App Ecosystem Opportunities

App Ecosystem Opportunities is the leading source of research and analysis on mobile application trends, developer attitude, and consumer usage. The service provides in-depth analysis on platform performance, content owner strategies, and operators attempts to thrive in the app economy.

May 14, 2014 13:39 AThorwart

India has been a hotbed of mobile app news lately, especially from Social networking and mobile messaging apps like Facebook (100 million users in India; 84% access via a mobile device) and WhatsApp (48 million mobile users). However, mobile commerce apps are also showing signs of growth. SnapDeal and Paytm are prime example of the growing attraction of mobile commerce apps in India.

SnapDeal, which launched in February 2010, first came along as an e-commerce site. However, its mobile platform has gained a lot of ground in the final months of 2013 through to the first half of 2014. In October, mobile orders accounted for 30% of sales and now it has surpassed 45% from the native application; an additional 5% comes from the mobile browser. There is an 80/20 split among Android and iOS users, in favor of Android.

SnapDeal is one India’s most popular iPhone apps, according to AppTRAX – Strategy Analytics’ own proprietary research technique. SnapDeal has been consistently ranked higher than 100 in each week of 2014 (through 5/9/14). The only exceptions were weeks 4, 10, and 11 when the app rank was 100, 127, and 104, respectively. Its highest ranking was during the week of May 9th 2014 when it ranked 33rd among free apps. Overall its average 2014 iPhone ranking in India is 74.6.

SnapDeal is available to iOS, Android, and Windows users.

Paytm launched its new service in February of 2014 with a little twist on mobile commerce. Paytm’s approach included a text style format that allows users to negotiate prices with merchants before purchasing. The mobile platform started with 250 merchants and has now grown to over 500 merchants. The mobile app itself has grown significantly since launch as it surpassed 1 million extra users on top of the 6 million it started with. The firm is targeting a year-end app user base of 15 million and merchant base of 5,000.

Paytm has also made several appearances on the iPhone top 300 AppTRAX ranking list in India during 2014. The new service was announced on February 6th and starting the week after, it first appeared on the ranking list at number 78. Following its first appearance in week 7, it ranked 136,116, 123, and 101 in consecutive weeks until it dropped out of the rankings in week 12.

 

Paytm is available to iOS and Android users - soon to be Windows in June.

 


May 12, 2014 12:56 AThorwart

“If it ain’t broke, don’t fix it” is an age-old adage, but the taxi industry’s adage went a little more like: “the world knows our system is broke and there isn’t anything a consumer can do about it, so we’re not changing.” That adage rang true for a long time until services like Uber and Lyft revolutionized a basic service feature: availability. I have heard a lot of different arguments against Uber and Lyft and it basically boils down to price and efficiency.

The argument against the price is legit because taxi companies pay (by all accounts) major regulator fees/taxes causing fare prices to increase. However, price level seems less important to a user since getting from point A to B trumps price. So the question becomes why are the taxi companies losing consumers? The answer is efficiency/ease of use. Rather than trying to get a cab on the street (especially in inclement weather), Uber users can simply send for a ride and can even pay with a PayPal account. Hailo is another service like Uber, but the main difference is that Hailo works with black cabs in London.

How popular is the Uber, Lyft, and Hailo apps? According to AppTRAX - Strategy Analytics’ proprietary research – Uber in the UK has an average iPhone ranking just outside of the top 200 for 2014; last week it ranked 183. Uber is much more popular in the US with an average iPhone 2014 ranking right around 100. Hailo and Lyft are not ranked in the top 300 UK iPhone rankings during any week of 2014.

Based on the popularity rise of the aforementioned Uber and Lyft, there have been several responses by the taxi industry across the globe challenging the fairness of such services. Below are a few of the recent responses by the taxi industry (other responses were found in Berlin, Brussels, and Paris).

First response: London’s 10,000-car protest.

It’s being reported, by Bloomberg, that London taxi drivers are planning to stage a 10,000 car demonstration near a historic landmark in London, the exact location is not yet known (and probably for good reason).

Take a step back and look at the first response on face value. The taxi industry “aka big brother” is angry that services like Uber and Lyft “aka little brother” are taking profits from them. However, instead of fixing its problem and becoming more efficient (by developing similar apps), the UK’s Licensed Taxi Driver Association responds by not only becoming less efficient during the protest, but also making businesses in the “protest zone” less efficient for as long as the protest continues. Lost in the protest is the irony - if no taxis are to be found then non-Uber users may opt to use the service during the protest thus driving up Uber and Lyft usage.

Second response: a Fujitsu and MIT study, leads to utilization of Uber-like app technology for cab hailing.

Engadget reported late last week that MIT and Fujitsu ran a study on how taxis are underutilized, yet are never there when needed. As a result of the study, on-demand technology was provided to cabs and users could pick from 3 modes: taxi, ride-sharing, and fixed route modes. Each of which can be “ordered” by the user who then receives boarding times and fare prices. A test run in Tokyo yielded in 80% more profits.

Unfortunately, Fujitsu’s goal for full operation is 2016 which seems too far off and by then traditional taxi companies might already become more of a (if not completely) forgotten commodity than it already is. The Licensed Taxi Driver Association in London should spend more energy following Fujitsu’s model and begin establishing a developing body to help taxi companies become more efficient.

The taxi industry isn’t the first industry disrupted by smartphone apps. Banking and operator messaging (among other) industries were also affected by the functionality of mobile apps. As mobile banking became more popular, developers began making the app features (mobile check deposit, ability to pay bills, etc.) so functional that the need to visit a branch on a routine errand is almost non-existent. Mobile banking app users can simply take a picture of and deposit a check on the spot. Operator messaging services were severely hurt by the development and popularity rise of mobile messaging apps, as detailed in the Operator Messaging to Decline 20% by 2017 report by Strategy Analytics’ Director of Wireless Media Strategies service Nitesh Patel.

Taxi services may be the first automotive industry to be affected by smartphones and app, but it certainly won’t be the last. It is only a matter of time before the phone and car become one and the user can simply check on a smartphone what needs replaced (tires, battery, brakes, etc.) and can search local auto body shops for the best prices. That type of technology will actually hurt large brands more than help because if a mechanic at a local mom and pop run business can do the work cheaper than places like Ford and GMC might lose those consumers. 


March 11, 2014 09:37 AThorwart

The partnership with Idea Cellular will grant over 130 million users access to Gameloft’s game portfolio.

Gameloft is coming off a full year in which it increased mobile gaming revenue each quarter – one of two companies highlighted by Strategy Analytics’ Mobile Gaming Index to accomplish this feat. However, the 2013 “storyline of the year” in mobile gaming was stolen by the incredible resurgence of Glu who credited its revenue boom to the entry into the APAC region including an announcement in Q4 that it will cross-publish titles in 2014 with COLOPL – a Japanese mobile gaming studio.

Which begs the question is the Gameloft+Idea Cellular partnership just simply a user grab or is India being targeted specifically?

The answer is yes on both accounts. First, an increase in user numbers is always desirable. Secondly, in order to continue success Gameloft will need to reinforce its position among established markets as well as enter new market. Although India’s population doesn’t possess the same “gaming motivated” reputation that other APAC markets (i.e. Korea and Japan) do, it does have a prior connection to Gameloft. India was first a focus for Gameloft in late 2009 when the mobile gaming giant targeted SE Asia and the regions, then, 898 million mobile phone users. In fact, in November of 2009 these two companies (Gameloft and Idea) entered an agreement that provided the gateway for Gameloft to showcase its gaming portfolio in India.

Fast forwarding to 1H 2013, Gameloft began re-establishing its dominance in India as it dedicated approximately $1.5 million “to the restructuring of Gameloft’s development studios in India and the Philippines.” Clearly the renewed partnership with Idea is the second step for Gameloft. Per this partnership, Idea becomes the first Indian telecom to provide users access to the Gameloft Game Store including access to new content made available via a Gameloft Club subscription. The Gameloft Club is an important feature in areas with low credit card usage/penetration because the $6.99/month subscription fee is applied to a user’s phone bill. As a part of the subscription, users are given 2 credits a month to download any paid game (each game download = 1 credit). Considering most (if not all) Gameloft paid games are listed at $5.99, The Gameloft Club subscription model makes sense as long as users continues to want paid games which is becoming less and less likely – in 2013 paid games only accounted for 20% of revenue for Gameloft.

Despite the fact that the Gameloft+Idea and Glu+COLOPL are different partnerships in structure, it is very evident that both Gameloft and Glu are using the correct approach to the market. Simply entering the competitive APAC market on their own accord would likely prove to be a fruitless activity. Even with assistance from local players it will be tough to grab any real share from local favorites like Gamevil.


February 27, 2014 14:26 AThorwart

The EA founder secured $6.5 million in funds for If You Can

The educational app company If You Can recently launched its free educational app. According to CNNMoney (visit this link for more game details) Hawkins was able to raise $3 million as an initial investment from various seed and angel investors. Fast forward to today and the If You Can Company landed an additional $6.5 million to bring the total investment to just under $10 million. This round of investments was led by Greylock partners. This is Greylock’s foray into tablet gaming, it previously back web gaming companies Kongregate, Social Games Network, and WildTangent.

IF … is designed specifically to guide kids in developing SEL – social and emotional learning – skills. The developers utilized the RPG genre to put users in situations that help prepare them to make real-life relevant decisions. Ultimately the game strides toward teaching the users self-awareness, self- management, social awareness, relationship skills, and decision making.

Education apps have potential to be big money makers in 2014, but they have to be able to generate revenue and there is a fine line when it comes to making money from kids.

If IF … is going to be a revenue generating vehicle it needs to include in-app purchases otherwise the free model is not a lucrative route as it hinges on money via advertisers. Currently there are only 3 education apps on the top 200 grossing list for iPad only one is a paid app with no IAPs. Proloquo2Go has a listed price of $219.99 while Reading Rainbow and Fit Brains Trainer are both freemium. Freemium titles are free to play, but charge for IAPs (i.e. stickers, emojis, subsciptions) and have recently come under some scrutiny - Apple paying back $32.5 million.

IF … is currently only available for iPad users.


November 18, 2013 07:34 AThorwart

Zepp’s 3D motion sensor wants to capture your data and help you train

Health & fitness and sports go hand in hand with each other. They are also linked together in the wearable device ecosystem with the newest devices, only this instance the device attaches to sporting equipment and not the user.

Vendors such as Zepp and SensoGlove are putting sports analysis technology into the hands of the consumer or amateur sportsperson, with the ultimate aim of improving the ability of the consumer at their chosen sport.

Zepp has designed a 1”, virtually weightless, wearable device that attaches to the end of a bat (or club or tennis racket). Zepp Sport’s Platform is home to the three mobile apps that go with each sport – Zepp Baseball, Zepp Tennis, and Zepp Golf. (Zepp also offers the Golf Sense app which is similar to the Zepp Golf app) These apps capture and analyze the swing while the consumer plays the sport and transmits the data via Bluetooth connectivity to an iOS or Android device. The apps capture a number of metrics including bat speed, swing plane, hitting zone, and impact angle.

The SensoGlove is a glove worn by the golfer that measures grip pressure, with the results being displayed on an LCD attached to the glove. The measurements allow the golfer to see their grip pressure at different parts of the swing, and strive for more even pressure and therefore more consistent swing.

Such analysis tools were once the domain of professional sports and sports science. However they represent a new dimension to wearable devices, which have for some time been a happy home for fitness tracking and monitoring devices such as Nike’s FuelBand and Fuelband SE

Strategy Analytics believes this is a new string to the bow of wearable devices in that they are not just recording and monitoring, or alerting the user to specific events on the companion smartphone; they are helping the user to improve at a given discipline.

Zepp’s baseball, golf, and tennis devices are each priced at $149, and the SensoGlove starts at $89. However with golf clubs easily reaching into the $ thousands, and hundreds of hours devoted to sports, that surely is a price many would happily pay.

Such devices are part of the Fitness Monitoring and Tracking category, which is one of four key categories making up the Wearable Devices market, as tracked by Strategy Analytics Wearable Device Ecosystems service and the apps are being tracked by AEO – Application Ecosystem Opportunities.

The wearable device market is still in the early stages and as the market begins to mature it is inevitable that more and more twists on fitness and sports devices are going begin to crop up. Perhaps the next stage in monitoring progress will be device inside a ball, like a football to measure spin rotation after a throw or a soccer ball that measures curve and power of a shot.


November 1, 2013 13:12 AThorwart
After the latest product release maybe it stands for All Day I Dream About a Smart Run.
 
 

Adidas just made available its latest Health & Fitness product from the miCoach line – miCoach Smart Run Watch. This is Adidas’ first wearable watch, but it is not the first wearable health & Fitness product. Previous products include the X_Cell (clipped to a waist or chest), Speed_Cell (shoe insert), and the Heart Rate Monitor (strapped to the chest). All three products sync seamlessly with a mobile phone via the Adidas MiCoach Multi-Sport App or the miCoach Mobile App.

Both of the apps are valuable tools for capturing the user’s personal performances while working out or participating in a sporting event. The miCoach Multi-Sport App is designed to help users capture physical abilities based on what sport the user is participating in including vertical leaps, quickness, running speed, etc. The app requires a connection with the X_Cell or Speed_Cell and is only available to Apple users. The miCoach Mobile app is similar in functionality to the Multi-Sport app, but the major difference is the apps availability (available for iOS, Android, Blackberry, and Windows users) and it connects with the Speed_Cell and the Heart Rate Monitor.

The miCoach Smart Run is a complete all-in-one health & fitness tool – training guides, performance tracker, music player, etc. Unlike Adidas’ top competitor’s, Nike, product the Smart Run sports a colored touch screen for easy viewing pleasure and an intuitive swipe capability that allows users to quickly change displays or drag and drop song selections. Smart Run syncs via Bluetooth 4.0 connectivity headset for listening pleasures and operates on the Android Jelly Bean 4.1.1.

The device has a few set-backs and perhaps the most important is the need to be connected to a WLAN signal for setup and data transfer. Adidas’ price point for the Smart Run is the other – it is set at $400. Compared to alternative products like the new Nike+ FuelBand SE ($149) and FitBit’s Force ($130) the Adidas product is pricey to say the least, but the other products do not offer similar features to the Smart Run, especially the color touch screen.

It is unclear if Adidas will follow Nike’s lead and allow third party developers to utilize API’s like Nike is doing with Nike+ Fuel Lab and the Nike+ Accelerator Program. Opening up to outside developers would help promote the device and with such a high price point it would make sense to open the doors otherwise Adidas risks staying niche.

I am beginning to wonder - How many industries can be crossed with one product? Since wearable devices have become popular it seems like one product covers a large number of industries and it is increasing. Adidas is a great example of the aforementioned question. The X_Cell goes from being a product that can be clipped to a waist band and then it transforms into the Speed_Cell shoe insert.  If user demands are for a fully functional device that works all the time than it isn’t exactly fashionable for users to wear specifically designed sports equipment on the hip or in special shoes. Logically watches make sense, so now it impacts the fashion industry in addition to the smartphone industry, and the health & fitness industry.  All Adidas needs to do now is start its own music service, or partner with one, so it can directly impact the music industry. That might not be as crazy as it sounds – in the report A Vertical View of Health & Fitness Apps we found that most of the apps integrate with music, and having music integrated into a wearable device means the user doesn’t have to take a bulky smartphone with them on a run just to hear some motivating tunes. Don’t rule a move like this out!

 

October 10, 2013 13:58 AThorwart

Madden CoachGlass is a second screen solution for hardcore gamers.

Second screen applications were first becoming relevant as a way for television shows/networks to capture consumer excitement away from the TV by providing bonus materials (cast bios, interviews, etc.) available on tablets and mobile phones. These apps were developed to continue engagement and to cultivate excitement while a show may be on commercial or even when shows were out of season. The gaming industry did not want to be left behind and some of the classic console developers were also working on second screen applications.

EA, one of the classic console developers, was able to recognize the capabilities second screen apps can provide and the company has previously entered into the market, but it is now expanding it to the next generation of consoles. The Redwood City, California based company is now getting set to launch Madden CoachGlass – the exclusive second screen app for Madden on XBOX One.

The sole function of CoachGlass is as simple as a play calling tool that would help users call a defense. However, it is actually so much more than that and it shouldn’t be overshadowed. EA is collecting data from thousands of online games and each of the plays provided by the app are actually designed for a specific situation during the game based on the formation and tendencies of the opponent.

This isn’t the first time Madden has gone beyond the television. Over a decade ago they added in a feature where users could connect a Gameboy Advance with a Gamecube that allowed the Advance to become a virtual scoreboard. 

EA is clearly embracing the second screen opportunities and it begs to question what is the next game the company develops will have this capability?

Battlefield 4 is already in beta testing and according to blog from Battlefield “With the Battlelog app (and on web as well), you can do a lot of things away from the game. You can view your stats, customize your Loadout, write in the forums, read the latest news, connect with friends, and more.” Battlelog appears to have been introduced in Battlefield 3, but the functionality was limited.


August 30, 2013 14:19 AThorwart

Xiaomi and Nokia hit app store download milestones.

Apple’s 50 billionth app download milestone was announced in May 2013, which was a few months before Google Play announced its 50 billionth in July during the Q2 2013 earnings conference call. Fast forwarding to August, Xiaomi’s MIUI app store and Nokia’s Ovi app store each announced its own app download milestones – 1 billion (globally) and 2 billion (in India), respectively.

Xiaomi is an OEM making noise in the Chinese market and have garnered press coverage in the last few weeks. The recent addition of Hugo Bara, a former Google VP, has been the biggest piece of news drawing attention to the company. However, the recent billion download milestone is quite impressive, especially considering the Android app store has only been operational for less than 400 day. Overall the company is still in the infancy stage as a player and needs to build upon its recent success if it wants to become a major player.

Nokia, on the other hand, knows a little bit more about the spotlight. Recently the Finnish based company has been in the news with the launch of its 41 megapixel Lumia 1020. The Ovi store has been around longer than the MIUI store and has over 10 billion apps downloaded.The Indian branch of the Ovi store contributed to 20% of the milestone – 2 billion app downloads. Nokia’s Ovi store is available in over 200 countries with over 170,000 available apps.

It is a bit refreshing to see other App stores begining to create buzz and become players in the space, even if they are nothing more than fringe players at best.


July 22, 2013 06:44 AThorwart

Gifts away paid apps to users

Apple who is notorious for paying out the most money to developers was once again in the giving mood, only this time iOS users were the beneficiaries. Upon turning 5, which feels 20 with the way trends change in the industry, Apple has selected 5 games – Infinity Blade II, Where’s My Water?, Superbrothers: Sword and Sworcery EP, BADLAND, and Tiny Wings – as well as some other apps – Barefoot World Atlas, Day One, Over, and Traktor DJ.

With so many games available for free these days does a promotion like this even matter? The honest answer is, it depends. At the very least apps taking part in promos will see download numbers rise because it is app user’s nature to download free apps especially if it normally costs money.  However free/reduced price promos can also prove to be quite beneficial particularly for developers offering In-app Purchasing (IAP), which is the case for Disney’s Where’s My Water and Infinity Blade II.

Eric Johnson from AllthingsD reported that Infinity Blade II was a major beneficiary of Apple's promo receiving 1.7 million downloads alone last Monday. The boost in users to an app like Infinity Blade II has the potential to be very fruitful in terms of revenue because they offer In-App Purchases (IAP). For the last few years there has been a systematic shift towards freemium games where the game is offered as a free download and the developers capitalize on the users once they are in the game through the IAPs – in game currency, new levels, new gadgets, etc. IAPs are revenue generating machines


July 11, 2013 07:18 AThorwart

“Old guard” mobile games developers regain market share by embracing free to play

Since 2006, total consumer spend on mobile games has skyrocketed due in large part to the formation of App Stores (iTunes, GooglePlay, etc.) and more smartphones entering consumer’s pockets. However during that same time period, the more established mobile game developers (EA, Gameloft and others) which largely relied on carriers for distribution, lost the stranglehold on mobile gaming as the market opened up to many new companies. The big winners recently have been the new entrants like Rovio with its Angry Birds games.

Over the last year Capcom was the top performer in terms of growth in Strategy Analytics’ mobile gaming index. The latest installment - 2013 Q1 Mobile Gaming Index – shows that for the first time since the launch of Apple's App Store in 2007, the total market share of the mobile games publishers we track (EA, Capcom, Com2Us, G5, Gamevil, Gameloft and Glu) showed an annual increase from 16.7% in 2012 to 18.4% in 2013.

How have they reversed the downward trend? Certainly it took a while for those companies to transition from carrier distribution to embrace app stores fully, but the best performers are re-establishing dominance by giving away games for free. The basic principle is attract users with a free game and monetize that game later with in-app purchasing, and that seems to resonate with consumers.