AppNation market analysis

 April 27, 2011, AppNation, San Francisco—Jonathan Carson from The Nielson Company presented some numbers about the app platforms. The biggest driver for the move to apps is the growth of the various platforms for their use.

Starting with smart phones, this platform is growing rapidly and is expected to become the majority platform for mobile communications and data access in the near future. The greatest driver for the platforms is the availability of apps. Android is the leader with about 37 percent market share, followed by iOS at 27 percent and Blackberry at 22 percent. A shift is coming with the advent of Win7 platforms that will bridge the gap between phones and computers. Despite the lower numbers, Apple is still an important player.

The concentration in Android and iOS platforms is seen in the downloads. Together, these platforms get over 74 percent of all downloads. They have simple activation and users can access and use many more apps than RIM, which is still focused on messaging rather than business-level apps. The IT- and enterprise-level of connectivity for the RIM devices means that there are fewer apps and less chance to use the ones that are available.

Win7 will be on some of the leading edge platforms in the near future. By not being the first one into apps, they have learned that users are happy with apps stores and the apps experience. The ability for users to discover new and interesting apps and to use simple payment options increases the their satisfaction.

Apps are becoming ubiquitous. All platforms have the same reach and many apps now are available for any platform. In general, the big web properties dominate their space, with one major leader in each of the many categories. Most of the web properties are Web 2.0-types and some leaders in selected categories are Facebook, Weather Channel, Google Maps, Google Search, and Pandora. The leaders are from the Web and there is little transition from the legacy media.

The driver for apps is discovery. Discovery is a challenge for most companies because few have known brands. In fact, the number of ways for people to discover a new app is actually decreasing. Most apps are now consolidated into apps stores, which also offer ratings and reviews. The word of mouth dispersal of information is decisive and useful for many consumers.

The economics of apps is stabilizing. Users are willing to pay for content and ads are ok if the user gets something in return. But just getting ads with no added value is disliked by over 90 percent of users. This behavior is the opposite of the use models for PCs. Privacy concerns are growing to over 50 percent of user now aware of and questioning privacy policies.

“Conversion” is the economic driver for apps. Just as Shazam users evolved into iTunes users, apps are becoming task oriented. The users are moving through a progression of greater involvement that leads to eventually spending more money. The converted believer is the greatest advocate for any new app.