Publications
Partners
THE apps market is now saturated, raising questions about whether users really need all of them to get on with their ultra-modern lives.
These days every mobile developer – even those working for big corporates and small to medium enterprises – constantly creates apps.
New apps that promise to do this and that are targeting South African users, but the question is who is actually downloading these apps and using their “great features”?
Empirical evidence suggests that this apps market is a bubble waiting to burst.
UK-based VisionMobile, a market analysis and strategy firm, says in its latest Developer Economics report that a “tiny fraction of developers are making most of the direct revenues from the app stores. Considering revenues from any source the picture is not much better.”
The firm estimates that there are 2.9 million mobile developers in the world, creating more than 2 million apps.
VisionMobile says: “It seems extremely unlikely the market can sustain anything like the current level of developers for many more years.”
But are these app developers making any money?
“The majority of app businesses are not sustainable at current revenue levels. 50% of iOS developers and 64% of Android developers are below the ‘app poverty line’ of $500 per app per month,” says the UK-based company in its report, which was based on a large-scale online developer survey and one-to-one interviews with mobile app developers.
This report included the responses from more than 10 000 developers based in 137 countries worldwide.
Clearly, the business of app developers is a tough one and only the best apps will make a profit.
South Africa has seen a fair share of apps developed locally.
However, local experts insist that apps have become the single most significant tool driving mobile economy in South Africa.
Tipping point reached
According to the Mobility 2014 research study, conducted by World Wide Worx with the backing of First National Bank, a tipping point in mobile app use was reached in 2013, with 51% of urban cellphone users using these tools.
South Africa’s rural market is also growing fast, with its 27% usage level surpassing the overall market of 18 months before.
The Mobility 2014 research study identifies both global social media and instant messaging apps such as WhatsApp, Facebook Chat and Twitter being used more by customers.
This indicates that unknown apps – whether developed locally or overseas – are not gaining much traction in the market.
It is also difficult to know how many people have downloaded apps that have been launched in South Africa in order to gauge their success or failure.
Disappearing into thin air
But a number of them are not really making any impact – soon after they are launched they disappear into thin air.
Explaining this phenomenon, VisionMobile says: “These apps are relatively successful as products, in that they’re clearly valuable to their customers, but very few of them would be considered a financial success against the alternatives available to their creators. Strugglers, poverty stricken and the have nothings (app developers) make up a staggering 88% of developers in total who look more like struggling artists than highly skilled engineers.”
While I believe that apps market is a bubble, I read somewhere that most book writers of either fiction or non-fiction are not making any money. It is argued that just a few best writers are getting good royalties - but that doesn’t stop bad writers from bringing new books to the market.
So, therefore the market will continue to have more developers churning out more apps that nobody is really interested in downloading, while the "haves” (top 12% of developers), according to VisionMobile, continue to make more money from their successful apps.
It seems the gold rush to develop apps is over and only developers with deep pockets will continue to provide better apps.
We are now entering a phase where winners and failures are about to be separated in the app market.
- Fin24
*Gugu Lourie is a former correspondent for Thomson Reuters, Business Report, Finweek magazine and Fin24 (writing a blog titled 'Googled'). He is the editor of techfinancials.co.za. Views expressed are his own. Follow him on #twitter @LourieGugu.
These days every mobile developer – even those working for big corporates and small to medium enterprises – constantly creates apps.
New apps that promise to do this and that are targeting South African users, but the question is who is actually downloading these apps and using their “great features”?
Empirical evidence suggests that this apps market is a bubble waiting to burst.
UK-based VisionMobile, a market analysis and strategy firm, says in its latest Developer Economics report that a “tiny fraction of developers are making most of the direct revenues from the app stores. Considering revenues from any source the picture is not much better.”
The firm estimates that there are 2.9 million mobile developers in the world, creating more than 2 million apps.
VisionMobile says: “It seems extremely unlikely the market can sustain anything like the current level of developers for many more years.”
But are these app developers making any money?
“The majority of app businesses are not sustainable at current revenue levels. 50% of iOS developers and 64% of Android developers are below the ‘app poverty line’ of $500 per app per month,” says the UK-based company in its report, which was based on a large-scale online developer survey and one-to-one interviews with mobile app developers.
This report included the responses from more than 10 000 developers based in 137 countries worldwide.
Clearly, the business of app developers is a tough one and only the best apps will make a profit.
South Africa has seen a fair share of apps developed locally.
However, local experts insist that apps have become the single most significant tool driving mobile economy in South Africa.
Tipping point reached
According to the Mobility 2014 research study, conducted by World Wide Worx with the backing of First National Bank, a tipping point in mobile app use was reached in 2013, with 51% of urban cellphone users using these tools.
South Africa’s rural market is also growing fast, with its 27% usage level surpassing the overall market of 18 months before.
The Mobility 2014 research study identifies both global social media and instant messaging apps such as WhatsApp, Facebook Chat and Twitter being used more by customers.
This indicates that unknown apps – whether developed locally or overseas – are not gaining much traction in the market.
It is also difficult to know how many people have downloaded apps that have been launched in South Africa in order to gauge their success or failure.
Disappearing into thin air
But a number of them are not really making any impact – soon after they are launched they disappear into thin air.
Explaining this phenomenon, VisionMobile says: “These apps are relatively successful as products, in that they’re clearly valuable to their customers, but very few of them would be considered a financial success against the alternatives available to their creators. Strugglers, poverty stricken and the have nothings (app developers) make up a staggering 88% of developers in total who look more like struggling artists than highly skilled engineers.”
While I believe that apps market is a bubble, I read somewhere that most book writers of either fiction or non-fiction are not making any money. It is argued that just a few best writers are getting good royalties - but that doesn’t stop bad writers from bringing new books to the market.
So, therefore the market will continue to have more developers churning out more apps that nobody is really interested in downloading, while the "haves” (top 12% of developers), according to VisionMobile, continue to make more money from their successful apps.
It seems the gold rush to develop apps is over and only developers with deep pockets will continue to provide better apps.
We are now entering a phase where winners and failures are about to be separated in the app market.
- Fin24
*Gugu Lourie is a former correspondent for Thomson Reuters, Business Report, Finweek magazine and Fin24 (writing a blog titled 'Googled'). He is the editor of techfinancials.co.za. Views expressed are his own. Follow him on #twitter @LourieGugu.
