Foreword
The App Store – an accidental success
The iPhone revolution
Launch of the App Store
The start of the iPad phenomenon
How the App Store works
The App Store’s win/win strategy
App Store approval process
WrAPP up
The smartphone explosion
Competition in the smartphone marketplace
The rise of tablets
Apple ups the anti
Launch of the iPhone 5
Google plays catch-up
Which platforms are people using
WrAPP up
Growth of apps
What apps are people downloading and why?
Games
Angry Birds
Fruit Ninja
Draw Something
Social networking
Gaps in the app marketplace
The best of the best – 2012
WrAPP up
The app potential of emerging and non-Western markets
China
Japan
India
Trends with app users
App development
South Korea
The Middle East
WrAPP up
How apps are being used
Gaming
Effect of apps on games competitors
The rise of branded gaming and entertainment
GPS navigation
Content sharing apps – videos, photos
Social apps
Telecommunications
Book publishing
Experimentation in the e-book market
Comics
News publishers
CNN
BBC
ABC
Banking
Health
Travel
Online retailers
Amazon
Bricks and mortar retailers
US retailers
Walmart
Overstock
Saks Fifth Avenue
Australian retailers
Woolworths
Sportsgirl
StreetHawk – a new world-first Australian app
Other examples of branded apps
Coca-Cola
Red Bull
McDonald’s
Starbucks
WrAPP up
The future is mobile
Is the Web becoming redundant?
Who are using smartphones?
Most mobile time is now spent in apps
The potential of smartphone and tablet shopping
Is appvertising the next big trend?
How do you optimise your apps for mobile?
Appvertising in games, social networks and beyond
Web-based apps
Is appvertising right for your business?
Predicted growth of appvertising
How to approach appvertising
SMS text-based advertising
Location-based advertising
App-embedded advertising
Mobile display ads (similar to banner ads)
Click-to-call ads
Social network mobile ads (Facebook, Twitter, Pandora, etc.)
Appvertising strategies
Why the tablet should not be considered as a larger smartphone
WrAPP up
How to create successful apps and promote them
Should you outsource or develop your app yourself?
Developing your own app
Options if you are not a developer
Outsourcing app development
DIY app-creating software
Key steps in app development
Maximising your app’s chances of success
Start at the top
Ready, set, grow
Stop telling, start yelling!!! – how to promote and gain attention with apps
Case study – early example of a branded app
App pricing is discovered not invented
Pricing strategies for apps
When might you consider lowering your price?
WrAPP up
Appvertising tips
THINK BIG, talk small
The power to begin again
Can’t someone else do it?
Hasn’t it been done before?
When people start digging for gold, start selling shovels
Innovate or die
Borders
Fairfax
Kodak
Polaroid
Keep evolving apps
Grow up, but keep your thoughts childlike
Keep it simple stoopid
Build ladders for others to climb
It’s not always about being the first
Betamax vs VHS
Apple
A new approach to copycats
Separate yourself from your title, your opinions and your company
Where focus goes, energy grows
The name game
The app icon is your business card
Choose what will go under the logo
Develop a description of your app
Watch it grow – or watch it go
Hear the ratings but don’t listen too closely
WrAPP up
The future of apps
Reflections on future trends in apps
Some directions in which technology and apps are heading
Google’s Project Glass
New uses for iPhones
Digital billboards
Mini-series on iPad
Transactions through mobile apps
Mobile Internet banking
Mobiles as wallets
Speech recognition and virtual shopping
The future of QR codes
OTT services
LIFX – Wi-Fi-enabled LED light bulb
Advances in camera technology
Lytro – ‘shoot now, focus later’
Cameras with gigapixels
Google’s self-driving cars
Augmented reality
Drones
WrAPP up
WrAPPing it all up
Acknowledgements
Mobile phones will soon be the highest reach and most widely used medium. It is predicted that 44% of users will go to bed with their mobile within arm’s reach. Mobile applications (apps) are the most rapidly growing advertising market. And this is despite many false starts on mobiles – flops such as WAP (Wireless Application Protocol) which failed to catch on as expected, and the Nokia Ovi Store which acknowledged defeat in February 2011 by moving all Nokia phones to the Windows platform.
The Apple App Store has already hit 40 billion downloads. 80% of Fortune 500 companies have iPhone apps and 65% have iPad apps. The worldwide online app market is expected to grow from about $6.8 billion in 2010 to $25 billion by 2015. Sales of web-enabled mobile devices have surpassed sales of web-enabled laptops, notebooks and desktop computers.
Apps as we know them look like they’re here to stay. They are produced with a unique win/win formula which benefits the user, the developer and the brand. It costs very little (~$100) to setup an account and almost nothing to integrate ads or create in-app purchases.
So why isn’t everyone on board? And why are some companies focusing everything on mobiles and making millions?
In this book we explore the ideas, theories, strategies and technologies behind apps, with interviews and insights from the very best in the industry. Armed with this information, you will be able to improve your clients’ apps, your company’s apps, your own personal app project, and the app idea you’ve always wanted to make a reality.
Enjoy!
Apps were born in 2007 when Apple launched its first iPhone. But it was an accidental birth. While apps and the App Store have been a huge success for Apple, they weren’t initially part of Apple’s grand design.
We want to reinvent the phone. What’s the killer app? The killer app is making calls! It’s amazing how hard it is to make calls on most phones. We want to let you use contacts like never before – sync your iPhone with your PC or mac.
Steve Jobs
The iPhone was all about making mobiles more user friendly – making it easier to make calls and use contacts. Initially it was seen as just another mobile phone in an already crowded market, and it was widely predicted to fail, especially by players in the mobile industry.
There’s no chance the iPhone is going to get any significant market share. No chance.
Steve Ballmer, MSFT CEO, 2007
But, of course, it didn’t fail. It was an instant success and a demonstration of the power of not being the first to market and developing a product that met the needs of consumers – needs that were unknown before they started using their iPhones.
iPhone 4
And one of its key attractions was the distinctive difference of the iPhone from conventional mobiles – its built-in ‘touch’ applications (or apps) rather than buttons. This engaged both users and developers.
What do you see when you turn on the iPhone? Apps!
Essentially, the iPhone turned the mobile into a software app. Everything on the iPhone was an app. This concept changed what a mobile phone was and how it was used.
Developers started trying to crack the iPhone’s operating system (iOS) and develop apps for users by ‘jail-breaking’ their iPhones.
Several of today’s hit iPhone games began life as unsanctioned apps ... and the Appillionaires1 owe much of their success to this pioneering few who dared tinker with their expensive new iPhones to install software. At the time, the work of these hackers seemed little more than a curiosity, but it would ultimately change everything...
Chris Stevens, Appillionaires
The iPhone’s underground app store, Cydia, became so popular that Apple’s CEO, Steve Jobs, took the unusual step of pre-announcing that an official Apple App Store was on its way.
The official launch of the App Store was on 10 July 2008, with downloadable apps for the iPhone and iPod touch.
The next generation iPhone, the iPhone 3G, was launched the following day, with downloadable programs, GPS and faster data. It was such a runaway success that the launch day recorded AT&T’s ‘best ever day’s sales.’
The App Store was also an instant success. At launch the App Store had about 550 apps (a mixture of free and paid), about a third of which were games. And the most popular downloads for the first couple of years were games.
More than 10 million iPhone apps were downloaded in the first three days, and 60 million in the first month. Two months later, 100 million apps had been downloaded, and there were over 3,000 mobile apps available in the App Store – more than 600 free, and 90% priced at less than $10.
A month later, just over 100 days after launch, 200 million apps had been downloaded.
The next milestone was 1 billion apps downloaded, reached in April 2009. The App Store website celebrated with the following caption:
Thanks a billion. Over 1 billion downloads in just nine months.
By November 2009 more than 100 million iPhone and iPod touch apps were being downloaded each month. Apple users were averaging 11 app downloads a month, three times more than the average Android users and six times more than the average BlackBerry users.
In September 2009, games lost their dominant position in the App Store market to books, with books now accounting for one out of every five new iPhone and iPod touch apps.
The pace of app downloads and new apps available has continued to accelerate. Here are some App Store milestones:
|
Date |
Apps |
Number of iOS |
|
11 July 2008 |
0 |
500 |
|
14 July 2008 |
10 million |
800 |
|
Oct 2008 |
200 million |
7,500 |
|
Jan 2009 |
500 million |
15,000 |
|
April 2009 |
1 billion |
35,000 |
|
July 2009 |
1.5 billion |
65,000 |
|
Sept 2009 |
2 billion |
85,000 |
|
Jan 2010 |
3 billion |
120,000 |
|
Sept 2010 |
6.5 billion |
250,000 |
|
Jan 2011 |
10 billion |
350,000+ |
|
March 2012 |
25 billion |
550,000+ |
|
June 2012 |
30 billion |
650,000+ |
|
Sept 2012 |
35 billion |
700,000+ |
On 7 January 2011, Apple launched the Mac App Store, with apps designed for Mac computers.
Christmas 2011 saw a frenzy of app downloads with more than a billion apps downloaded in a single week, according to analytics firm Flurry. A huge 509 million apps were downloaded in the USA, while 99 million were downloaded in China and 81 million in Great Britain.
In its blog, Flurry predicted that in 2012 ‘breaking the 1 billion barrier per week will become more commonplace.’
Flurry also estimated that nearly seven million iPhones and Android devices were activated on Christmas day.
When the App Store reached 25 billion downloads in March 2012, Apple’s website featured the following caption:
A billion thanks. 25 times over.
The App Store has reached 25 billion downloads. Thanks for getting us there.
By September 2012, App Store downloads had increased by another 10 billion to reach 35 billion. In January 2013 it became 40 billion downloads, the 40 billion milestone does not include updates or re-downloads.
The next iOS2 product to contribute to the phenomenal growth of apps available and downloaded was the iPad tablet.
As Steve Jobs revealed after the successful release of the iPad tablet in 2010, Apple began developing the iPad before the iPhone, but temporarily shelved the project when they realised that the ideas behind the iPad would work just as well in a mobile phone.
When it was launched, the iPad became a runaway success for Apple. In April 2010, in the first four weeks after its launch, 1 million iPads were sold, and more than 12 million iPad apps were downloaded from the App Store.
By the time the iPad 2 was launched in 2011, more than 15 million iPads had been sold and it was seen as a must-have entertainment and work device. In the fourth quarter of 2011 alone, Apple sold 15.4 million iPads.
Today, people are increasingly using their iPads in place of traditional computers.
While advertisers and marketers are beginning to dabble with the iPad, established publishing brands took the bull by the horns and developed iPad apps as an extension of their offering. For example, Business Spectator has an app focusing on video interviews and commentary, Fairfax Media has a portfolio of websites, tablet and smartphone apps (including the online news sites smh.com.au and theage.com.au),and the Nine Network has Nine Newsbreak for iPad.
Here’s how Apple’s website describes the iPad (third generation):
Pick up the new iPad and suddenly, it’s clear. You’re actually touching your photos, reading a book, playing the piano. Nothing comes between you and what you love. To make that hands-on experience even better, we made the fundamental elements of iPad better — the display, the camera, the wireless connection. All of which makes the new, third-generation iPad capable of so much more than you ever imagined.
... Everything you do with iPad, you do through its large, beautiful display. And when the display is better, the entire iPad experience is better.
In addition to the usual features (such as email, browsing, messaging, contacts), Apple promotes the following uses for the iPad:
The App Store is accessible from the iPhone, iPod touch and iPad via an iOS app. The store is also accessible through iTunes, and on any operating system for which iTunes is provided (Mac OS X and Windows).
One of the keys to the App Store’s early runaway success is the centralised payment system through iTunes. Millions of potential customers had already supplied Apple with their credit card information to buy songs through iTunes. The same process was used by Apple for payments of apps. People were, and are, willing to pay small one-off sums for low-cost, single-purpose apps so long as it is to Apple, a company they trust, through iTunes.
This payment system has proved convenient for both customers and developers. One app can now potentially make a lot of money for its developer from thousands of very small transactions, and the developer has no worries about collecting the money.
Apple quickly realised, after the launch of the App Store, that popular apps could not only make money for Apple (Apple receives a 30% commission on all app sales) and their developers, but also sell iPhones.
A good example was iBeer. This app gave Apple lots of free publicity for their iPhones as users loved demonstrating the app to their friends. iBeer took the concept of drinking beer and linked it to the iPhone’s accelerometer (a feature which detects the angle at which the iPhone is being held). A user could take out their phone and pretend they were drinking a beer.
The app originally cost $3 and was created in 2008 by indie (independent) developer Hottrix. Competitors soon jumped on the bandwagon (e.g. iPint) and it is now a free app.
Apple set a low entry bar for developers– just $99 to sign up as an iPhone developer. In return, Apple made their SDK (software development kit) available as a free download to developers.
The App Store has been one of Apple’s huge successes. It was estimated, as at 19 December 2011, that the App Store is worth around $7.08 billion.
One of its unique features is that it’s a win/win for everyone – not just for Apple, but also for developers and users.
It’s also a win/win for users, who love apps and are voting with their wallets and an ever increasing volume of downloads.
For developers, the App Store represents the first time a distribution channel has existed for a single developer to distribute their products to tens of millions of people.
Even if the app store is not a goldmine that will turn any game developer into a billionaire, it is still a revolution in the industry. It has allowed very small teams to make fun games relatively cheaply and commercialize them in a very simple way, potentially reaching millions of players. Never before have we seen so many indies and such a great creativity in the indie world.’3
And for some developers it has been a goldmine. Apple announced in June 2010 that developers had earned more than $1 billion in App Store revenues. In March 2012 it reported that it gets more than 26,000 apps submitted to its iPhone and iPad App Store every week – about 1.3 million a year.
All apps are subject to approval by Apple, and this has caused quite a lot of friction between developers and Apple. In the early days, developers complained about inconsistency and a lack of transparency in Apple’s approval process.
Apple improved the process by providing guidelines and information on the approval process, specifying the issues that cause an app to be rejected, and reducing the time taken to approve an app.
In September 2010 Apple published its App Store Review Guidelines for developers on its website, with ‘rules and examples across a range of development topics, including user interface design, functionality, content, and the use of specific technologies.’
Apple also rates apps worldwide based on their content and suitability for different age groups – from a 4+ rating (contains no objectionable material and suitable for all ages) to a 17+ rating (only suitable for users who are 17+).
During Apple’s WorldWide Developers Conference 2010, Steve Jobs said that apps were rejected for three main reasons:
1. They don’t function as advertised.
2. They use private APIs, i.e. functions that are not available in the iOS SDK.
3. The app crashes frequently.
Eric Mack4 listed the five apps banned from Apple’s App Store in 2011:
1. Drivers License, which allowed users to create a fake drivers license using a photo, biographical information and a (US) state template of their choice.
It was removed after two years on the App Store, as concern had been expressed (by a US senator) that it encouraged identity theft.
2. Apps like Buzzed, which provide information about nearby DUI checkpoints to help over-the-limit drivers avoid DUI checkpoints.
On its App Store guidelines, Apple now bans ‘Apps which contain DUI checkpoints that are not published by law enforcement agencies, or encourage and enable drunk driving.’
3. Phone Story only lasted a few hours in the App Store. It was a game that allowed players to force African miners to extract the minerals used in the manufacture of iPhones (and other things) at gun point. Apple clearly does not like games that criticise Apple.
4. iTether allows iOS users to turn an iPhone into a portable modem and tether their 3G connection to a laptop or other device to get online when there’s no Wi-Fi around.
It was pulled from the App Store as it violates the carriers’ terms of use plus its one-time fee is significantly cheaper than the usual monthly fee charged for Internet access.
5. Tawkon is an app which determines how much radiation users are soaking up while using their smartphone, plus tips on how to lower their dosage.
The app was rejected by Apple. Steve Jobs’ response reportedly was ‘No interest.’
Note that an Android version of the app has been downloaded hundreds of thousands of times and generally gets good reviews.
In March 2012, Apple said that it rejects close to 30% of apps submitted – for failure to adhere to its developer guidelines.
1 Developers who have made millions of dollars developing apps.
2 iOS is Apple’s mobile operating system.
3 Emeric Thoa, Money and the App Store: a few figures that might help an indie developer, posted on 01.11.12.
4 PC World 14 December 2011.
Apple wasn’t the first to market with a mobile phone. Motorola was the early innovator, with the first mobiles appearing in 1983. By 2008 the mobile phone market was dominated by Nokia and BlackBerry.
Apple’s great innovation in the mobile phone market, with the launch of the iPhone in 2007, was to fundamentally change what a mobile (or cell) phone was and how it was used. It invented the ‘smartphone’ – and all the others in the market place found that they had to move to the smartphone operating system (OS) in order to stay competitive.
Competitors quickly followed Apple and developed smartphones and stores for their mobile apps. Google bought a small start-up company, Android, in 2005,and made apps available on the Android Market; Microsoft released the app store Marketplace to support its new Windows phones platform; Nokia released the Ovi Store; Samsung created Samsung Apps; and RIM (Research in Motion) launched its application store BlackBerry App World.
Usage is growing fast and is outpacing the PC revolution of the 1980s and the Internet boom of the 1990s. According to IDC, over 800 million PCs were sold between 1981 and 2000. Since 2007, more than 500 million iOS and Android smartphones and tablets have been activated.
In 2011 smartphones sales exceeded PC sales. And it is estimated that tablets will exceed PC sales in 2–3 years.5
Flurry estimates that, by the end of 2012, more than 1 billion smartphones and tablets will have been activated. In other words, the rate of adoption of smart devices is more than four times faster than that of PCs. We are seeing a huge shift in consumer behaviour.
Source: www.ourmobileplanet.com
The 2012 Our Mobile Planet smartphone research6 shows that the highest smartphone adoption is in Australia, UK, Sweden, Norway, Saudi Arabia and the UAE (United Arab Emirates) – all with more than 50% of their population on smartphones. An additional seven countries – the US, New Zealand, Denmark, Ireland, Netherlands, Spain and Switzerland – have more than 40% smartphone penetration.
And smartphones are increasingly becoming part of our daily lives. We are using them to make and receive phone calls, send and receive text messages, send and receive emails, access the Web, take and share photos and videos, and download and use a wide variety of apps.
Source: 2012 Our Mobile Planet
People are increasingly using their smartphones to access information and to act on that information.
I think right now it’s a battle for the mindshare of developers and for the mindshare of customers, and right now iPhone and Android are winning that battle.
Steve Jobs
While the other smartphone players have been playing catch-up with Apple, both the projections and the actual figures are changing the picture dramatically. The battle right now is between Google (Android) and Apple (iOS).
Source: Gartner
*On 11 February 2011, Nokia announced that it would migrate from Symbian to Windows Phone 7. Nokia CEO Stephen Elop announced Nokia's first Windows phones at Nokia World 2011: the Lumia 800 and Lumia 710. These phones were launched on 14 November 2011.
Android increased its market share in the second quarter of 2011 to 43.4% while Apple increased its share to 18.2%. This gave these two players dominance in the smartphone market, with a combined market share of nearly 62% – nearly double their market share of just over 31% in the corresponding period of 2010.
In the first quarter of 2012, according to research by Gartner, global mobile sales (including both cell phones and smartphones) fell 2% from the same time in 2011. It is interesting to note, however, that smartphone sales continued to grow – sales of 144.4 million units in the first quarter of 2012 were up 44.7% from the previous year. Android is now the market leader with a 56% market share, with Apple in second place with 22.9% (an increase from 16.9% in 2011).7
Samsung is now leading the charge of the Androids, while former high-flying mobile phone makers Nokia, Blackberry and HTC, are struggling, seeing sharp falls in their market shares over the last 12 months.
Both Nokia and HTC are expected to release smartphones that will run on Microsoft’s new Windows Phone 8. Samsung, despite its success with Android, has also launched some new models that run on Microsoft Windows 8. All these companies seem to be hedging their bets between Android and Microsoft.
In the overall mobile market in 2012, Samsung toppled Nokia from the No.1 spot it had held since 1998. Samsung also overtook Apple in the smartphone market, selling 38 million smartphones worldwide (more than 40% of Android-based smartphones worldwide). Android as a whole accounted for more than half of all smartphone sales (56.1%) in the first quarter of 2012.8
Apples sales were up 96.2% over the year, allowing it to more than double its share of the market. Sales in China were particularly strong. With more than 5 million units, China is now the second largest market for Apple after the US.9
The key players in the smartphone market are now Android (with Samsung dominant) and iOS. The players who are losing out – Nokia and BlackBerry – dominated the mobile market until the rise of the smartphone in 2008.
BlackBerry struggles in smartphone market
Blackberry’s smartphone market share continues to fall. Ben Grubb reported in the SMH on 7 May 201210 that its maker, Research in Motion (RIM), is launching a new BlackBerry 10 platform later in 2012, running on an entirely new operating system, BB10.
RIM CEO Thorsten Heins shows off a prototype device running the company’s BlackBerry 10 software at BlackBerry World conference in Orlando, Florida, April 2012. Photo: Bloomberg
One of the key questions is whether app developers will support the new platform. A survey in March 2012 from Appcelerator and IDC found that less than 16% of developers are ‘very interested’ in creating programs for RIM devices, compared with 90% for Apple and 80% for Android.
One Australian app developer, Paul Haenel (Tiger Spike), was optimistic about RIM’s chances of succeeding in the Australian market with the new BlackBerry 10 platform. He said:
... I think they can come back because the trend I have seen in the mobile space in Australia is that it’s turning into Android because people want something different than anybody else. iOS is dominating, yes, but the trend is sort of moving to something else and I think BlackBerry 10 will definitely play a big role in that.11
Others are not so optimistic about RIM’s chances. According to IDC market analyst Aman Bajaj, RIM had dropped to around 5% of the Australian smartphone market in 2011. Nick Dillon, from the device and platform research firm Ovum, believes that RIM will need to secure the Top 1,000 apps available on other platforms like iOS and Android if they are going to succeed.
Ben Grubb reached the following conclusion:
Whether or not RIM’s BlackBerry 10 platform can secure these top apps is difficult to predict. Smartphones based on it later this year may have the best operating system going around, but if there are no familiar apps on them, RIM will have a difficult time convincing people to buy one.12
RIM announced at their annual BlackBerry World conference in Orlando, Florida, in April 2012, that it will be guaranteeing developers of certified apps $10,000 in sales in an app’s first year to encourage them to write apps for its new platform.
While Android is tipped to have nearly 50% of the smartphone market by 2012, Apple has most of the apps and is the only company to date that has provided a solid sales outlet for app developers. According to Business Insider, The Future of Mobile, developers still have a preference for iOS.
Balanced against this are figures that show that the app potential of non-iOS smartphones is growing while the Apple App Store is losing app market share. Why? Because Android apps run on a variety of devices while Apple apps are only for Apple devices.
Research released in June 2012 by IDG Connect13 shows that tablets are increasingly being used by corporate professionals. 71% of the 3,000+ IT and business professionals responding to the survey said they already own a tablet, with roughly 3 in 5 using it daily for work.
This trend appears likely to continue, with 80% of the IDG Connect survey respondents who do not own a tablet intending to buy one in the next year. Of these, 44% expect to purchase an Android tablet, against 27% preferring an iPad.
If these intentions hold true, it will mark a shift from current ownership trends. 51% of the respondents who currently own a tablet have an iPad, while 38% own an Android tablet.
This preference for Android tablets among first-time buyers holds true across all geographic regions. The largest percentage point disparities are in South America (50% Android vs. 21.7% iPad), Europe (49.3% Android vs. 22.7% iPad), and Africa (43.6% Android vs. 20.5% iPad), while in North America first-time buyer preferences are relatively on a par, with 30.1% expecting to buy an Android, against 29.1% expecting to choose an iPad.14
Despite this, as the following diagram shows, Android still has a long way to go to catch up with Apple.
Apple and Google are battling it out in the arenas of smartphones, tablets and cloud computing, and are also trying to attract the best software developers. Their strategies are different.
Apple keeps a tight control on its App Store and the apps integrate seamlessly with the hardware.
Google is taking an open system approach of creating software that runs on a variety of smartphones and tablets. This has allowed Android to capture the market lead in smartphones (although Apple’s profit margins remain superior). Android is also offering several hardware rivals to Apple with Samsung’s Android-driven Galaxy SIII comparing favourably to the iPhone, and Amazon’s Kindle Fire challenging the iPad.
The following diagram demonstrates the importance of the iPhone and the iPad to Apple:
On 12 June 2012, Apple’s CEO, Tim Cook, who took over from Steve Jobs late in August 2011, unveiled Apple’s updated mobile operating software – iOS6 – to help keep Google, and its fast-growing Android mobile platform, at bay.
Apple CEO Tim Cook at the Worldwide Developers’ Conference, June 2012