The advent of mobile apps has revolutionised the way we use cell phones. Now days for every single thing, we have got apps.According to a survey, Mobile apps are on a path to reach $70 billion in annual revenue by 2017 with games drive the majority of app revenue now. Moreover,Mobile app mergers and acquisitions accounted for a record $35 billion in the last 12 months, not including Face book’s $16 billion acquisition of WhatsApp. In the first quarter of 2014, mobile app M&A was $7 billion, or twice the number from a year ago.
Moreover, free apps with in-app purchases account for more than ninety percent of revenue, but that’s not the case in all app categories. In-app purchases have worked most effectively for monetizing games, accounting for forty percent of downloads and more than seventy percent of revenues. But in-app purchases are less effective outside of games, accounting for more than fifty five percent of downloads and only 26 percent of revenue for non-game apps.
Besides, Mobile app public and private valuations have also varied significantly across categories, with some app types valued much higher than others relative to their economic performance. For investors and acquirers, it appears that not all apps are created equal.
Seeing the current scenario or the future, we can assess that the market is only going to get bigger. If we consider the causes, there are various reasons why social apps are becoming so popular and will continue to be so. The reasons are mentioned below:-
1. Manifoldness of possibilities: Smartphones are small computers which are becoming more and more powerful. They will be suitable for an increasing number of tasks which have previously been restricted to laptops or desktops. Today apps are used by companies to promote their brand or product, or to provide access to their existing products. In the future we will see a lot more use-cases, e.g. new products enabled by apps, mobile health, mobile selling, or apps which help to improve working efficiency within a company.
2. Ubiquity of smart phones: Smartphones will gradually replace feature phones in stores. Nearly everyone will be able to use smart phone apps, not just – as of now – business people, social networkers and gamers. The main driver will be a reduction in handset prices, which will come down to most starter devices.
3. Unmatched user-experience: Apps offer a user-experience which mobile Websites or widgets are unable to provide.
4. Ubiquity of app stores: For the foreseeable future, Smartphones will always depend on the app store. If you have a smartphone or advanced feature phone, you will have easy and convenient access to the world of apps.
5. Better visibility: Although there is a lot of clamour about the discoverability of apps, especially in the Apple App Store, standing out among 140,000 apps is much easier than being found amongst millions of websites. In addition, these distribution platforms are stores, and unlike the web or its search engines, they are designed to sell and present products. Cross-selling and promotions are components of their core features. The new generation of app stores make it easier than ever before to be in the forefront of millions of potential customers’ minds.
6. Proximity to customers: Mobile devices, especially Smartphones, are much more personal and intimate devices than a laptop or desktop device. For most users, their phones are never further than 1 meter away 24/7. Imagine how attractive it is for consumer goods, food, and myriad other companies across the economy to be able to place their products and services so close to consumers.
Although there is still a long way to go before many companies learn how to gain from and how to slot in this exciting new market, but it won’t take long before it becomes benchmark for business practice, especially for media, consumer goods, automotive, and food companies to communicate with their customers via an app. This applies especially to the Western and Asian countries with high smart phone shipment rates but will also impact emerging markets with a short time-delay.
(Mr. C.P.Singh is the founder of Smart group and is passionate about technology. He is a serial entrepreneur who has successfully founded a new venture under the name of “Smart Group”)