Putting a Spotlight on the App Economy

At Smarter Apps, we have developed a reputation as elite iOS and Android app builders. We have helped many app developers become successful in the marketplace. Sometimes we forget that until July of 2008, there was no central store for Apple apps and that the first Android phone and its companion Android Market for apps was three months away.

While it can be argued that either company is more popular than the other, the fact remains that it was Apple who started the most important shift in the mobile device industry—from hardware-driven to software-driven. In other words, it is safe to say that Apple created the App Economy and they have 50 billion app downloads to prove it.

Let’s take a look at where both companies stand now and make a few projections for the future.

The Current State of the App Economy

The app economy has had one huge beneficial effect for developers—it allows them to compete with the “big boys” and bring products to a multi-billion dollar market for much less money than ever before. In other words, you can take your product directly to the consumer and cut out a plethora of “middlemen.”

Think of how much it would cost to develop, manufacture, promote and sell a physical gaming product. The costs would be prohibitive for most people. There are materials, labour, assembly, manufacturing costs and promotional costs, but none of these guarantee that any retail outlets will carry your product.

Contrast this to creating a game app. You come up with the idea and call someone like Smarter Apps. After we determine that you have something marketable, we handle the code and build your app. Then, after Android and/or iOS deem your app to pass their requirements, the app becomes available in their store and you promote it.

There is no cost for storage, materials or labour after the app is created. This provides you with a much higher profit margin. And if your app goes viral, it is almost 100% profit because you barely have to even promote it anymore.

Can Monetisation be Better?

The answer here is a resounding “yes.” While Apple has paid out over $10 billion to iOS app developers as of 2008, there is room for a lot more monetisation. In the first quarter of 2013, for example, Apple app developers are estimated to have made 2.6 times as much money as Android app developers. This is partially because Apple promotes to the higher end of the market and Android markets to the lower end, but also because iPhone users tend to be more tech-savvy than their Android counterparts.

According to statistics released in June 2013 by Distimo App Analytics, games are the most downloaded apps, followed by messaging apps. However, the profit numbers are a bit top-heavy, as many app developers tend to be either very profitable or unprofitable. There is hope for middle ground, though, with many smaller apps showing tidy profits for their creators.

The Future of Apps

Currently, both Apple and Android are over the 50 billion download threshold. Google Play is catching up to the App Store and the Amazon AppStore is beginning to make some noise in the apps industry.

There is a lot written about the pros and cons of Apple and Android, but the fact is that both have very solid markets and both are continuing to evolve their hardware while providing marketing platforms for anyone who can provide a worthy app. Two positives that app developers can always count on are constant evolution of hardware and OS updates from both companies on a yearly basis.

This will continue to create opportunity for those who can create an app or game that connects with the public.

The Formula for Success

Success in the apps world is always based on finding something the public wants and supplying it to them. Game apps are a bit of a gamble, but product creation 101 still applies—find a niche and see if you can create a game that will add to that niche. It doesn’t have to be “Angry Birds” to make a profit.

Practical, functional apps are a lot easier for many to create and they are less of a gamble. You just drill into a niche and figure out something that people need but nobody is doing. One can also look at current apps and make ones that improve upon them or complement them.

If you have an idea for an app, call 1300 650 253 and we can run it for you. You’ll never know until you try.

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