Secret to Riches in Mobile app boom: Go Sell Shovels
Mobile App Growth Story
Though mobile apps have been there ever since the inception of Mobile phones in the market’s its the Smart Phones and Mobile App Stores have made them take the world by the storm. Especially the iPhone app store is the one that has radically changed the mobile app store paradigm and simplified the distribution of the mobile apps, it has simplified the distribution so much that it took only 9 months after it’s launch to reach 1 billion downloads.
According to a study conducted by GetJar and Chetan Sharma Consulting , The overall mobile apps downloads are expected to increase from over 7 billion in 2009 to almost 50 billion by 2012 growing at the rate of 92% CAGR. The revenue from mobile apps which includes both paid downloads and revenue from advertising and virtual goods is expected to increase from $4.1 billion in 2009 to $17.5 billion by 2012 at the rate of 62% CAGR. Though ondeck (operator managed) mobile apps sales exceeded those from offdeck in 2009, by 2012, offdeck is expected to hold the lion share of the mobile apps revenue.
Mobile app Developer Revenues
Though Mobile app revenues are sky rocketing, what is not is the average app Developer revenues. While you can choose between the business models of being a paid app or a free app, free app’s can also generate money through in-app ad’s and it is only the applications that are in top 100 downloaded in App stores that are generating significant revenues to their developers.
Selling tools to Mobile app developers
Now if you are not one of those companies like OpenTable who is not generating money by selling apps or through mobile ad’s and you are trying to dig for the riches in the Mobile app boom, I suggest you to go sell shovels.
Mobile app boom is like a Gold rush and history has been evident that the one who makes the most in a Gold rush is the one who sells shovels ,in Real estate boom it was the infrastructure suppliers , in the Internet boom it was the domain name registrars selling domain names, and in Mobile app boom the one’s who are going to get real rich are the ones who will sell the tools and infrastructure to app developers.
We already have an evidence of that happening, Companies selling Ad’s , infrastructure , providing delivery platforms are already getting pretty rich, couple of examples of the same are:
Admob : a mobile advertising platform, very popular on iPhone was acquired by Google for $750 million
Heroku : a Platform as a service company running on Amazon’s infrastructure is riding high on Mobile app boom, with over 83,000 apps running on it’s service with increasingly more of it’s existing clients adding mobile apps and more mobile developers opting for the service.
iPhone App store : While Apple has stated that it does not expect to profit from the store, it has been predicted by Piper Jaffray that the App Store could create a profitable marketplace with revenue exceeding US$1 billion annually for the company.
Nice post. App Industry is a gold mine.
Thanks dahiya, it is indeed !