of Mobile App Economy
of the ‘Indian app economy’ can be traced down back to the launch of the iPhone
in year 2007 followed by the App Store
in year 2008. Since then, the international market for apps has been rapidly growing
at unprecedented rates. Analysts estimate app downloads have increased from $
31.2 billion in 2012 to $ 106.5 billion in 2014. This number is expected to
rise up to $ 415 billion by 2018.
App Store was one of the first commercially successful and widely accepted
digital distribution platforms since it challenged the monopoly of the ‘walled
garden’ through which mobile operators are able to control content. Mobile
operators forced consumers to interface with their network for access to apps
and other value added services that were delivered via an operator’s network. Therefore,
operators were considered as the gatekeepers, and content providers paid
disproportionate amounts to operators to feature their applications.
Competition triggered by technological innovations and advancements such as the
development of Wi-FI enabled smartphones and the
emergence of exclusive online stores allowed bypass of an operators’ network.
This had weakened their grip on the app ecosystem. These developments encouraged
the shift from a telecom-operator controlled network to Wi-Fi as a source of content
delivery. This marked the inflexion point for the app revolution!!
On its part, Apple permitted any software/app developer
from the public domain to design apps for the App Store and offered a flat 70
percent of the total revenue to developers. On contrary, telecom operators had adopted
a 30:70 revenue share model in their favour. In year 2011, Vodafone offered
higher revenue shares to developers to popularise apps. Content thus became
more easily and compfortably discoverable and the App Store represented a
one-stop-shop which interfaced between many developers and consumers.
model of having one platform to disseminate and facilitate the payment of apps
has been so successful that Apple’s competitors which include Google, Nokia,
Research in Motion and Microsoft launched their own app stores. Other aggregators
such as Vserv provide app developers with fresh avenues for monetization.
encouraged advance a paradigm in which mobile devices evolved from being simply
tools for text and voice communication to pocket personal multi-media gadget.
As consumers wished to do more with their mobile devices, the ample supply of
apps kept pace with the increasing and diverse demand. There are apps now that
help users learn new languages, read music, navigate cities, share files, read
the news, learn food recipes, and record important health-related and beauty
tips information among many other things. The proliferation of apps across many
verticals and functions underlines why this sector is regarded as an ‘economy’
in itself. It is also indicative of the high degree of competition that exists
amongst developers. It also demonstrates the shift in value from handsets to
apps, as users place more value on mobile software than hardware now.