Mobile apps – high potential and low entry barrier

The following article is the secondary research of various articles on the web regarding the mobile app business and development. So, it may contain some snippets of various articles. Thank you and enjoy the article.

App-making is an idea-intensive and not a capital-intensive business, small outfits can make it big – a perfect fit for creative, tech-savvy but resource constrained Indians. The trade-off has never been so one-sided in favour of entrepreneurs. Start with a minimal investment and access a market with no physical boundaries.

The opportunity is huge in both volumes and value. A 2011 report by Gartner predicts annual worldwide mobile app downloads will reach 185 billion downloads by 2014. Juniper Research says that these clicks are likely to add up to over $25 billion in revenue. The potential has never been higher and the entry barriers have been lower.

“When the first iPhone was launched, it didn’t have zoom facility for its camera. So, we thought why not create a digital zoom function for the camera” says Rohith Bhat. The app is one of the biggest hits of his company, Robosoft, recorded over 15 million downloads.

An idea is a cheap entry ticket, but already there are over 3 lakh mobile apps floating on various platforms. Not all of them are downloaded a million times. There are many apps that don’t make any money. The idea must be a hit, and reach the magic number within one week to a month. An app’s life is one day. The downloads must start within hours of publishing it. A hit app very much peaks in a month’s time. So, it is pretty much similar to making a movie. If one app is a run-away success, 99 other apps fail in the market.

The biggest hit apps either entertain or give information in minutes. You need to be original and most developers agree that it is much easier to make utility based apps than to make games or entertainment based apps. Games are considered to be most creatively challenging. However, it is this segment which is the most popular among users.

What is a great app?

No one can say. It can emerge from a need or it can evolve from existing craze or on top of existing apps. Another app-preneur who has hit it big is Rohit Singal, whose app Nightstand converts the smart phone into a bed-side clock with a glowing dial.

Though indispensible, a good idea is not enough. A compelling design is equally critical. Apps which are easy to use and beautiful to look are killers. This is where the Indian developers lack, as the app requires world-class presentation along with rich features. The Americans build user-friendly interfaces, the French make beautiful apps. If Indian developers can also learn the art, more global hits will come from here. The most frequent functions must be easy to operate with one hand. It is all about user-friendly engineering!

How will I get paid?

Earlier to put an app in the phone, the only way to do is to talk to the handset provider or the sim-card provider. As these operators used to ask for 80% of the profits, it used to create problems in pricing the app competitively in the market. But developers of Ovi, Android, iOS have no such problems. All major platforms Google’s Android, Apple’s iOS, and Nokia’s Ovi offer SDKs online. They develop the apps using the SDK and upload the app in the respective websites. The money comes in every month as Apple and Google share 70% of the revenues with the developers.

Ad revenues vs. Paid subscriptions

According to one major Indian app-preneur, on average it takes one crore (10 million) hits for the app to generate 10,000 rupees of ad revenue. Even Robosoft and Sourcebits, companies with first mover advantage don’t rely much on ads for revenue. Paid subscriptions remain the bread and butter with price per download ranging from 50 to 500 rupees. At this rate, it takes around 30,000 downloads to recover the cost of an app built over 9-10 months. In February, Apple announced a new revenue stream for apps: monthly subscriptions. This is applicable only to newspaper apps, magazine apps, etc.

As big money chases these byte sized programs, the app business is getting complicated. Earlier, word of mouth was enough to push the app. Today entrepreneurs and companies have marketing budgets for their latest creations. Mostly they target the app reviewing sites, if they rate you well and if the app cracks the top 100 list, you make money.

You need an appetite for rapid innovation, fast delivery capability, ability to sell in a fragmented marketplace, and infinite patience.