Simply too good not to have on our blog (click to expand):
“Windows Phone is the new cool” touts Vision Mobile’s latest Developer Economics report. In it, they point to the fact that 57% of developers plan to adopt Windows Phone very soon. At CodeNgo we’ve had a chance to play with the Lumia 900, and it is not a bad device at all, albeit with quite a few shortcomings in functionality compared to iOS and Android.
Top-8 mobile platforms developers are planning to use, irrespective of their main platform
The release of Windows 8 may of course change that, and with Microsoft’s recent release of the Surface tablet, chances are they may become a serious competitor in the handheld device space. They are even getting rid of old ghosts by dropping the Zune name.
So will buzz equal support? Well according to Vision Mobile it may not necessarily be so. Support will definitely be a function of the tools needed, and Vision Mobile points out the issue of having to have a PC to use the tools. Well, we are not convinced that is the case, as Windows Mobile developers may not necessarily always come from the iOS camp, and there are cross platform tools which negates the need (mostly) for Microsoft’s tools. Perhaps the biggest hindrance is a seemingly tightening of distribution around the Windows Marketplace. Windows apps used to roam free and were distributed by multiple app stores, but are now following the closed Apple model with tougher qualifications for approval and onboarding. This can be a dangerous path to follow and may end up with the same criticism facing iOS, which is lack of distribution opportunities, poor content discovery and too much work going into managing the business side.
You’ve spent months(?) slaving away creating the next cool app. You drop it in iTunes and/or Google Play and sit and wait. And wait. And wait. Chances are you will make very little money. Research from Vision Mobile has shown that most developers are disappointed with revenues (Do check out their latest Developer Economics report! Well worth a read). A few years back, other research pegged the median revenue for an iTunes app at $700. Chances are that it is even lower now.
There have been cases reported of developers selling their apps on eBay. And now a whole new set of companies like Apptopia set themselves up to actually sell the app for you. So instead of slaving through your own distribution, is selling your app the answer? We encourage you to look at the interview with Apptopia CEO on Untether.tv (note 1 hour long!).
They brings up a key point: You DO need sales and marketing in order to make money.
At CodeNgo we certainly see this as a possibility. However, if you do not try and distribute your own app, you will never learn some of the key skills it takes to make a successful app: Listening to your customer, iterating, and improving. You may not want to learn marketing and distribution either, but at least companies like ours are here to ease the pain on that. And of course, there is 0 guarantee that selling your app is any easier than trying to get consumers to buy it. But we applaud companies like Apptopia that provide alternative channel. But as with anything in business, you need to weigh the pros and cons and understand what you are doing.
Both Google and Amazon are touting subscription as the thing you should be looking at if you are a mobile app developer. The principle is quite simple as described by Amazon:
So essentially it allows you to set up a recurring charge, but with very little other functionality.
Google’s subscription is more advanced and ties in with Google Play so users can see what they have subscribed to. Google allows you do to monthly or annual billing. Upon cancellation by the user, the user can use the subscription until the end of the term. So this looks all good an exciting. And what app developer would not be happy to get customers who keep on paying? Well, before you consider subscription billing, we at CodeNgo recommend you consider three things before you launch an app with it.
1. Subscription and mobile does not have a good history
Remember the days of the ringtone subscription? Users were enticed to download a ringtone, and in the process signed up to pay $5 per week for perhaps 5+ ringtones, when most users really wanted just the one ringtone and barely realized they subscribed. In every market fortunes were built on acquiring users who stayed +12 week on a subscription plan (catch us over a beer for more details on this one :)) which covered the user acquisition costs and made it possible to have a profitable business with a billing method that saw 50% or more going to mobile operators.
So you may be thinking “But this is different!”. Yes indeed, the market has matured and so have buyers and content providers. At least some. But it does not take too many shark like content providers – and not too many upset parents who find out their kids subscribed to a pricey monthly package – to restart the regulatory issues that at least when mobile billing was concerned had the oversight of mobile operators.
2. Don’t force the model
Subscriptions are a natural fit for certain types of content, such as magazines or other types of content that gets refreshed regularly. Social games may or may not fit the bill depending on the type of game – and consider that the majority of the online social gaming guys use item billing at the moment even though subscription billing on web has been available for some time. If you have a piece of content lending itself to the model – by all means, but don’t use subscriptions purely to try and increase the amount of money you can draw from users.
3. Understand what subscriptions means for your business
This third area is arguably the most important. One off purchases are light years less complex to deal with from a business model perspective. Usually if the user gets what they want, they understand they have to pay and even though they may be unhappy, they will likely not ask for a refund unless there is a bug.
And asking for a refund for instance in Google Play is straight forward, as users can ask for a refund within 15 minutes of purchase. Not so with subscriptions, as they have to be done by the developer. So you had better be prepared for increased customer support requests.
Also, consider that for instance, Google’s set-up is such that when a user un-installs the app, the subscription continues, so even despite the fact that users are warned the subscriptions are active, this could quickly become a customer support nightmare.
Besides increased customer support, you will also need back-end systems to manage this. As Google points out:
“As a best practice, we recommend that your app includes business logic to notify your backend servers of subscription purchases, tokens, and any billing errors that may occur. Your backend servers can use the server-side API to query and update your records and follow up with customers directly, if needed.”
Also, you need to manage subscriptions and have reports and alerts for new subscriptions, cancelled subscriptions, upgrades/downgrades (if offered), suspended subscriptions – as well as understanding when your subscriptions expire and renew. This is essential in order to manage the subscriptions business in an effective way.
So while we are excited that subscription models are now possible in-app, we are cautiously optimistic to the premise. In a sense, this is yet another fragmentation layer – one of business models, that adds to the multiple levels of fragmentation already existing in mobile. But at least this one is built around monetization rather than technology platforms 🙂
Google recently announced they will be supporting subscription billing in their in-app billing engine. A Senior Vice President for Glu said “In-app subscriptions allow us to offer entirely new types of products, things that just weren’t possible before,” — “This is huge for us and game developers in general.”
So will subscription really be this huge? Maybe, maybe not. If you look at the social gaming space online, there is clearly a heavy bias towards virtual currencies and item billing, although subscriptions are becoming popular (billing providers like PlaySpan recently announced support for subscription services). There is a reason for this. Subscription simply do not work for all types of services, and can be prohibitive from monetizing users who do not want recurring transactions happening. Also, subscriptions require a lot more managing and hand holding of users (switching plans, canceling before term, messaging before renewal, setting ideal bundles, etc, etc).
You can tell that we at CodeNgo are not sold on subscription being as big as item or per download billing. We do however thing it is a pretty important step as it will allow developers to experiment with the category. But we certainly fair the old days of subscription billing for mobile content where users were overcharged for content they did not want. If subscription billing is you choice, then make sure you do you research behind the economics of how you do it correctly. We will provide more research and background on this topic in the future.
HTML5 has a few challenges in reaching its potential in the mobile space. Although the platform offers opportunities for developers to bridge the gap between platforms, it also creates a problem with its ability to reach customers like iOS and Android markets. HTML5’s ecosystem needs channels for distribution to app stores, but the HTML5 based platform still lingers between the gap of compatibility as leading app platforms.
Opportunities Are Available
Developers can enjoy the benefits of HTML5’s platform, but the lack of discovery, monetisation and retailing is short for support. Unlike Apple/Google’s platforms, HTML5 bridges the gap between systems and it may be the answer to developer woes of which platform to support. According to the Vision Mobile’s Clash of Ecosystems, HTML5’s promises for the mobile space is infinite because it uses the basic structure of the mobile web browser to access application instead of specific mobile configurations for use (2011).
Once HTML5 reaches its position of control in the mobile space, customers will have access to HTML based apps with appeal and usefulness that is readily available through discovery of its technology like Apple/Google’s app stores (VM Clash of Ecosystems 2011).
Facebook Sets An Example
With HTML5 being a business model, it is also the first platform crying out for developers to enhance its possibilities. Companies such as Facebook are using discovery and vision to build on its talents for creating HTML5 apps specific to its customers needs.
An example of this clever strategy is the Spartan project, an HTML-based app store, that avoids the concepts of Apple-Google dependency (Vision Mobile 2011). Currently, Facebook Platform has over 300 million mobile users through its app store based on the HTML5 model.
Independents Bridge the Missing Links
Independents flourishing under Apple-Google app dominance can build a name for themselves while helping developers gain leverage in producing high-quality apps. App store approvals are possible if developers are willing to invest their time with reliable distribution companies.
The interlink of professional distribution opportunities for HTML5-based apps is possible with an independent firm. Furthermore, if connected with the right intermediary such as Codengo, developers are in the right position to reach a bigger audience to earn a profit from their apps.
Additional Sources:
http://news.cnet.com/8301-1023_3-20103948-93/getjar-offering-premium-android-apps-for-free
http://www.visionmobile.com/blog/2011/09/discovery-kills-distribution-the-real-impact-of-the-web-highway
http://www.wired.com/gadgetlab/2010/06/independent-app-stores-take-on-googles-android-market
http://www.visionmobile.com/blog/2011/11/new-report-mobile-platforms-the-clash-of-ecosystems
http://www.visionmobile.com/product/clash-of-ecosystems/
Reading about the massive fragmentation issue that exists in Android today in a recent TechCrunch article is really an eye opener. The amount of devices games developer Animoca had available to test was a flashback to the old days of J2ME (insert shivering here). This is not news to industry insiders, and industry experts like Vision Mobile have pointed this out many times before. But the TechCrunch article and the great image posted here (courtesy TechCrunch) may open the eyes of all app developers to the issue in understanding the level of this fragmentation that has to be overcome for developers to increase their coverage so that they can realize the true revenue potential of their app.
However, fragmentation has multiple sides. If you for instance think you can make money in Asia using PayPal or Google Wallet as your in-app billing engine, guess again. Virtually nobody will use them. And of course you need to have the right local ad network if ads are your monetization strategy. Also, you will quickly reach language barriers, and even in countries where presumably English is well known, preference is likely to be given to apps in local language.
Another fragmentation is distribution and marketing. Your app should be available in as many places as possible, and you need to figure out what you can do to drive downloads once you have gotten distribution coverage.
All of this is a tall task even for fairly large developers. But this is also why CodeNgo is here, to help ease the business side of your business – so you can focus on what you do best: Create cool apps!
Small and medium development houses have to jump through hoops to receive app store approval. As if HTML5 wasn’t difficult enough to work with, there are a number of other problems that come with trying to submit content to additional appstores. Just like a real ecosystem can become polluted over time, the developer ecosystem that evolved out of the market place has grown to a point where it’s hard to submit apps to additional app stores, and this has caused a great deal of fragmentation. Submitting content to the iTunes Appstore and Android Marketplace is a good start, but after that, most people are drained and wouldn’t want to try to get better results with services like GetJar, Amazon and Samsung. This is sad, considering what it can do for a business.
However, there is a world outside of the Android Marketplace and the iTunes Appstore. People spend so much time working to get these two stores to approve their apps that they don’t have time for the more important things in life. If one can get their program accepted at these two stores, they might try to struggle and apply for the Amazon App Store. After that, they don’t even have time to feed their pets, much less manage another developer account at an alternate appstore.
GetJar is a Lithuanian organization that has become rather interesting in the last few years. While many of the other app distribution platforms are connected to particular companies, GetJar is truly independent. It is a smaller digital software store that can be reached from a single location. This ensures that a larger number of customers can view the work in question. Despite GetJar being a small organization, it has been the store of choice for over one billion downloads. After all, there’s no better place to sell apps than across the shores of the Baltic Sea, and the Trakai Island Castle looks like a mobile phone tower as it is.
That’s not to say that GetJar is the only additional appstore around. Samsung is the largest smartphone manufacturer in the industry, and each of their mobile devices comes preinstalled with an application to access their own app store. This can translate into a world of new customers who have ready access to your mobile phone apps without any other special marketing. It’s the perfect captive audience.
The Amazon Appstore might have complex terms of service, but considering how they’re already involved in sales, they know how to run a business. Developers are paid either 20% of the list price or 70% of the sale price. If that wasn’t enough, they offer free apps to keep people coming back.
Businesses like CodeNgo let developers manage all of these stores from one single account, as opposed to having to do it by hand. By being listed on new stores, there are better opportunities for individual apps to shine. The iTunes and Android Markets are cluttered, so by fleeing this clutter, developers can begin to explore the profitable world outside of them.
The approval process for the App Store is a love-hate relationship. It is a process that most developers state that Apple “loves,” but I “hate”. From the beginning, Apple has had very strict rules on how it would approve or deny new apps. Apple feels that the approvals process should be this way to avoid malicious or damaging apps entering into circulation such as with Android or Getjar. The company believes the current approval process maintains the integrity of the Apple environment.
Secretive Approvals Process
Though Apple has released the “App Store Review Guidelines,” I find the process is still nerve-wracking, frustrating, time-consuming and clouded in mystery. Even with these guidelines, I am still uncertain about how an app I’ve created is fully approved. In some instances, a developer has complained that after “ticking all of the boxes” that Apple required, a HTML5 iPhone app was still denied. This leads me to not want to give my full effort in any future app development for Apple.
Lack of Transparency
Another problem I have with App Store Approval is the lack of transparency. Apple should produce a detailed review of why an app I submitted was not approved. Even before an app is approved or denied, there should be a progress report on the stage the app is in during the approvals process. I have had instances in which I submit an app and then a month later, I am told it is not suitable for the Amazon App Store. The lack of transparency on how my apps are being tested or evaluated during the approvals process just makes it easier for Apple to deny its inclusion.
Lack of Feedback
Another frustrating reason why I hate App Store Submissions process is the lack of feedback. Even though Apple might believe that this process can maintain the quality of apps within the App Store, its lack of feedback makes the process worse for developers like me. Feedback should not only be given to all software designers that have had their submissions denied, but also designers that have had their submissions approved. By giving detailed feedback, we can improve the quality of the submissions we send to Apple.
