App Stores Growing Rapidly Globally Source: Distimo Mar-2010 The iPhone App Store grew from 500 apps in Jul-2008 to 170k in 1.5 years and the number of Android apps is doubling every 3 months. As of 7 June 2010, over 225,000 apps in the Apple App Store (source: Wikipedia) As of 1 July 2010, over 100,000 apps in the Android Market (source: AndroLib)
Numerous players have launched or are in the process of launching appstores and providing users with a diverse app selection is needed to remain competitive. Mobile Carriers Device Makers Other And also happening in China CMCC Mobile Market CU App Store CT App Store 联想乐 Phone 商城 华为智汇云 OPPO Market MDO Market MOTO SHOP4APPS 索尼爱立信 PlayNow 91.com 机锋市场 MTK
Mobile Advertising is a Key Component of the Mobile Ecosystem Source: Morgan Stanley As the mobile internet increasingly complements and in some cases replaces existing PC internet functions, mobile advertising is becoming more and more important. “ We can make more money in mobile than desktop eventually because the mobile computer is more targeted. You carry your phone everywhere, it knows all about you, it knows what you’re up to. We can do a very, very targeted ad. Over time, we’ll make more money from mobile advertising.” -Eric Schmidt
Users Love Free: Free Apps Drive Usage Users download free apps 4-7x more frequently than paid apps and even accounting for slightly higher time spent per paid app, users spend significantly more time on free apps as a whole. Source: Admob, n=963 While Time Spent per Paid App is Slightly Higher… … Free Apps Are Downloaded 4-7x More Frequently Source: Pinch Media
Almost All Users Download One or More Free Apps Per Month… 98% of iPhone and Android users download one or more free apps per month, and around 60%-70% of users download over 4 free apps. Source: Admob Note: Slightly higher percentage of non-downloading webOS users may be due to higher webOS app prices in general.
… And 1/5 of iPhone Users & 1/2 of Android Users Never Download Paid Apps Many users only download free apps, which suggests providing a sufficient number of free apps is important for user satisfaction and monetizing the mobile web; if carriers do not provide these apps, someone else e.g. Android Market, device manufacturers will. Source: Admob
Its not a conflict for developers to generate revenue form both in-app ads and paid services Paid Applications In-app Ads
Apple’s iAd Offering is A Sign of Coming Mainstream Mobile Ad Acceptance In early April, Apple announced mobile advertising would be integrated into iPhone OS v. 4.0, with advertising functions integrated in-app i.e. without requiring users to leave applications post-click, and full-screen video display. Developers will receive 60% of total advertising revenues, on par with other mobile ad players. “ This is not a get-rich-quick scheme for Apple. This is us helping our developers make money so they can survive and keep the prices of their apps reasonable.” -Steve Jobs