2013 was a good year for mobile app developers. Revenues from app development in major app stores reached historical levels, with Android apps doing especially well in Asian markets. Shopping apps were wildly successful with consumers, especially during the ramp-up to the holiday shopping season. Geo-targeted app experiences – ads, push notifications, and location services – made great inroads with app users, even as privacy issues continued to hang overhead. These trends and more were the focus for mobile app development in 2013.
Making money with app development is obviously a strong focus for mobile developers. In 2013, the rise of the freemium business model, with in-app purchases taking the place of an upfront app purchase, became the most successful monetization model for developers in both the Apple Store and Google Play:
“The Freemium Business Model – free apps with in-app purchases – makes up the largest revenue share in the Apple App Store. Our analysis showed that this revenue share even increased over the year. While the Freemium revenue share was at 77 percent in January, it grew to 92 percent in November based on globally aggregated data for the Apple App Store. The other business models, paid apps without in-app purchases and paid apps with in-app purchases, made each only 4 percent of the revenue in November 2013. The same trend holds true for Google Play.” – 2013 Year in Review, Distimo.com
The Apple Store continued to outpace Google Play in terms of sheer revenue, with Apple leading with 63 percent to 37 in November 2013. However, money is still not the number one factor for developers choosing to make apps for a living, and the freemium model is not necessarily the one that’s going to take all the chips and go home. According to a survey of over 6000 mobile developers from VisionMobile, monetization is just part of the greater equation:
“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.” – 2013 State of the Developer Nation
This finding coincides with a recent survey on developer economics put together by analytics firm VisionMobile, which polled 6000 respondents from 115 different countries on their motivations, challenges, and future plans for app development. The results give some intriguing insights into what are the prime motivating factors behind what developers do; namely, a sense of achievement and not money is the main motivating factor in software development (of course, a paycheck is always appreciated). . Creativity and a sense of achievement are what make the difference for 53% of developers, while the most important goal for 33% of those surveyed is simply gaining knowledge, having fun, or making strides towards self-improvement.
Geography and form factors
The app ecosystem continues to push through to wider global markets, with apps finding greater adaptation through both the major app stores as well as country-specific marketplaces. The Asian market in particular saw exponential growth in 2013, with the freemium model making up most of the purchased app revenue:
- “The top 10 countries in terms of mobile app revenue from the Apple App Store and Google Play are:1) United States 2) Japan 3) South Korea 4) United Kingdom 5) China 6) Australia 7) Germany) 8 Canada 9) France 10) Russia
- The three countries with the highest market growth in 2013 compared to 2012 are: South Korea, Japan, and China.
- 2013 showed an increasing trend towards the freemium business model, while paid apps made up a smaller portion of mobile app revenue.” - 2013 Year in Review, Distimo.com
Cheaper devices with more computing power made for greater availability in global markets, which contributed greatly to app stores’ bottom lines. A report from the International Data Corp states that the average price of smartphones this year was $337, down from $387 in 2012. By 2017, the IDC predicts that the average cost of a smartphone will be down to $265 or less. Internet access also is cheaper, with fast speeds the norm in most Asian countries:
- 44% of Android users in China use Wi-Fi for their access to the Internet, especially for video. 31% get their information from 2G networks, and 23% use 3G.
- App downloads for Chinese Android device owners are growing exponentially: the average user downloaded 10.5 apps per month in Q3 2013; the previous year, it was 8.2 apps monthly
- 15% of Android users in China install at least one new app a day vs. 11% in Q3 2012
- 59% use app stores to download their apps, while 13% use online app searches and 21% use their PCs to sideload apps onto their Android devices
Notable trends in app development
The top downloaded app of the year for both major app stores and in all global markets was King.com’s Candy Crush Saga, proving once again that games are pretty much the horse to bet on with users. More trends:
- Apps were explored more quickly than ever before in 2013.
- We identified apps that reached over one million downloads in only a couple days after release, e.g. Despicable Me: Minion Rush and Temple Run 2.
- For some apps, the download volumes from the Amazon Appstore started to compete with download volumes in established app stores like the Apple App Store and Google Play.
- The most revenue generating app of 2013 was Supercell’s Clash of Clans, making Supercell the top grossing publisher of 2013 in the Apple App Store.
- None of newly released apps of 2013 reached a top 10 position in the yearly grossing charts in the Apple App Store. In contrast, four out of the top 10 grossing apps on Google Play were released in 2013.
- Minecraft – Pocket Edition by Mojang was the only paid app in the top grossing charts of the Apple App Store.
Shopping apps proved to be a great boon to both online and brick and mortar retailers, especially in the 2013 holiday shopping season, specifically, Cyber Monday (traditionally this is the Monday after Thanksgiving focusing on online shopping only). According to Adobe’s Digital Index 2013 online shopping data for Cyber Monday, online sales for the day increased by 16 percent year-over-year (YoY) to $2.29 billion. A record 18.3 percent of sales came from mobile devices, an increase of 80 percent year over year. Tablets generated the majority of mobile driven sales at 12.7 percent of total online sales.
Other trends that impacted mobile app development in 2013:
- Geo-targeted push notifications: Users are connected to the businesses and organizations they choose to download apps from
- Geo-targeted advertising: Contextual advertising takes on a whole new personal touch with geographically targeted advertising within apps
- Dealing with bounce rates: Mobile users are notoriously inpatient and not willing to fill out tedious forms. Mobile app developers are becoming more mindful of that, creating “transactional apps” that automatically fill out geographically targeted information
- NFC: Near field communication is starting to become a must-have for app users, even though it is still just in the beginning stages
- Battery power: App users are starting to become more savvy with the apps they download, and if an app is too much of a burden on a smartphone battery, it gets dumped quickly
- Business and productivity apps: Users want apps that help them accomplish something, and BYOD apps continue to gain important ground
Along with games social networking apps continue to be the most popular apps in app stores with no sign of slowing down. Mobile app development includes social integration now as a matter of course; it’s a necessary feature that users expect, especially integration with Facebook:
- More app developers integrate with Facebook than any other major social media provider (66% – Twitter is a distant second at 52.7%);
- This lead can’t be chalked up solely to Facebook’s authentication service. When asked how they were managing user authentication inside their apps, most developers reported relying on traditional web protocols (38.7%) or specific methods such as SAML or OAuth (21%). Social media services such as Facebook were third at 19.1%.
- Facebook’s switch from HTML5 to native apps and their investment in mobile-friendly APIs such as Open Graph were ranked one and two respectively by developers when asked to judge the company’s smartest mobile bets.
Design in app development has always been of paramount importance, but in 2013 it took center stage as more users are putting a premium on well-designed apps that make their experience even more enjoyable. Clean navigation, a simple yet powerful user interface, and powerful features are what made 2013 apps stand out in the marketplace. Content remains the most important design factor:
“Another app design trend that has been dominating the mobile app design scenario in 2013 is – more emphasis for clear and complementary CONTENT, rather than factors like user or interaction. More recently, popular mobile apps like Facebook, Vine and Pinterest have feature streamlined grid layouts focused on a single image or other posted content. The usability factor of such a design layout is that it pulls the posts into one column allowing users to swiftly scroll through hundreds of posts at a time.” – Apps-World, whitepaper (PDF)
Platforms and OS
Android and HTML5 are the standouts in 2013, with a report from VisionMobile showing research from 6000+ developers that Android leads at 71% of developers using that platform, with iOS following at 56%. HTML5 gained great ground in 2013, with 52% of the developers surveyed reporting that they used HTML5 for development:
Drilling down further, it’s clear that successful app development can’t be focused on just one platform, however. Different games run on different platforms, operating systems, device models, different screen adaptations, aspect ratios, even different versions of the same platform. Developing games for all the different platforms out there is (to say the least) a time-consuming process. Developers have to optimize game projects for each device, taking the time to test everything so there aren’t problems down the road. While it’s certainly fantastic that we have a wide variety of devices available to us as consumers, for developers, making games that will function on the majority of the devices on the market is becoming an increasingly more difficult task. Developers have to prioritize according to monetization, access, and features which platform they will choose to create their next app for:
“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 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%) to iOS (21%).” - 2013 State of the Developer Nation
Trends in 2013
Trends for mobile app development in 2013 set the stage for what we can expect in 2014. What are your predictions? What are your opinions on mobile app development and where it went in 2013? Share your thoughts with us in the comments.