1. Journal of Management (JOM) ISSN 2347-3940 (Print), ISSN 2347-3959 (Online),
Volume 1, Issue 1, July -December (2013)
JOURNAL OF MANAGEMENT (JOM)
ISSN 2347-3940 (Print)
ISSN 2347-3959 (Online)
Volume 1, Issue 1, July-December (2013), pp. 61-67
© IAEME: http://www.iaeme.com/jom.asp
JOM
©IAEME
HUGE GROWTH OPPORTUNITIES FOR MOBILE APPS IN THE
CONVERGENCE ERA
Dr. Vinit Dani
Associate Professor, Symbiosis International University
Ms. Vanishree Pabalkar
Assistant Professor, Symbiosis International University
ABSTRACT
Mobile devices have rapidly become an important source for procuring information
through Internet. This is evident in all age groups. In a world, brimming with the latest
technologies and smart phones, which are equipped with smart apps that are either in built or
can be downloaded, which is subsequently giving rise to ubiquitous opportunities for the
gaming apps on the smart phones. Transactions on the mobile through Internet have become
part of daily life. The various apps enable one to carry out many transactions through the
mobile and therefore more customers are now willing to pay a premium price for the services
related to apps and games. One of the key drivers for this tremendous growth is the
improvements in the network quality, wide coverage and reasonable tariffs. Therefore the
customer’s experience with the service provider has been ranging from good to better which
further propels the customer to prescribe for Value added services (VAS), and other apps.As
per a report of Juniper research, November 2011, revenues from mobile entertainment
content and services are expected to increase by 15% in 2011 from $33.2 billion. Out of this,
mobile gaming has garnered around $800 million of the revenue. There is a huge surge
among the customers who intend to download and buy games on various devices including
iOS devices, and smartphones.
Key words: iOS, VAS, Mobile apps, Customer, Technologies
INTRODUCTION
Many Service providers are coming up with different innovations happening in the
field of technology which offer interesting gaming experience. These games are easily
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2. Journal of Management (JOM) ISSN 2347-3940 (Print), ISSN 2347-3959 (Online),
Volume 1, Issue 1, July -December (2013)
downloadable or can be bought by the customer at a very reasonable price. Freemium is a
business model which is one of the most preferred model that is based on the quality it has to
provide for gaming application. For the innovators, the game would cost very less and
subsequently, for a better level of gaming the user has to buy the accessories that comprise of
tools for additional levels. These are the ways and means through which the companies which
are into gaming applications generate huge revenue. According to a survey conducted, 84%
of the tablet owners are engaged continuously playing and downloading various games on
their devices. From the list of top 25 most played or downloaded games, there are 51 % of
free games, 27% cost 99 cents and $1.99 and above are 22% of the games. There is a huge
market potential for this yet, with the rapid expansion that is happening in the Android
market, there will many more free apps than the app store for the customer.The market for
Mobiles equipped with adequate no. of apps remains bullish for the young target audience
since these are the customers who are lured by the new and innovative technologies, games,
and apps that get introduced every now and then. The markets have a very optimistic growth
in the future as well.
GROWTH AND OPPORTUNITIES – THE INDIAN SCENARIO
India has a very huge potential for the mobile apps and gaming markets with over 584
million mobile subscribers for apps and downloading the games in the FYI 2010 and the
industry has very wide untapped market yet. Some of the key drivers for this boom in the
market of mobile apps include the advancements that have revolutionized the market with the
smart phones, 3G and 4G handsets that have made the life much simpler.
As per the report of India Mobile Gaming Analysis’, Indian mobile gaming industry
has been growing at a very fast rate from the past 5-7 years. It is also expected that the market
would eventually become highly competitive with entry of international players, who would
adopt some of the strategies that would either be innovative or differentiation strategies to
stand out in the market.
OBJECTIVES
•
•
To identify the drivers responsible for growth of mobile games and apps.
To understand the customer’s perspective towards downloading gaming apps.
LITERATURE REVIEW
Smart phones are all set to drive the markets with very high growth rates. A report by
Gartner says that the simple versions of the mobile phones are bound to become more
obsolete with time. It is estimated that by the FYI 2015, around 95% of the mobile phones
sold in Western Europe will be Smartphones.
Another report from Gartner says that the total number of mobile app downloads is in
the FY 2012 exceed 100 billion. The apps that are available free of cost are the ones most
preferred and downloaded than those which involve cost. By FU 2017, Gartner predicts that
around 95 percent of the apps and the games can be downloaded free of cost. This implies
that the customer would be more engaged thereby the revenue generation would this accounts
to the revenue generation. Apple, through app purchases accounts for 76 percent of all the
revenue for iOs apps.
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3. Journal of Management (JOM) ISSN 2347-3940 (Print), ISSN 2347-3959 (Online),
Volume 1, Issue 1, July -December (2013)
Ipsos Study, on Mobile Consumer Evolution 2011 states that there are currently 12 million
private users of Smartphones over the age of 18 overall and around 65-70% of them would
not like to part with the smart phone even for a minute. Managing the work, transactions
online with access to internet has actually brought in massive changes in the world.
As per a report of androidcentral.com, Virtual reality is what customers expect even in the
apps and games, but that’s going to take longer. Independent developers of apps are striving
towards developing a couple of games that would be different from the existing ones and
would drive more of customer’s attention.
The word “app” is listed as the word of the year by the American Dialect Society in
2010.The mobile apps and the games are currently at a juncture where in the next revolution
in terms of technology is looked at. This includes the virtual reality headsets like the muchanticipated Oculus Rift, there are as well gesture-based controls, like Microsoft’s Kinect and
Leap Motion, and wearable computing in the form of Google Glass.
As per ABI Research, Apple’s app store is the oldest, largest, and best.The second largest and
the oldest in apps is The Google play, around 33 percent of the apps purchased only games.
There are almost 26 cross platform app stores, 13 android, 5 iOS, and 3 Blackberry.
As per Solutions Group, 46% of the total time is spent on gaming and downloading and using
different apps.
CONCEPTUAL BACKGROUND
As per the report of Marketresearch.com, the number of apps downloaded by a person
is growing in the mature markets. The driving forces for this rapid growth include the
multiplication in the number of users of smartphones which in it selves has many apps and
few more can further be downloaded or can be purchased. The smartphone shipments
worldwide are expected to reach 823 million by end of FY 2013. Smartphones have
accounted to 41 percent of total handset shipments during the FY 2012. This is expected to
reach at least 46 percent by the year end. From 680 million smartphones shipped in the FY
2012, a tremendous growth in the shipments by 1296 is expected by FY 2017.
Similarly, the sales of Tablets are escalating and are enjoying an explosive growth.
Tablet shipments are forecast to average a CAGR of 24 percent from the FY 2012-2017,
which is a rise from 2012 shipments of 136 million, to 2013 shipments of 208 million, going
on to 2017 shipments of 398 million devices. Therefore is forecasted by Marketresearch.com
that over the period from 2012-2017, the number of apps users will grow at a CAGR of 29.8
percent, to reach 4.4 billion users by the end of 2017, which would be as much as 4 times as
the users of apps that are existing in the market currently.
METHODOLOGY
A combination of Exploratory and Descriptive research was conducted. The consumer
behavior and the drivers responsible for growth of mobile games and apps were studied
through Descriptive research. Exploratory research was carried out to understand the
customer’s perspective towards downloading the games and apps. Convenience sampling was
used to obtain the responses. Sample size was 200 customers using smart phones.
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4. Journal of Management (JOM) ISSN 2347-3940 (Print), ISSN 2347-3959 (Online),
Volume 1, Issue 1, July -December (2013)
DATA ANALYSIS
H1: Smart phones and Tablets are the main growth drivers responsible for growth in
the mobile games and the apps market.
Categories * Growth driver cross tabulation
Count
Growth drivers
Total
Yes
Smart Phones
38
50
88
Tablets
18
38
56
Entertainment
5
4
9
Fun
Categories
No
1
1
2
62
93
155
Total
Chi-Square Tests
Value
df
Asymp.Sig. (2- sided)
Pearson Chi-Square
2.802a
3
.423
Likelihood Ratio
2.814
3
.421
Linear-by-Linear
Association
.060
1
.806
N of Valid Cases
155
Observation
Calculated Chi square value = 2.802
Level of significance PH0
= 0.05
Observed value Pobs
= 0.423
If Pobs < PH0 we reject H0
Result: Accept hypothesisH1
Inference: Smartphones, Tablets and other categories where customers are seeking
entertainment and fun are the growth drivers at a confidence level 95%
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5. Journal of Management (JOM) ISSN 2347-3940 (Print), ISSN 2347-3959 (Online),
Volume 1, Issue 1, July -December (2013)
H2: The operating system of a mobile platform has a significant effect on the number of
hours spent on downloading games and apps.
Operating_System * Hours_Spent_Gaming Cross tabulation
Count
Hours_Spent_Gaming
<1
hour
1-2
hours
2-3
hours
3-4
hours
4-7
hours
7-14
hours
> 14
hours
Total
14
12
3
12
5
0
1
47
5
7
11
3
7
5
1
39
Blackberry
6
6
2
3
0
0
0
17
Symbian
17
4
7
4
0
1
0
33
Windows
1
0
2
2
0
0
0
5
43
29
25
24
12
6
2
141
Operating Antroid
_System i-Phone
Total
Chi-Square Tests
Value
df
Asymp.Sig. (2- sided)
Pearson Chi-Square
47.655a
24
.003
Likelihood Ratio
54.056
24
.000
Linear-by-Linear
Association
4.206
1
.040
N of Valid Cases
141
Observation
Calculated Chi square value = 47.655
Level of significance PH0
= 0.05
Observed value Pobs
= 0.003
If Pobs < PH0 we reject H2
Result: Reject Null hypothesis
Inference: The operating system of a mobile platform has no significant impact on the
number of hours spent on playing games on the mobile phone at a confidence level of 95%.
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6. Journal of Management (JOM) ISSN 2347-3940 (Print), ISSN 2347-3959 (Online),
Volume 1, Issue 1, July -December (2013)
FINDINGS
Mobile usage with access to Internet, games and apps is rising across all countries.
The Gender gap is also being bridged, with around 59 percent of men accessing the Internet
with games and apps when compared to women which amounts to 58 percent across the
World.
The Internet is used more for personal matters than for work related issues.
Major app stores are profiled as below:
• Apple App Store
• Google Play
• BlackBerry World
• Windows Phone Store
• Nokia Store
• Carrier-owned Applications Stores
• AT&T
• TIM
• China Mobile
• GetJar
As per Marketresearch.com, by the end of FY 2013, there will be 82 billion apps
downloaded worldwide, which would amount to a cumulative total to 165 billion apps by the
end of the year.
From this doubling of the mobile downloads, games and apps business in 2013, the
forecast is that the downloads will continue to grow at a rocket speed to exceed 200 billion
per year by the end of full year 2017, and revenues in 2017 will reach 63.5 billion USdollars.
CONCLUSION
The current areas that involve innovative and upcoming technologies include sectors
like the Hospitality, Healthcare, Retail, Financial services, Government agencies,
Manufacturing, Telecommunication, Logistics and many more to add on. The tremendous
potential that the mobile gaming and apps market holds in futures is very promising, with the
emerging technologies like ERP/CRM, there is more of scope for virtual reality.
The future therefore certainly looks promising for the Mobile application
development market and the advances that happen in this technological market never see a
slowdown.
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7. Journal of Management (JOM) ISSN 2347-3940 (Print), ISSN 2347-3959 (Online),
Volume 1, Issue 1, July -December (2013)
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