Windows Phone,

developers have a strong preference towards in-app advertising (43%) and

pay-per download (40%). BlackBerry 10 developers have a strong

preference towards pay-per download (47%). The picture is much more

balanced on Android, iOS and HTML5, with no revenue model dominating

to the extent observed on Windows Phone or BlackBerry 10.

Contrary to popular perception, money is not the only motivator for mobile

app developers - in fact, far from it. Revenues, in some form or other, are

the goal for just 50% of mobile developers.

The hierarchy of developer motivations shows some surprising findings. At

the base of the pyramid, the majority (53%) of mobile developers aremotivated by creativity or the sense of achievement, making this the most




5

popular motivator. The fun of making an app, is a motivator for 40% of

mobile developers.

Our research shows that developer tools are in the must-have app

development arsenal of the most sophisticated developers, and also thosemaking the most revenues. Across the tools spectrum, iOS developers are

the most active and sophisticated, with 92.5% reporting that they use at

least one tool. Therefore, iOS developers have an advantage due to the

higher percentage of tool users, which means they have the infrastructure to

innovate and differentiate.




6

About Developer Economics

Welcome to State of the Developer Nation, the 5th edition of Developer

Economics - the de-facto research series by VisionMobile on mobiledevelopment and the trends of the app economy. This report tracks the

state of mobile ecosystems, developer mindshare, monetisation trends,

revenue models and developer tools, based on the largest, most global

developer survey (over 6,000 respondents from 115 countries)

In this report, we take a close look at some of the latest trends in the mobile

ecosystem, including developer Mindshare and platform prioritisation,

platform adoption criteria, revenue models and revenues, as well as multi-

screen development. State of the Developer Nation examines some of the

top mobile platforms, pitting the three leading horses in the race (Android,

iOS and HTML5) vs. the newcomers (BlackBerry 10, Windows 8 and

Windows Phone) and the up-and-coming platforms (Firefox OS, Tizen,

Jolla, Ubuntu).

The findings and insights of this report are based on an online survey of

over 6,000 developers, as well as 21 phone interviews, conducted between

April and May 2013. The survey had an unprecedented global reach, with

respondents from over 115 countries worldwide. Our sample was balanced

between Asia, Europe and North America, but we also had a large number

of developers from Africa, Oceania and South America. In order to reach a

global audience and regional developer communities, the survey was

available in eleven languages (Arabic, Chinese, English, French, German,

Japanese, Korean, Portuguese, Russian, Spanish and Swedish).

We hope you'll enjoy our report - we've certainly enjoyed writing it! If you

have any questions or feedback, you can get in touch at

[email protected]. The contents of the report will also become

available in web format over the summer of 2013 at

www.DeveloperEconomics.com/go

AndreasP, Matos, Christina, AndreasC, Dimitris, Vanessa, Chris, Michael,Nick, Stijn and Mark at VisionMobile.

@visionmobile

www.visionmobile.com/blog




7

Thank you!

We'd like to thank everyone who helped us in this project and helped uscreate the best Developer Economics report to date!

Our sponsors, without whom we wouldn't have been able to complete thisproject: BlackBerry, Mozilla, Intel, Telefonica and MoSync.

Our Regional and Marketing partners, who helped us reach anunprecedented 6,000 developers across the globe, breaking new records forthe largest, global mobile developer survey.

The developers and mobile insiders that took the time and interest to sharetheir experiences with us.




8




9

Research Methodology

Developer Economics 5th edition is based on a large-scale online developer

survey and 21 one-to-one interviews with mobile app developers.

The online survey was designed, produced and carried out by VisionMobile

over a period of five weeks between April and early May 2013. One to one

interviews were conducted from May to June 2013.

The online survey received over 6,000 responses, making this the largest

mobile developer survey to date. Respondents to the online survey came

from over 115 countries. The online survey was translated to 10 languages

(Arabic, Chinese, French, German, Japanese, Korean, Portuguese, Russian,

Spanish, Swedish) and promoted by 46 marketing and regionalpartners within the app development industry. As a result, the survey

reached an unprecedented number of respondents, globally balanced across

Europe (40%), Asia (24%) and North America (28%). The survey also

attracted a significant developer sample from Africa (3%) and South America

(5.5%).




10

Respondents came primarily from the US (18.7%), India (13.9%) and the

UK (5.6%) followed by Russia, Germany and France and stretching all the

way to Venezuela, Uruguay, Vietnam and Kazakhstan to name a few of the

115+ developer countries who participated, making this research truly

reflective of the new, global, mobile app economy.

The survey gathered responses from developers using as their main

platform Android, Bada, BlackBerry 5/6/7, BlackBerry 10, Chrome,

Facebook, Firefox OS, Flash / Adobe AIR, iOS, Java ME, HTML (targeting

desktop), HTML (targeting mobile), OSX (desktop), Qt, Symbian, Windows

(desktop), Windows Phone, Windows 8 and Tizen. We excluded

respondents not using a mobile platform as their primary development

platform.

To minimise the sampling bias for platform distribution, we compared thedistribution across a number of different developer outreach channels and

identified statistically significant channels that exhibited the lowest

variability from the platform medians across our whole sample base. We

derived a representative platform distribution based on these channels and

weighted our results based on this distribution, as depicted in the graph

below.




11

CHAPTER ONE

State of the device nation, Q3 2013:

The inflexion point

2013 presents an inflexion point in the evolution of app ecosystems. Apple’s

iOS and Google’s represent an unprecedented 92% of all smartphone

shipments in Q1 2013, fueling claims that the platform landgrab has ended.

At the same time, a new breed of mobile platforms, BlackBerry 10, Firefox

OS and Tizen are appearing on handsets in 2013, hoping to compete with

the Apple/Google duopoly where Microsoft’s Windows Phone has failed to

compete.

Android: the falling price floor

The production of feature phones (i.e. phones without an app ecosystem)

has long turned into a commodity business of low-margin, sub-$50 phones

for mostly developing markets, whose pricing boundary is defined by the

lowest-priced Android handset. As the price floor of Android handsets

continues to drop, shipments of feature phones are in a steady and

predictable decline for the past two years, and have been for the first time

surpassed by smartphone shipments.

Of the top handset manufacturers, only Nokia is still shipping feature

phones in their majority, with all other handset makers - led by Samsung -

having refocused on smartphones. Interestingly, Nokia is one of the few

handset makers who can squeeze profits out of low-end feature phones.

Nokia’s 105 feature phone retails for $20, with a 29% gross margin

according to IHS.

It might still take years for the installed base of billions of feature phones

out there to be replaced in their majority by smartphones, but the shift in

the sales base has already started. Manufacturers such as Nokia who relyprimarily on feature phone sales, having failed to successfully transition

from own Symbian to Microsoft-powered smartphones, will continue to

lose market share and revenues.

The market continues to be flooded by Android devices, from low-end, $50

retail, feature-phone replacements with no data plans, to high-end, $700

devices on flat data tariffs. In Q1 2013, Android claimed 75% of all

smartphone shipments, while iOS claimed another 18% leaving very little

room for anyone else. 2.5 years since launching its latest Windows

Phone platform, Microsoft is still struggling to make inroads in

smartphones, capturing a measly 3% of smartphone sales.




12

Microsoft’s latest attempt at gaining a mobile market share is Windows 8,

the latest hybrid tablet/notebook version of Windows, with sales slightly up

on a quarterly basis but no sign of being an imminent threat to either

Android or iOS.

A new wave of platform challengers hits the

device floor

Developer momentum is building up on the HTML5 front, despite the

negative sentiments created from Facebook’s transition to native apps.

Developer Mindshare puts HTML5 almost on par with iOS and Android as

we shall see. A new set of platform challengers - Firefox OS, BlackBerry 10,

Windows 8, Tizen, Jolla and Ubuntu - aim to capitalise on the millions of

existing web developers that have yet to step into mobile, and of course the

formidable mindshare of HTML5 among mobile developers.

Among new entrant platforms, BlackBerry 10 is gradually making a

transition into the company’s shipment mix, shipping 40% of BB10-

powered devices out of 6.8 million smartphones in Q1 2013. Firefox OS has

recently announced the first two devices hitting the market - the Alcatel

OneTouch Fire and ZTE Open - the latter just launched in Spain fromTelefonica for !69 ($90) contract-free including !30 ($39) of airtime for




13

prepaid customers. Tizen handsets are not expected in the market before

Q4 2013, with Ubuntu devices planned for 2014

Among handset makers, Samsung remains in lead position in smartphone

sales, followed by Apple. LG finds itself in third position, partly due to

positive sales of the Google-branded Nexus 4 in the first quarter of the year.

BlackBerry and Nokia continue to lose market share and continue to resist

jumping on the Android platform bandwagon.

The handset maker consolidation at the top end, led by Samsung, is also

combined with a fragmentation of smartphone makers at the long tail of thedistribution. The “other” segment of smartphone manufacturers is

now selling as many devices as Samsung. These handset makers

are made up of 100s of Android handset producers, leveraging off-

the-shelf hardware platforms from Qualcomm and Mediatek and

delivering customised Android handsets to Asia and Africa, with

as small as a 10-people production team and own distribution

networks. In this sense, Samsung’s biggest competitor in terms of market

share isn’t Apple, but the 100s of handset makers who are able to supply the

cheapest possible smartphones, customised for every corner of the

developing world.




14

The elusive ticket to smartphone profits

While Android is a ticket to the smartphone market for handset

makers, it’s not a ticket to smartphone profits. In Q1 2013 HTC’s

profits were down by over 90% and was overtaken by Chinese vendorsHuawei and ZTE mainly due to their exceptional performance in the Chinese

market.

Competition among OEMs in the Android camp is intense: all major

Android vendors are pushing “hero devices”, i.e. cutting-edge smartphones,

in the hope that they will be able to capitalise on features, brand recognition

and retail relationships to increase their market share.

However, profits are elusive for all modular handset makers (i.e. everyone

other than Apple and BlackBerry) with one exception: Samsung. In amodular market, differentiation for handset makers is scarce. As such,

profitability has little to do with the platform - be it Android, Windows

Phone or Firefox OS - and everything to do with the current industry

structure.

The reason Samsung is solely making profits among modular

handset makers is because they have realised that there are no

profits to be made in handset production itself. In other words,

hardware is dead. Instead, value has migrated to upwards in the

technology stack (to services) and downwards (to handset

components).

Samsung owns the design and production of memory, processors and

screens, which make up the most visible components (in terms of features)

and most expensive (in terms of hardware cost). This gives the handset

maker two unique benefits.

- Time to market: Samsung can secure availability of these components

first in the market, and ahead of all competing handset makers, including

Apple, which it supplies. Time to market is crucial to handset makers, as

every month of handset delays is equivalent to an estimated 15 milliondollars of lost handset profits, since the development cost is already sunk.

- Lower price points: Samsung can secure those components at the

lowest price point possible, thereby making room for profits. It is the

ownership and integration of hardware components that makes Samsung

profitable amongst all module handset makers.

Samsung can then reinvest those profit gains in advertising (where

Samsung spends more than Coca Cola), R&D (e.g. Tizen), distribution

partnerships and acquisitions that strengthen the competitive advantage it

already has, creating a virtuous cycle. For an analysis of Apple’s and




15

Samsung’s profit recipe see VisionMobile’s 2012 Mobile Insider research

note at www.visionmobile.com/insider

It’s not just smartphones eating into feature phones. It’s also tablets which

are eating into PCs (notebook & desktop) shipments. In Q1 2013, PCshipments experienced a sharp slump ending a two-year period of

a stalled, but relatively stable PC market. This has allowed tablets

to claim an even larger share of the combined PC-tablet market,

now accounting for over 39% of total devices sold. The rise of tablets

has been assisted by the significant sales of Android tablets, including the

Google Nexus. Android now claims a higher market share of tablet sales than

iOS, although many of the Android devices are low-spec offshoots.

While tablets are not direct PC replacements, they are to some extent

substitute products for desktop and notebook PCs. Given the lacklustre

sales of Windows tablets, the erosion of the PC market share in the

combined mobile computing category (tablets, notebooks) has an adverse

effect on Microsoft. As a result, the company sees its 20-year dominance in

the computing world being threatened as it fails to build up scale in mobile

computing.




16

CHAPTER TWO

Ecosystem economics: competing

against the odds

2013 presents an inflexion point as a new set of challengers to the

iOS/Android duopoly appears. Two years after Microsoft and Nokia

debuted their new mobile strategy with Windows Phone, a new set of

entrants have surfaced, namely BlackBerry 10, Firefox OS, Tizen, Ubuntu

and Jolla. The challengers have chosen to compete head-to-head with Apple

and Google, rather than disrupt them.

Ecosystem economics clearly act in favour of the dominant players, and with Android and iOS literally dominating consumer and developer

mindshare, challengers that aim to change the status quo are competing

against the odds. Understanding ecosystem economics means

understanding whether and how the new entrants can challenge the

duopoly.

Android and iOS have grown on the back of strong network effects, whereby

they grow stronger with each user and developer added to the ecosystem.

Users drive demand for apps and hence developers. Developers and apps

drive user adoption.

Network effects take place not just between users and developers, but also

between all four sides of app ecosystems, including handset manufacturers,

and network operators. The next chart shows the network effects at play

within the iOS ecosystem, and the value added and captured, by each side.




17

The Android-iOS duopoly is still holding strong with no sign that it can be

challenged in the foreseeable future. Once network effects have kicked in

and scale has been achieved, it is almost impossible for contenders to

compete directly and displace the leaders. Beyond network effects, the

incumbents have established developer habits, user stored value into the

apps themselves, external subsidies in the form of developer time & effort,

and abundant telco support.

Any challenger to the Android-iOS duopoly therefore faces an uphillstruggle and, as mentioned earlier competes against the odds. Markets

dominated by network effects are what we call “Black Oceans”. Whereas

Blue Oceans exhibit no competition, Red Oceans are shark-infested, Black

Oceans make it near-impossible to compete. Even Microsoft with an

estimated over 5 billion dollars invested in Windows Phone has managed to

secure a tiny 3% smartphones sales share in 2.5 years since the platform

launched.

The iOS ecosystem drives the core business of Apple: device sales

Source: VisionMobile | http://visionmobile.com/M2M | June 2013Licensed under Creative Commons Attribution 3.0 License




18

Asymmetric competition

Instead of competing directly with the Apple/Google duopoly, a far more

effective strategy is to follow the recipe that brought down the pre-iPhone

industry and installed iOS and Android at the top of the app economy: notdirect, but asymmetric competition. It will take a fundamental change

in the basis of competition to uproot either of these platforms

from their positions.

This strategy requires contenders to compete not directly, but challenge the

control points of modern ecosystems: app development, distribution and

consumption of apps. This is exactly the strategy followed by Amazon and

Facebook, and inadvertently by some HTML5 proponents.

Facebook for example competes with iOS/Android by diluting the

ecosystem control points rather than head-on. Facebook offers App Center,

an alternative to the native app marketplaces for distributing apps, and

Facebook Home, an alternative to app stores for consuming apps. In turn,

Amazon offers it’s own App Store for distributing and consuming Android

apps on Kindle devices, which is bundled on certain handsets or carriers,

including Verizon Droid devices.

Three platform control points to stimulate network effects

Source: VisionMobile | http://visionmobile.com/M2M | June 2013Licensed under Creative Commons Attribution 3.0 License




19

Challenging the odds

Mozilla, along with several carrier partners, have launched Firefox OS, a

browser-based mobile platform. Mozilla is taking HTML5 from a set of

specs and APIs into a fully-fledged ecosystem, including an app store,

monetisation and handset maker deals with Alcatel and ZTE.

Our Developer Economics Q3 2013 data indicates that HTML5 has almost

equal mindshare to Android and iOS among mobile developers and is

leveraged heavily by enterprise IT staff mobilising corporate assets. Mozilla

is also using its browser installed base to increase brand awareness of

Firefox OS towards desktop users. The browser company is also a thought

leader amongst the millions of web developers out there. Despite these

assets, we argue that Mozilla should spread its bets, not just by competing

head-on, but also on diluting the iOS and Android control points - forexample by helping web developers create good-as-native, browser-less

apps on any platform, and integrating native app search within its desktop

browser search.

Microsoft has played the synergy card, aiming to bridge and cross-sell

Windows Phone and Windows 8 products to both developers and users.

Nevertheless it is currently struggling on both fronts: Windows Phone is not

even close to the point of being considered a challenger for iOS or Android,

but, perhaps more worryingly for Microsoft, Windows 8 has been having a

difficult time spurring the update cycle on the desktop/notebook front.Right now, Microsoft’s mobile strategy appears dispersed across

smartphones, tablets and notebooks that look like tablets.

Microsoft needs to solve a fundamental challenge: that its software

licensing business model is outdated in the post-Android age, in that

handset manufacturers are unwilling to pay software royalties for licensing

the operating system. Right now, Microsoft’s mobile division

appears to be more successful as a patent licensing business,

than a software licensing business.

BlackBerry 10 has finally appeared on the market and judging by our data

on developers’ reactions the company has managed to shift mobile

developer mindshare from the legacy platform to BB10. BlackBerry have

reduced barriers to entry for developers by providing a straightforward

porting facility for Android apps to BlackBerry 10. Webworks also provides

a hybrid native/HTML5 path for web developers allowing access to

hardware APIs and UI elements on BlackBerry 10.

While developer barriers to entry are quite low, consumers have not yet

adopted the new platform as BB10 handset sales in Q1 2013 reached 2.7

million handsets, well below the expected 3.3 million. BlackBerryMessaging is giving way to WhatsApp as BB users’ favourite messaging




20

platform. The entire BYOD (bring-your-own-device) megatrend is

essentially about migrating enterprise users away from CIO-sanctioned

BlackBerry devices. BlackBerry has performed extremely well in

terms of developer mindshare, but its user mindshare is

underperforming, and both are needed to sustain theecosystem’s network effects.

Samsung’s bada platform was designed as a negotiating card against Google

- as an alternative Samsung could use to offset the power of Google on its

handset features and software. With Samsung becoming the Android

kingmaker, the tables are now reversed and a negotiating card is no longer

needed. Instead, Samsung’s new platform Tizen is an effort not just to

break its reliance on Android, but more importantly to copy the Apple

recipe, in the form of a fully-controlled platform. Samsung’s challenge is to

modernise a legacy Tizen OS (based on the older SLP platform, withfragments of Maemo and LiMo software) and to convince developers to

back yet another app ecosystem. It also needs to revamp the language the

company speaks with developers,, from the legacy mobile industry language

still reminiscent of the Android launch era of 2008 (“Tizen is an open

source, standards-based software platform supported by leading mobile

operators, device manufacturers, and silicon suppliers”)




21

CHAPTER THREE

State of mobile developer:

Mindshare, Q3 2013

Has the platform landgrab ended? Well, Android and iOS maintain their

Mobile Developer Mindshare since our last survey published in Q1 2013.

Our latest research of 6,000+ mobile developers shows Android leading at

71% of developers using the platform, followed by iOS at 56%. HTML5 has

entrenched itself as a mobile development technology of choice,

with 52% of the developer population using HTML5 technologies

for developing mobile apps. The Mindshare chart shows the % of

developers using each platform out of the total mobile developer

population.

We still stop short of calling this a triopoly though, for two good reasons.

Firstly, HTML5 is a technology stack, not a full ecosystem like Firefox OS.

Secondly, most HTML5 mobile developers are targeting the browser, with a

minority targeting iOS/Android app stores through PhoneGap, so in any

case end up “hitting” the same iOS and Android devices which form the vast

majority of smartphones sold.

__________

Comments?




22

Meanwhile Windows Phone has - for the third time running - failed to

capitalise on the huge interest that developers have shown in the platform,

remaining in fourth place, significantly behind the incumbents. Despite

extensive marketing efforts, slightly increased sales of Windows

Phone devices and generous developer programs, Microsoft isstill struggling to convince developers that its platform can

compete head-to-head with Android or iOS, since the platform

lacks in user reach, which is the most motivator for developers to

invest in a platform. To adopt a new platform, developers need to

consider not just the learning curve of Windows Phone, but also the

opportunity cost of scaling down on iOS or Android. Where these costs are

softened is the case of Windows 8, which can attract traditional developers

who haven’t yet made the transition to mobile and are already familiar with

the Windows toolset. Still, user reach remains a fundamental platform

adoption reason, and in 2013, the tables are clearly skewed towards

Android and iOS.

BlackBerry has managed to retain Mobile Developer Mindshare,

with the new BlackBerry 10 platform having almost the same

mindshare as the legacy BlackBerry 5/6/7 had just before the

release of BB10 six months ago. While it lags behind WP in terms of

Mobile Developer Mindshare, BB10 does pose a viable threat to Windows

Phone as it has managed to amass a sizable following in just a few months

following its initial launch. This makes BB10 one of the most successful

operations of transitioning developers across platforms.

Beyond BlackBerry 10, the decline of older generation platforms such asJavaME, Flash/AIR and Symbian continues, as the platforms are being

phased out, with the device sales base declining with the Developer

Mindshare. These platforms have now become case studies of the demise of

once thriving ecosystems of the pre- app store era.

Samsung’s bada experiment is coming to an end, having failed to

gather Developer Mindshare despite a promising user reach, that

saw higher sales than Windows Phone in 2011 and most of 2012.

In retrospect, bada’s performance is exactly the opposite that of BB10:

where BB10 thrives in developer mindshare, it suffers in device shipments(the equivalent of user mindshare).

The case of bada is also an interesting example of the network

effects that dominate app ecosystems: user adoption does not

suffice in the new app economy. The positive feedback loop must

include developers who benefit from an increased user base. If developers

are left out of the loop, the necessary network effects will not kick-in and

the platform will fail to grow. Samsung’s and Intel’s attempt at a home-

grown platform, Tizen has some early developer adopters but with no

devices in the market it is too early to risk predictions.




23

Developer Intentshare

The Q3 2013 Mobile Developer Intentshare data shows a few new kids that

have appeared on the block.

The strong interest in Windows Phone observed in past surveys

is still there (35% of developers planning to adopt WP) but has

subsided considerably since November 2012 (47%) as new

contenders BlackBerry 10 and Firefox OS are capturing

developer attention, with over a quarter of developers expressing their

interest in each of the latter platforms. Microsoft’s inability to convert

Windows Phone interest into adoption is due to lack of commercial traction

(the equivalent of user mindshare), with Windows Phone sales accounting

for just 3% of smartphone sales in Q1 2013.

BlackBerry has been successful in transitioning BB legacydevelopers over to its new BB10 platform, and creating the third-

highest Mobile Developer Intentshare after Windows 8 and

Windows Phone at 28% of all developers planning to adopt a new

platform. The real challenge for BlackBerry now is not to transition, but to

recruit new developers, as Firefox OS and Windows 8 are gaining

momentum and competing for Developer Mindshare. The ease of porting

Android apps to BlackBerry will lower barriers for developers that want to

experiment with BlackBerry, but the company’s biggest developer relations

headache will be Microsoft’s sizable developer marketing budgets for

Windows 8.




24

Mozilla, has provided the missing web platform: until now web technology

lacked the ingredients that would turn a technology solution into a

platform: as a single API set and development environment, and a means to

distribute, monetise and discover web apps. With HTML5 already being

used by more than half of mobile developers, the prospects for Firefox OSare looking good and there is a very healthy level of interest in the platform.

Our data shows that 27% of developers are planning to adopt

Firefox OS, out of those that plan to adopt any platform. In terms

of Mobile Developer Intentshare, this puts Firefox OS just ahead

of iOS and Android.

In just a short space of time, Firefox OS has managed to amass a

respectable Developer Intentshare, even before devices hit the market, and

while competing for Windows Phone, Windows 8 and BlackBerry 10 all of

which are much older platforms, with devices in market and billions of

market dollars behind them. The insight here is that early adopters are

driven by the promise of HTML5 openness and cross-platform capabilities.

Yet Mozilla needs to deliver on its promise. Much like BlackBerry, Mozilla

must deliver value to both developers and users to succeed where Microsoft

has so far failed. Getting right one part of this equation (e.g. just

developers) will clearly not suffice. And profitability for smartphone makers

has little to do with using Firefox OS or Android.

Tizen exhibits some level of developer interest but without any devices in

the market it is too early to say whether this will materialise beyonddeveloper hype. Tizen’s HTML5 pedigree is aiming at attracting web

developers and it’s “open-source, standards-based software platform” is

aimed at softening the dependence on Samsung.

While several platforms currently appear as distant challengers

to the Android-iOS duopoly, the economics of app ecosystems

are such that any position below the top is unsustainable. The

governing network effects favour the growth of the first comer

platforms while inhibiting the growth of laggards.

Platform owners do not only face the challenge of recruiting developers, but

also convincing users that iDevices and Androids are not their only option.

This is much easier to achieve in developing markets where Apple is weaker

(such as in Africa) or where, for example, BlackBerry is stronger (such as in

South America). Indeed, there are significant differences in platform

adoption across regional markets. This is due to different demographics or

regional influence that vendors have achieved by focusing on specific

markets.




26

CHAPTER FOUR

Choices, choices, choices. Which

platform is right?

The Apple/Google duopoly is the safe choice. It commands a phenomenal

Mobile Developer Mindshare, with 86% of mobile app developers using

either iOS or Android as evidenced by our recent survey of 6,000

developers - and a staggering 42% of developers using both platforms.

These numbers are no less phenomenal than the combined market share of

iOS and Android handset sales, which reached 92% of all smartphones in

Q1 2013.

But what about developers venturing beyond the duopoly waters? Choices

like HTML5, Windows Phone, or the newer Windows 8, BlackBerry 10,

Firefox OS, and the upcoming Tizen, Ubuntu and Jolla. Which platform is

right? Or better: which platform is right for *me*?

Our latest research shows that developers’ platform choices

depend very much on the goal they aim to achieve. When it

comes to platform selection, contract developers will opt for

platforms that will generate more revenue, CIOs will focus on

efficiency and low cost, CMOs will focus on reach, while

hobbyists will want to experiment with newer platforms. For an

analysis of the hierarchy of developer motivations see our Developer

Segmentation Q3 2013 report.

Rather than asking which is the best platform, we asked something more

meaningful. That is: which platform is right for me? The next chart analyses

the choices developers make most often (and least often), when they chose

a platform for a specific reason. Pick what platform aspect is most

important for you, and then see which platform other developers selected

most often, according to our survey of 6,000+ mobile app developers.

__________

Comments?




27

Our research shows that iOS is selected more frequently than

average by developers that value revenue potential (+12%),

graphics (+7%), app discovery (+8%) and user reach (+10%).

However, it is selected much less frequently by developers that value nearly

every other quality, and in particular open standards (-24%), community

programs (-21%) but also portability (-9%) and choice of development

environment (-8%).

Android is selected as a primary platform more frequently by developers

that value open standards (+16%) but lags when it comes to app discovery

(-4%).

Developers tend to use HTML5 more frequently as their primary

platform when they value porting (+9%) and speed & cost ofdevelopment (+4%) but less if they value rich APIs (-6%) or

graphics capabilities (-6%). Finally, BlackBerry 10 is used more

frequently than average as a primary platform by developers valuing

developer community programmes (+16%). And Windows Phone is most

popular for developers looking for the right development environment

(+3%) and documentation (+2%).

For developers deciding which platform to invest in, the earlier chart offers

some peer advice. Do I need deep access to device APIs for the type of apps

I will develop? Am I looking to experiment? Do I need a marketing edge in

less crowded platforms? Is reach more important than money? The samechart will help the platform vendors themselves understand how they score




28

against the competition in each of these attributes and the areas they need

to improve to remain competitive.

Overall, three platform selection criteria dominate: revenue potential, user

reach and speed & cost of development. The next chart shows which are themost important selection criteria for developers Android, iOS, HTML5

mobile, Windows Phone or BlackBerry 10 are their main platform.

Speed and cost of development is a dominant selection reason

for all developers except those that mainly develop for iOS, who

value revenue potential above all (+12% above average). This sets

iOS apart from the other four platforms that seem to offer little

differentiation among them in this respect. Of course, revenue

potential is not an all-or-nothing attribute. But having a clear

advantage in one area makes platform selection a lot simpler.




29

CHAPTER FIVE

The Multi-Platform Developer: It’s

all about priorities

Despite the candid efforts of Apple and Google, today’s developers are not

wedded to any single platform.

Whether hobbyists or IT managers of Fortune-500 companies,

developers use 2.9 mobile platforms concurrently, according to

our recent survey of 6,000+ mobile developers. This is the first

time we are observing a shift towards diversification, with our

earlier 2011-2012 research pointing towards platform

consolidation: on average mobile developers used 3.2 mobile

platforms in our 2011 survey, compared to 2.7 in 2012 and 2.6 in

our Q1 2013 research.

The new entrants of Windows 8, BlackBerry OS are capturing not just

developer hope and hype, but actual investment of developer time, money

and effort. And there are good reasons. More platforms allow developers to

increase reach, diversify revenue opportunities, spread their risk, and cater

to new requests for commissioned app development work.

Platform discrimination

At 2.9 concurrent platforms on average, today’s developer is

multi-platform. In this world, not all platforms are equally

important to a developer. Platform discrimination is abundant.

Developers’ platform prioritisation will follow their selection criteria,

whether it is revenue, reach, cost, speed, discovery or dev environment that

they are after. Beyond the lead platform, our data shows that developers are

making conscious decisions to down-prioritise platforms to second, third or

even fourth place.

The lead platform is where new apps and features are first rolled out and

which is always the star of the marketing launch. Prioritisation will also

have an impact on focus, app quality, sales and revenue. As such, the way

developers prioritise the platforms has a direct impact on the overall

perception of the platform. Consider that if most developers treat a

platform as a second-class citizen, this will reflect negatively on the app

quality and consequently, on developers’ revenue opportunity on that

platform. Developers that prioritise a platform will act as evangelists for

that platform, as they ‘re likely to create the highest-quality, most up-to-

date apps and speak out for the platform at events or social media.




30

Our data shows that 84% of mobile developers are using iOS, Android or

HTML5 (mobile) as their primary platform, as the next chart shows.

Android and iOS are the dominant primary platforms, preferred by 34.4%

and 32.7% of mobile developers respectively, while HTML5 is the priority

platform for 17.3% of mobile developers.

Naturally platform priorities are not one-size-fits-all. We see very clear

trends emerging in developers prioritisation of iOS vs Android, based onaudience targeted, developer experience, and app category.

The audience targeted (B2C vs B2B apps) has a significant impact on the

primary platform selected. Looking at the consumer vs. enterprise app

market, we observe that while iOS and Android are equally important to

developers in the consumer segment, developers targeting enterprises have

a stronger preference towards iOS. Moreover, HTML5 is the platform of

choice for a quarter of all developers targeting enterprise customers.

Platform priorities also depend on the level of experience.Developers who are fresh to mobile have a much stronger

preference towards Android, with almost twice as many new

mobile developers preferring Android (40%) than iOS (21%). This

is most likely related to the steeper learning curve and higher barriers to

entry for iOS, such as ownership of a Mac development machine and the

$99 developer fee. More experienced developers tend to adopt iOS as their

main platform: 44% of developers with three to five years of experience will

use iOS as their main platform vs. 31% that select Android.




31

Platform priorities are also influenced by the category of apps developed:

Games developers have a slight preference towards iOS as their primary

platform (37% vs. 35% for Android), while developers of music & video appshave a preference towards Android over iOS (36% vs 29%).

"From a business standpoint, there's a lotof education needed for the acceptance ofHTML 5. There's a gap between what wedevelopers can provide and what theclient thinks we can provide."

Ciprian Borodescu, CEO, Webcrumbz

More importantly, platform priorities depend heavily on the developer

motivations, according to VisionMobile’s Developer Segmentation Q3 2013

report. Guns for Hire and Hunters who are motivated by app revenues most

often prefer iOS. BlackBerry 10 and Windows Phone are frequent favourites

for Hobbyists and Explorers who are experimenting and care about

learning and having fun. Finally, Android is a most popular choice for all

other segments - Enterprise IT, Product Extenders, Digital Content




32

Publishers and Gold Seekers - who are motivated by extending a non-

mobile business with apps.

"Content is king… develop apps butdeliver content."

Jaime Enriquez, CEO, Inode

The real measure of developer loyalty

To understand the true picture of the multi-developer world, look not at

how many SDKs are downloaded per day, monthly active uniques on

developer websites, attendees at developer conferences, or how many

billions spent in developer marketing. Instead, to understand the true

picture of today’s multi-platform landscape, look at where developers are

putting their effort, time and money.

In the words of Andy Grove, former Intel CEO:

“To understand a company’s strategy, look at what they actually do rather

than what they say they will do.”

Developers’ strategy is set by the hundreds of everyday decisions about

where developers spend their effort, time and money. To unveil how

developers are really using the top-5 platforms we look at developer

platform priorities.

The picture on the next chart shows a strong lead of iOS over Android with

49.4% vs 59% of platform developers preferring it as their main platform.

Whereas Android has 4x times more devices shipping and a significant lead

in Mobile Developer Mindshare, it lags behind iOS in terms of Android

developers using it as their lead platform. This has fundamental

implications in the feature, quality and marketing, and revenue

delta that these developers will prioritise on iOS, and the

resulting better experience for iOS users.

The picture of the duopoly becomes rock solid when one looks at lead

platforms share. Within iOS/Android, the lead platform share is an average

of 54%, dropping to down to almost half (27.5%) for the next three

platforms, HTML5 mobile, Windows Phone and BlackBerry 10.

Lead platform share adds a lot of colour behind the dull “total

number of apps” numbers that permeate the blogosphere. Itexplains why Android and mostly iOS app store stickers are the first to




33

appear for new startups advertising their app on a website, a billboard or a

taxi. It explains why feature updates appear first on these platforms, for

most apps. It explains why so many Windows Phone apps lack the design

edge and attention to detail. It explains why most HTML5 apps are an

extension rather than a starting point for a brand’s experience.

Platform vendors should set see lead platform share figures as key

performance indicators and benchmarks of their developer relations teams

- there is no better testament to developer loyalty than to having set a

platform as their lead priority.

Beyond the duopoly, lead platform share drops dramatically. 28% of

BlackBerry users prioritise BlackBerry 10 as their main development

platform vs. 22% for Windows Phone. Looking at developers who use

BlackBerry as a first or second priority, it is evident that BB10 developers

are far more loyal, on average, than Windows Phone developers. For

BlackBerry 10 this is an advantage that can outweigh its Developer

Mindshare deficit vs. Windows Phone since BB10 developers will focus

their attention on the platform, producing higher quality apps there first.




34

CHAPTER SIX

How developers mix and match

mobile platforms

We used to same data from our survey of 6,000+ app developers to see the

multi-platform world from a different angle. We know that 78% of

developers use at least one secondary platform concurrently with their

primary one. We then asked: which platform do iOS, Android, WP, BB10

and HTML5 (mobile) developers use as a second preference? The next chart

shows a very telling picture of how developers mix and match mobile

platforms.

We knew that Android would be the most popular second choice for iOS

developers - which the data confirms as 69% of iOS developers use Android.

The picture is different for Android developers, who use iOS as a second

platform (40%), just ahead of HTML5 mobile (29%).

BlackBerry 10 developers show very low preference for iOS (7%), but much

higher for HTML5 (30%) and Android (23%), which is sensible given that

BB10 supports both HTML5 and Android apps, offering cross-platform

synergies. We also observe a preference for Android developers towards




35

BlackBerry 10 as a secondary platform by developers who mainly use

Android as they can, in many cases, easily port their apps across to

BlackBerry 10.

Windows Phone developers are in their vast majority (58%) using Windows8 as their secondary platform with only Android as a distant second (18%).

As far as HTML5 mobile developers are concerned, they prefer Android

(32%) or iOS (39%) as secondary platforms, since they can develop hybrid

apps and sell them via native app stores, thus leveraging the monetisation

and reach advantage that both these platforms provide against others.

The economics of apps make it extremely difficult for challenger platforms

to compete against the duopoly, which has well established network effects

working in its favour. Asking a developer to switch to a different platform islike asking someone to learn a foreign language - it’s a task that takes

months if not years of disciplined effort to master. And it’s not just

about the language (Objective C, Java, HTML or JavaScript)

itself. It’s the set of APIs, development environment, publishing

process, and the 3rd party tools ecosystem that supports the

platform.

"Learning a language nowadays is not

very hard, they all look the same(literally). Really what you have to learn isthe API."

Jean-Jacques Dubray, Founder, ConvergenceModeling

The earlier chart shows how developers’ preference on mixing and

matching platforms depends highly on the level of synergies that can be

achieved - whether it is easy porting across platforms (e.g. Android to BB10or Windows Phone to Windows 8), or leveraging the same codebase (e.g.

HTML of JavaScript) to both hybrid (e.g. PhoneGap -based) and browser-

based apps. This goes back to our earlier argument about asymmetric

competition: the easiest way to compete with the duopolists is not head-to-

head, but by challenging their control points. Diluting the app creation

control point means exactly that: making it easy for developers to target a

much wider device base with the same development tools and APIs.




36

CHAPTER SEVEN

Developer attention in tablets

catching up with smartphones

Tablets are now everywhere. In living rooms, cars, meeting rooms and

airports. Tablet sales have grown dramatically from just three million units

sold in Q2 2010 with the iPad launch, to over 49 millions tablets sold in Q1

2013, with Android now dominating tablet sales.

Tablets sales are approaching a quarter of smartphone sales in Q1 2013.

Despite the sales gap, developers have embraced tablets almost as equal

citizens to smartphones. Our recent survey of 6,000+ app developers showsthat tablets are now being targeted by 70% of mobile developers,

representing a significant mindshare increase from 61% six months ago.

Tablets closely track smartphones with 93% of mobile developers targeting

smartphones.

Among Android developers, the share of developers that develop for tablets

has risen sharply to 71% from 64% in our January 2013 study, driven by the

proliferation of tablets both from tier-1 and white label manufacturers. The

most impressive rise is observed among developers using HTML5 mobile,

80% of whom now develop for tablets, up from 71% in January 2013.

__________

Comments?




37

Feature phone development remains on the same level (18% of mobile

developers) as that observed in January 2013, with 18% of mobile

developers working on feature phone apps. The huge installed base - over

three billion units - still represents a sizeable addressable market for

developers in emerging markets dominated by low-end handsets. The data

also reveals a fair amount of interest in developer investment into feature

phone apps in order to reach markets where smartphones are slow to

penetrate.

Development for TVs and set top boxes has slightly subsided since our Q1

2013 report from 6% to 4% of mobile developers, as a result of developer

disillusionment from TV apps, an area which has yet to deliver consumer

adoption in large numbers. Interestingly, TV apps remains one of top two

“screens to watch” on the mobile developers’ radar, following tablet apps.




38

CHAPTER EIGHT

Developer revenue models: a box of

chocolates

Not all developers care about making money - some are experimenting,

having fun, learning and others are extending a product’s brand reach. But

those who do care about making money, have a bewildering array of

revenue model choices to choose from.

An app’s revenue model will depend on many developer considerations.

Which is the target market and how much will users spend on the app?

How are other successful apps in the same category making money? ShouldI drop prices to attract traffic and monetise through in-app payments? Will

my app generate enough traffic to justify an ad-based revenue model? Can I

create premium content that I can monetise via subscriptions? Does my

target audience have a credit card on file to pay for app store purchases?

Are Android users less likely to pay for downloading an app than Apple

users?

Our research of 6,000+ mobile developers shows that there is no

single revenue model that is dominant across all platforms. as

the next chart shows. Developers will often use different revenue

models on each platform. For example Angry Birds and WhatsApp

messenger are paid apps in the Apple app store while they are free on

Google Play.

On Windows Phone, developers have a strong preference towards in-app

advertising (43%) and pay-per download (40%) and relatively low usage of

in-app purchases or freemium. BlackBerry 10 developers have a strong

preference towards pay-per download (47%). The picture is much more

balanced on Android, iOS and HTML5, with no revenue model dominating

to the extent observed on Windows Phone or BlackBerry 10.

“In Enterprises, mobility is often implemented bottom-up; budgets are distributed across theorganisation, meaning lots of replication, andmyopic views within individual business unitson what mobile means. There is often nounified mobile strategy.

Vivek Gupta, Director of Product Management, AnyPresence




39

Contract work is more popular among iOS and HTML5 developers (29% of

iOS and HTML5 developers) than on other platforms, reflecting the

popularity of these platforms among clients outsourcing app development.Overall, among developers that develop commissioned apps,

40% use iOS as their primary platform, while 30% use Android

and 20% use HTML5. As the next chart shows, for developers looking for

contract work globally, iOS, Android and HTML are the platforms they

should be focusing on, in that order.




40

At $5,200 per developer per month on average, iOS continues to

be the most revenue-generating platform for developers, and

ahead of Android developer monthly revenues by a margin of

10%. The next chart reveals monthly developer revenue, by primary

platform, including revenues beyond app store revenues such as contractdevelopment, advertising, e-commerce sales and licensing fees. The gap

between iOS and Android, when considering app-store only revenues is

likely to be larger.




41

HTML5 mobile developer revenues are mainly associated with contract-

based development and advertising due to the absence of an established

app-store. At the same time, as we shall see, just over one of four HTML5

mobile developers will package their apps as hybrid apps (based on

PhoneGap / Cordova) which are open to app store revenues. HTML5mobile developers also show a large disparity between have’s and have-

nots. This is because HTML5 as a platform used both by companies

extending a brand onto mobile and by Fortune-500 IT managers, looking to

mobilise existing web assets, on very sizable development budgets.

Finally, BlackBerry 10, being a new platform, is unsurprisingly lagging

behind other platforms in terms of developer revenues, as the platform is

first being picked up by Hobbyists and Explorer developer segments, who

are looking to learn and improve rather than to build a business. For an

analysis of developer motivations and monetisation by segment, see ourDeveloper Segmentation Q3 2013 report.




42

CHAPTER NINE

Developer tools: crossing the

frontier of platform innovation

Today’s app economy has created jobs and hobbies for over 500,000 app

developers globally, using a multitude of platforms. In the early years

(2008-2010) of the app economy, all of the tools needed by developers to

develop and distribute apps were provided by the platforms themselves.

After all, in those early days, all you needed was a development

environment, a set of APIs to code against, a marketplace to distribute your

apps through, and a way for tracking app sales. In recent years however, the

number of apps has multiplied to nearly 1 million apps for each of iOS and Android, and a development environment and app store just won’t cut it.

The bar for app quality has increased, and the app discovery bottleneck has

been continually shrinking.

To support those 500,000+ mobile developers to innovate and

stand out in the market, a new “SDK economy” has emerged. A

storm of over 500 SDK startups and Enterprise IT incumbents, have

emerged, starting in 2009, to help developers in everything from app

prototyping and debugging, to user analytics, planning tools, and customer

support. These days developers can choose from a gazillion tools to scale

their development across multiple platforms, monetize their apps, test,

monitor app performance, manage security, study user behaviour, cross-

promote apps to attract & engage users, and manage API use and simplify

use of cloud services. Our DeveloperEconomics.com website tracks over 20

developer tools categories, and over 500 vendors.

"The productivity gains from usingexternal tools and services far outweigh

the costs, which are negligible comparedto the salary of good developers."

Startup CEO, Sweden

The data from our last two mobile developer surveys consistently

show that developer tools are not just nice-to-have. Tools are in

the must-have app development arsenal of the most

sophisticated developers, and also those making most revenues.

In fact, only 14% of all mobile developers in our recent researchdon’t use any tool.




43

So which are the most popular tools and why? The next chart shows the

breakdown of developer tools popularity, by sector, from our recent survey

of 6,000+ mobile developers.

User analytics tools such as Flurry, Google Analytics and Appsalar, are by

far the most popular among developer tools and services, used by 38% of

developers in our sample. User analytics tools are essential in helping

developers understand how are users behaving within their application, and

using that to improve downloads and revenues through marketing

campaigns.

"The biggest bottleneck in cross-platformtools is performance issues and delay inexposing the latest native APIs. But formost applications this is something youcan live with."

Leo Palacios, Engineering Director, DextraTechnologies

The next most popular tools category is cross-platform tools (CPTs), such as

PhoneGap, Sencha, Xamarin, Appcelerator and RunRev, used by 29% of all




44

mobile developers. CPTs are essential in reducing cost when scaling up

support of multiple platforms, and usually optimised for either enterprise

IT, games or web developers.

It’s interesting to note that the backend-as-a-service tool category isoversupplied by 48 BaaS vendors, but under-demanded, with only 11% of

mobile developers using such a service.

“BaaS is really hard to justify the value of.It has value in terms of efficiency gainsrather than revenue gains. An enterprise would pay 20x to drive revenues but only

2x times to drive cost efficiencies.”

David Reisfeld, CTO, Exceda

At the other end of the popularity spectrum we find cross-promotion

networks (8%) and voice services (6%). Cross-promotion networks like

TapJoy and Chartboost has raised a lot of controversy and has been

targeted by Apple in the past couple of years due to the artificial inflation of

app rankings it may create. Voice services are currently employed by a small

number of developers despite the fact that they can add “edge” to an

application with features like speech recognition, voice search, voice calls

and texting.

Tools, a hygiene factor for mobile platforms

Across the tools spectrum, iOS developers are the most active

and sophisticated users, with 92.5% reporting that they use at

least one tool. With the exception of cross-platform tools and ad

networks, iOS shows the highest usage in each tool category, as shown in

the next graph. Ad networks are the most popular tools/services among Windows Phone developers, in agreement with the popularity of advertising

as a revenue model on this platform.

For newer platforms like BlackBerry 10, the tool usage level drops to 71%,

indicating both the Hobbyist and Explorer early adopter crowd of BB10, but

also the early days in developer tools support for the new platform. At the

same time, BB10 developers show the most appetite for tools, particularly

user analytics and push notifications, which tools vendors should take

notice.




45

"It doesn't make sense for a startup to donative development for multipleplatforms, both in terms of time andmoney."

George Spyrou, Founder, Plusapps LLC

In today’s hyper-competitive app economy, developers can’t

innovate without a supporting 3rd party tool ecosystem. In this

economy, iOS developers have a clear advantage as being most

advanced in tool use, and therefore having the infrastructure to

innovate and differentiate. The better tools at the developer’s disposal,

the more competitive that developer is.

For newer platform vendors like BB10, Firefox OS and Tizen, a

SDK economy around their platform, is not just a competitive

advantage, but a fundamental hygiene factor. SDK vendors are a

necessary component of a successful ecosystem. Lack of critical

SDKs can even become a reason for developers to churn from a platform.

This was the case with PhoneGap, which delayed PayPal API support,

following PayPal API changes, and pushed some developers to abandon

PhoneGap so as to not lose revenues.




46

Tools are for pros, not rookies

The best testament to the importance of the SDK economy,

comes from the fact that the more experienced a developer is, the

more likely they are to use third party tools. One could be excused

for thinking that developer tools are for rookies, since experienceddevelopers prefer to do things “their way”. Our data shows the exact

opposite picture, as shown in the next chart. The more experienced the

developer, the higher the usage of developer tools, and in an almost linear

way. Experienced developers are much more serious about understanding

users, reducing multi-platform costs, monetising from ads and fixing post-

launch crashes. An interesting exception is the consistent decline in the use

of BaaS, crash reporting and push notifications tools among developers

with 10+ years of experience, as these veteran developers often opt for in-

house solutions for integration with legacy databases or internal

infrastructure.




47

The common challenge for developers is the tool discovery bottleneck.

There is far too much noise in the developer tools space. Developers are

often at a loss when required to select a tool for a particular job either

because they don’t know any tools or because they do not know how to go

about selecting a tool, i.e. what are the right questions to ask. Which is why

experienced developers will have a better visibility of the tools market,

knowing which tools are right for the job. Our DeveloperEconomics.com

portal tracks 500+ tool vendors across 20+ categories, and helps developers

exactly in knowing what tools are available for the job.

With over 500 developer tools companies, both incumbents and startups, it

would be natural to think that the developer tools space is congested. Yet,

with developers pushing the boundaries of apps, someone needs to address

developer needs popping across the spectrum. One such need is for tools to

help developers connect with, and support, users during the app usage

phase. As notes George Karavias, Founder of education apps startup Anlock, “Users are not so willing to give feedback nowadays. Even if they




48

want to contribute, they expect to see their suggestion implemented

immediately, which is impossible - so they’re demotivated.” Solving the

customer support bottleneck for app developers is an area where we expect

to see substantial tools innovation.




49

CHAPTER TEN

The kaleidoscope of HTML5 app

development

HTML5 is a technology that stands to rival the duopoly of the app economy.

In terms of Mobile Developer Mindshare, 52% of developers are using

HTML5 in some form, closely behind Android (57%) and iOS (72%)

developers, according to our Q3 study of 6,000+ mobile app developers.

Once we double click on that 52% of HTML5 mobile mindshare, a

kaleidoscope of colour and options appears behind the five short

letters of HTML5. Some developers will build responsive websites thatscale down gracefully when viewed on smartphones and tablets. Others will

develop fully fledged web-apps that work offline and are smart enough to

adapt to the user’s location. Others will combine HTML5 elements with

native APIs within a wrapper such as PhoneGap, or Icenium and which

can then be sold via app stores. Others will leverage native platform support

for JavaScript APIs available through BlackBerry WebWorks, Firefox

OS and Windows 8. And others will use cross platform tools which take

JavaScript and convert it to a native app such as Appcelerator for

enterprise IT use, or Ludei and Ejecta for gaming apps. Last but not least,

we have seen cases of HTML5 being used by app building tools as an

interim language, so that it can be rendered across multiple devices withease.

"We thought of developing our ownHTML5 framework because we didn't want to be limited by the Sencha Touch or jQuery mobile capabilities, for example when they will support new platforms

such as Firefox OS. But we postponed as itrequires a major investment."

Ciprian Borodescu, CEO, Webcrumbz

The next table analyses the many approaches to HTML5 mobile

development, including routes to market and examples of tools used.




50

Approaches to mobile development using HTML5

HTML5 usage Description Distribution Built using (examples)

Mobile websites

Websites that are designed to be

rendered on small screens, incl.responsive websites Web Wordpress

Mobile web apps Websites with offline storage anddeeper browser integration

Web BackBone.js, JQuery Mobile

Hybrid apps (using native wrapper)

HTML code wrapped in a chrome-less browser, within a native shell.

Native app-storePhoneGap, Marmalade,

AppMobi, Icenium,Trigger.io

Apps using native JavaScript API

Platforms exposing software andhardware services through aJavaScript API

Native app-storeBlackBerry Webworks,Firefox OS, Windows 8,Tizen

HTML5/JavaScript appsconverted to native

Tools which take JavaScript andconvert it to a native app

Native app-store Appcelerator (generic).Ludei, Ejecta (gaming)

Amidst this kaleidoscope of approaches to HTML5 mobile development we

asked: which developer tools and approaches are used most often? Based

on our recent survey of 6,000+ mobile app developers, we found

that the largest share (38%) of HTML5 developers develop

mobile websites with another 23% developing mobile apps, i.e.

incorporating offline functionality and deeper browser

integration. Hybrid apps, such as those produced by PhoneGap

account for 27% of HTML5 mobile developers. A minority of 7% of

HTML5 mobile developers use platforms exposing native APIs via

JavaScript, such as Firefox OS and BlackBerry 10. Last but not least, 5% of

HTML5 mobile developers use a Javascript-to-native converter tool like

Appcelerator.




51

In a future Q3 2013 report we ‘ll be looking in detail at the HTML5

approaches to market, and what are the revenues, tools, and challenges for

each.

"We use HTML5 a little but it doesn’t givethe high end graphical experience we want. We use only use HTML5 for apps with low interactivity."

Jeff Bacon, Mobile Director, Fuel Industries




52

CHAPTER ELEVEN

Understanding the complex mosaic

of developer personas

Forward-thinking businesses today realise that developers are their

innovation engine, their most promising affiliates, their evangelists or their

fastest growing resellers. Businesses are discovering that developers are

modern-day channels that help them reach new consumers, discover new

use cases and propel their growth.

The millions of dollars in developer marketing efforts serve one purpose: to

persuade developers to use a specific platform, network, tool or API set. Yet,in 2013, mobile developer attention is becoming extremely scarce, and

dominated by the three leaders of developer marketing: Apple, Google and

Facebook. Competition for developer attention is intensifying month by

month, with players bombarding developers with promotions, organising

developer events and preaching the advantages of their APIs or toolsets.

The scarcity of developer attention has to do not just with skepticism to

marketing. Learning a new platform takes months. Learning a new SDK can

take weeks. Learning a new API can take days. It’s a serious investment of

resources. As a result, developers take the decision to invest in a platform,tool or API seriously.

Most business are resorting to traditional, textbook marketing techniques

to segment developers - by technology (web, Java, Windows, Android,

Apple), job function (coders, designers, architects, team leads, IT managers,

CxOs), by company size, app category (games vs enterprise developers), by

audience (B2C vs B2B) or by demographics (age, income, education or

location).

Yet all these segmentation models are bound to fail, as they

fundamentally neglect to address how developers make

investment decisions in a new platform, API or SDK. In other

words, it’s not age, job function, audience or technology background that

influences how a developer chooses between Apple, Google, Windows

Phone, BlackBerry or Tizen.

To understand the complex mosaic of developer personas we

segment developers in terms of their outcomes, or what

developers are trying to achieve. This is based on the Jobs to Be Done

methodology, popularized by Harvard Professor Clay Christensen and

which constitutes today’s cutting edge in segmentation techniques. We have

backed this model with unprecedented statistical rigor and hard data, fromthe largest-ever mobile developer survey of 6,000+ developers.

__________

More data?




53

Building on our earlier Developer Economics 2012 research work, we

extracted hard data on thousands of developers in terms of their

aspirations, motivations, challenges and plans in app development. We

produced a unique model of eight developer segments - the Hobbyists, the

Explorers, the Hunters, the Guns for Hire, the Product Extenders, the

Digital Content Publishers, the Gold Seekers and the enterprise IT

developers.]

How do these eight segments and three clusters contribute to the app

economy? More importantly, when do these segments interact with

platforms?

We find that Explorers and Hobbyists, those seeking to learn,

have fun and self-improve, make up 33% of the mobile developer

population but only 13% of the app economy revenues. These

segments prefer - more than average - BlackBerry 10, Windows Phone as a

platform, as these are more often associated with experimentation and

learning.

The Hunters and Guns for Hire, those seeking revenues from the app

economy, make up 42% of the developer population and 48% of the app

economy revenues. These segments prefer - more than average - iOS as a




54

platform, due to the consistent revenue-generating opportunities of the

platform.

Product Extenders, Enterprise IT developers, Digital Content Publishers

and Gold Seekers, aiming at extending a business, make up 29% of thedeveloper population, and a whopping 39% of app economy revenues.

These segments prefer - more than average - Android and HTML5 as a

platform - due to the reach that these platforms offer across the entire

smartphone and feature phone installed base.

Our data also shows, that contrary to popular perception, money is not the

only motivator for mobile app developers - in fact, far from it. Revenues -

in some form or other - are the goal for only 50% of mobile

developers, which challenges the assumptions of developer

marketing programs that use money as the main developerincentive.

The hierarchy of developer motivations on the next chart shows some

surprising findings. At the base of the pyramid, the majority (53%)

of mobile developers are motivated by creativity or the sense of

achievement, making this the most popular among motivators.

The fun of making an app, is a motivator for 40% of mobile developers -

which is important to many more developer segments than just Hobbyists

and Explorers.




55

Our Developer Segmentation Q3 2013 report drills deep into each of these

developer segments. We map developers in terms of their goals (“what”

they are trying to achieve), their success metrics (“how” they are trying to

achieve it) and more importantly the personal motivations behind their

choices (the “why”).

We further profile each segment across 5 dimensions: who and where they

are, which markets they target, what choices they make, how they make

money, what platforms they select and what challenges they face. These

unique insights into developer segments can provide a strong competitiveadvantage for organisations for which developer outreach is a key element

of their strategy.

The Developer Segmentation report is available on our website:

www.developereconomics.com/Seg13




56

CHAPTER TWELVE

Sizing the app economy

In the past few years the mobile industry has experienced a powerful

upheaval sparked by the launch of the first iPhone and the creation of the

first, true app ecosystem. This event brought about a gradual restructuring

of the mobile value chain and a steady shift in value from the traditional

pillars of the mobile economy, telco services and mobile handsets into app

ecosystems. This emerging component of the value chain is what we call the

“mobile app economy” and it represents the fastest growing area in the

mobile value chain today and will continue to do so in the foreseeable

future.

The value migration is profound as can be seen in the following graph. In

2012, the global app economy accounted for 18% of the combined

app services & handset market. We estimate that by 2016 the

contribution of the app economy will rise to 33% of the combined market,

equivalent to half of the handset market.

While several sources have estimated revenues generated via app-stores

and advertising, these estimates are missing the largest part of the appeconomy. The contribution of app store sales to the total size of the app

__________

More data?




57

economy is less than 20%, while the combined app store sales and

advertising market accounts for just over a quarter of revenues generated

via apps.

VisionMobile has developed a model for sizing the direct app economy, thatuses the large-scale, fine-grained dataset obtained via Developer Economics

surveys. This model incorporates not just revenues generated directly

through apps but economic activity generated via commissioned app

development, mobile app e-commerce as an app monetisation model (i.e.

not including e-commerce as core business), VC funding, services for app

developers and several other income sources directly related to mobile

apps.

The global app economy was worth $ 53Bn in 2012, and expected

to rise to $ 68Bn in 2013. It is growing at a 28% CAGR between2012 and 2016, reaching $143 Bn in 2016. The bulk of this growth will

come from APAC and LatAm, the fastest growing markets in terms of

smartphone penetration.

We estimate the global mobile developer population in 2013 will reach

2.3M individuals with each organisation that is directly involved in the app

economy employing 4.5 developers on average, although this figure varies

significantly by region. The mobile segment corresponds to 12.6% of the

global developer population. In other words, 1 in 8 software developers isinvolved in mobile development in 2013.




58

VisionMobile’s App Economy Forecast 2013 - 2016 model combines results

from our Q3 2013 Developer Economics survey and a large set of industry

figures and indicators to deliver both bottom-up and top-down approaches

in sizing the app economy. The VisionMobile App Economy Forecast 2013 -

2016 report provides a unique set of data points on the current state and

growth of the app economy including:

• Forecasts (2013 - 2016) for revenues across regions (North America,

Europe, Asia-Pacific, Latin America, Middle East & Africa)

• Forecasts (2013 - 2016) for revenues across platforms (Android,

iOS, HTML5, Windows Phone)

• Forecasts (2013 - 2016) for revenues across revenue sources (App

stores, In-app advertising, mobile e-Commerce, outsourced

development, other)

•

Forecasts (2013 - 2016) for the Mobile Developer population

globally

•

Mobile developer population by region, platform and revenue

source for 2013

The report is available on our website:

www.developereconomics.com/Forecasts



distilling market noise into market sense

VisionMobile-Developer Economics Q32013

Documents

Transcript of VisionMobile-Developer Economics Q32013