Mumbai/Bangalore: Apps may be the lifeblood of smartphones in today’s world. Yet, app downloads in India are estimated to account for less than 5% of global app downloads despite the country being the world’s second largest mobile user market after China.
Besides, the top 10-15 apps comprise 80% those downloaded globally, posing a challenge for developers to make money through app development.
Global app downloads, according to industry estimates, are forecast to more than triple to 109 billion by 2015 from around 31 billion currently while app downloads in India are expected to grow at a compounded annual growth rate of 75-80% till 2015 to about 9 billion from around 1.56 billion currently.
Almost 16% of smartphone owners have never downloaded a single app, according to a February report, Technology, Media and Telecommunications India Predictions 2013, by Deloitte Touche Tohmatsu India Pvt. Ltd. The report attributed the dismal trend to a lack of understanding of smartphone capabilities, affordability and required data infrastructure.
Only 15% of mobile phone users in India download apps, with 90% of them preferring free ones, said Neha Gupta, senior research analyst at Gartner Inc.
App development is not financially rewarding for most developers, said a January report, Developer Economics 2013, by UK-based market analysis firm VisionMobile Ltd.
“Nevertheless, out of the vast majority of developers that are in it for the money, 67% are not making enough to sustain them or their business, i.e. they are below the ‘app poverty line’ of $500 per app per month,” the report added.
Only two-three of all apps eventually end up making it big, according to Beerajah Sswain, developer of the social TV app Floats.
The top paid apps in India relate to gaming, utilities, music and video apps. The free ones are social, games, photo and video apps. Lifestyle applications that help people find restaurants, book movie or show tickets or find friends are also growing, according to industry experts.
Sswain likened Indian app users to “kids in a candy store... They have so many options and want to try all of them, whereas in the US, far fewer apps are downloaded on average. They (US users) download only when they need a certain app for a certain function”.
It’s also difficult to predict what could prove popular.
“I noticed my daughter using an app with a pink pig flying across the screen squealing loudly. It is the most downloaded app in her school among 10 to 12 year old kids. So, it’s difficult to figure out what is that single biggest compelling reason which will drive downloads,” said Pratima Amonkar, director strategic audience marketing, Microsoft Corp. India (Pvt.) Ltd.
Success depends on the quality and whether the user feels it adds value on a day-to-day basis.
Experts tracking the market say that Indian app developers often lack a proper strategy to develop and market apps, preventing them from reaching the desired scale of popularity.
“In India, the motivation for us, app developers, isn’t really there, something I faced because I couldn’t sell my app,” said Soham Mondal, founder of Triveous Technologies Pvt. Ltd, an app developer. “Till October, I was just monetizing the application through advertisements, it was just a half-hearted effort. Apart from that, a lack of talent, a lack of best practices—all these are challenges in the Indian app ecosystem.”
This is in contrast with the US and Europe, where mentors and support groups offer their suggestions and encourage more innovation.
His company developed a cloud-based audio recorder app for Google Inc.’s Android mobile operating system called Sky Recorder, which was launched last June and has got 4,200 downloads so far.
Advertising does help in promoting apps, and is now the most popular revenue model for apps. It’s used by 38% of app developers, according to the above cited Vision Mobile survey.
In India, some developers try to make money by creating a paid application. Others attempt to first get the reach, following which it becomes a positive advertising revenue opportunity, according to Annie Mathew, head of alliances, India, Research in Motion India Pvt. Ltd (in the process of being renamed BlackBerry).
App makers that have successfully followed the advertising model include Spice Labs Pvt. Ltd and Twist Mobile India Pvt. Ltd.
Spice Labs gets 95% of its revenue through advertising. “Advertising in general is not an easy model to follow because you need high usage and have to ensure that people keep returning to the app. You have to work with a lot of partners to get maximum value,” said Siddhartha Jain, CEO, Spice Labs. “We are using Vserv Ad Wrapper technology for revenue generation through ads,” said Virat Khutal, founder, Twist Mobile. Its apps, such as the game Zulux, have been downloaded 118.85 million times in emerging markets.
To remain successful, the app needs to be continually upgraded, developers pointed out.
Spice Labs’ Hangman app has crossed 20 million downloads since its launch two-and-a-half years ago and the company; it’s revised once almost every month.
Many app developers don’t realize the importance of doing this regularly, said Katyayan Gupta, analyst, Forrester Research Inc. “Second, they do not have the funds to keep on developing apps for a longer period of time if they do not see an ROI (return on investment). And that’s a problem, given that India is a free-app-oriented economy,” he added.
Apps need to continually upgraded so that users don’t drop them because they remain unchanged.
“You need to continuously keep adding stuff to it. We have talent on the development side of things, but we don’t mix it well when it comes to the designing aspect,” said Amrit Sanjeev, an engineer at software firm Intuit and a co-organizer of the Bangalore Android User Group.