How To Understand The App Economy

Transcription

1 Developer Segmentation Q3 2014: report sample

2 About VisionMobile VisionMobile TM is an analyst firm helping companies leverage and measure mobile ecosystems. We help telcos, handset makers and companies outside the mobile industry to create a competitive advantage using ecosystem strategies. Our mantra: distilling market noise into market sense. VisionMobile Ltd. 90 Long Acre, Covent Garden, London WC2E 9RZ Follow us on bout the authors Also by VisionMobile Find out more visionmobile.com/reports Terms of re-use of the report 1. License Grant Single User. Subject to the terms and conditions of this License, VisionMobile hereby grants you, the named user, a non-exclusive, nontransferable license to the Report. You may not distribute the Report within your organisation, publicly, or to any other organisation or third party, or to any or publicly accessible internet resource (such as Dropbox or Slideshare). Additionally, this License does not provide any right to you to sub-license the Report to other parties. App Economy Forecasts License Grant Multi User. Subject to the terms and conditions of this License, VisionMobile hereby grants you, a maximum of 5 named users, a non-exclusive, non- transferable license to the Report. You may not distribute the Report within your organisation, publicly, or to any other organisation or third party, or to any or publicly accessible internet resource (such as Dropbox or Slideshare). Additionally, this License does not provide any right to you to sub-license the Report to other parties. 3. License Grant Enterprise. Subject to the terms and conditions of this License, VisionMobile hereby grants you an organisational non-exclusive, non-transferable license to distribute the report within your organisation and to any fully owned Affiliate organisations. You may not distribute the Report publicly, or to any other organisation or third party, or to any or publicly accessible internet resource (such as Dropbox or Slideshare). Additionally, this License does not provide any right to you to sub-license the Report to other parties. 4. Representations, Warranties and Disclaimer VisionMobile believes the statements contained in this publication to be based upon information that we consider reliable, but we do not represent that it is accurate or complete and it should not be relied upon as such. Opinions expressed are current opinions as of the date appearing on this publication only and the information, including the opinions contained herein, are subject to change without notice. Use of this publication by any third party for whatever purpose should not and does not absolve such third party from using due diligence in verifying the publication s contents. VisionMobile disclaims all implied warranties, including, without limitation, warranties of merchantability or fitness for a particular purpose. App Profits and Costs Limitation on Liability. VisionMobile, its affiliates and representatives shall have no liability for any direct, incidental, special, or consequential damages or lost profits, if any, suffered by any third party as a result of decisions made, or not made, or actions taken, or not taken, based on this publication. 6. Termination. This License and the rights granted hereunder will terminate automatically upon any breach by you of the terms of this License. Copyright VisionMobile 2013 v.0.3 North American App Developer Trends

3 About the authors You can reach Christina Christina Voskoglou Data & Operations Manager Christina is responsible for all VisionMobile data projects. Among other things, she leads data analysis, survey design and methodology for VisionMobile s Developer Economics research series and is also behind VisionMobile s developer segmentation research. Prior to joining VisionMobile, Christina served as Customer Relationship Manager for the Household Lending Unit of EFG Eurobank Ergasias. She has more than 15 years of experience in BI design, statistical consulting and data mining. Christina holds an MSc in Statistics from the London School of Economics (LSE) and a BSc in Economics & Statistics from the University of Bath. Alex Veritsis Data Analyst You can reach Alex at: As VisionMobile's data analyst, Alex dives head-first in all VisionMobile datasets to unearth meaningful associations and trends in the app economy. Alex explores correlations and creates visualizations of the Developer Economics survey data and participates in all VisionMobile data-driven projects. Prior to joining VisionMobile Alex served as a financial analyst in the Small Domestic Appliances sector. He holds an MSc in Business and Financial Economics and a BA in Economics from the University of Greenwich. Andreas Constantinou Founder & Principal Analyst You can reach Andreas at: Andreas oversees the growth and strategy at VisionMobile. He has been working on the mobile industry since 2000, helping take the very first smartphones to market. Since then he s worked with the top brand names in the mobile industry including Microsoft, Intel, Mozilla, Amazon, AT&T, Telefonica, Nokia and Huawei. Over the past eight years, Andreas has grown VisionMobile into the leading analyst firm in the app economy and digital business models, with a client base and reputation that out-rivals companies many times the size. 2

4 Table of contents (full report) Research methodology Chapter 1 - How developer motivations drive the app economy Why developers matter The eight developer segments Segment sizes Chapter 2 - How segments compare How do you measure success? Segment preferences over platforms, tools, app categories and revenue models Money-first segments not looking beyond the duopoly Hunters, Guns For Hire and Digital Content Publishers the most advanced in tool usage How segments mix and match app categories The most lucrative business models yet to be adopted by the large segments Chapter 3 - Where to reach and how to influence developers Where developers turn for guidance What matters when it comes to platform prioritization Chapter 4 - How developer segments have evolved in 12 months and where they are heading The adventurous journey through developer segments Is the consistency of the developer mix changing? Hunters of the old vs. Hunters of the new The evolved Hunters The next generation of Hunters New blood in the app economy East and South Asia will influence developer population trends The 2014 vintage of developers take cautious first steps in the app economy Chapter 5 - Segment profile scorecards (*Enterprise license only) 3

5 Index of Graphs: Geographical distribution of 10,000+ respondents Goals and motivations across eight developer segments The eight developer segments that make up the app economy The importance of direct app revenues in measuring success How developers define success Platform preferences per segment How third-party tool adoption varies across segments Which app categories segments focus on The different revenue models segments use when building games Business models adopted and the revenues they bring Where to catch developers attention How segments prioritize platforms Migrations of developers between segments in six months How evolved Hunters tip the scale of segment behaviour How Hunters now entering the app economy compare to pre-existing Hunters Key features of the new blood among mobile app developers 4

6 About the Developer Segmentation 2014 report Our Developer Segmentation 2014 report is based on our Developer Economics Q online developer survey, which reached an unprecedented 10,000+ respondents from 137 countries. We employ a proven segmentation methodology that examines the outcomes developers are trying to achieve when making decisions to adopt a specific technology or platform. It is based on the Jobs- to-be-done (JTBD) approach popularised by Harvard Professor Clayton Christensen, which advocates a causal segmentation model based on developer outcomes or jobs that developers hire a technology for. 5

7 Our outcome-based segmentation model explains the drivers behind developers decisions From the incumbent ecosystems as Apple and Google - to startups building the next disruptive marketplace, businesses realize that developers are their evangelists, resellers and their fastest route to gaining a competitive advantage. Understanding developers and attracting them with the right messaging is of paramount importance. Developers come in many shapes and sizes - you need to know who to address, what to tell them and where to find them. Segmentation is therefore the way forward. The vast majority of developer segmentation models are based on technology choices and demographics and ignore the drivers behind investment choices that developers make. As a result they often fail to produce actionable results. Instead, the fundamental differences in key attributes between our outcome-defined segments prove that our model is successful in identifying distinct developer clusters, each significantly different than the average of the others. Moreover, the persistence that these differences presented over a yearly period proves that our goal-based model is stable. 6

8 The eight developer segments that make up the app economy The self-improvement segments, Hobbyists and Explorers, make up more than a third (36%) of the developer population and - expectedly - generate only 14% of app revenues. Hobbyists are motivated solely by the fun and creativity involved in building an app, while the most important goal of Explorers is to gain knowledge and experience which will help them monetise future opportunities. The revenue-seeking segments, Hunters and Guns For Hire, make up 39% of the developer population and bring half (51%) the app revenues of the whole economy. Hunters are after direct app revenues via app sales and inapp purchases. Guns For Hire are making money via commissioned work, engaging in app projects for customers instead of selling their own apps on app stores. Other than making money, both segments are motivated by building a viable app business. The four business-expanding segments, Product Extenders, Gold Seekers, Digital Content Publishers and Enterprise IT form the smallest of the three clusters with 25% of developers falling in one of these segments. Yet, their indirect app business brings about 35% of all app revenues - not counting the indirect earnings from their non-mobile business. Product Extenders are companies seeking to promote their non-mobile products through apps. Enterprise IT are the teams under the CIOs & IT managers, using centralised IT budgets and aiming to reduce operational costs and increase organisational efficiency by mobilising their IT infrastructure. Gold Seekers are startups that are aiming to hit VC gold, while Digital Content Publishers are using mobile apps to monetize digital content. 7

9 Hunters will be Hunters once they find the recipe for success For over 12 months now, and twice a year, we have been tracking developer segment trends through the largest developer research to date, across thousands of app developers. To analyse the developer migration from segment to segment, we studied our data across three consecutive 6- month windows. What we discovered is a stable pattern of migrations from segment to segment. Our analysis shows that Hunters are the most stable segment, more than half of them still being Hunters six months later. Being a Hunter is therefore more-often-than-not a terminal state where little further evolution occurs once a business recipe for comfortable profits has been established. Zooming in on Hunters, the segment driving app revenues in all ecosystems, we also considered their 12-month migrations - on top of 6- month ones. What we discovered is that in many cases Hunters rebound, reverting to Explorers, then returning to be Hunters again. These are Hunters who failed to make a living through selling apps, but only gave up temporarily - they found another means of income while exploring alternatives, then returned to the Hunter s state with a fresh - and hopefully better - business idea. 8

10 The new Explorers of the app economy It is not just migrations of existing developers from segment to segment that affect choices and behaviours, but also the attitudes of new immigrants to the app-developer nation. To get a 360-degree view of how the consistency of the developer population is changing we also compared the behaviour of all developers with less than 2 years of experience in mobile development (2014 Freshmen) both against those who have been part of the mobile app economy for more than 2 years (Veterans) and to those who were entering it a year ago (2013 Freshmen). In our Developer Segmentation 2014 we discuss the key characteristics of the new blood of mobile developers and how they are likely to affect future trends. Explorers play a key role in any ecosystem as they act as the junction between all segments - It is while at the Explorer s state that developers decide how to evolve into a new state altogether or how to reconsider their business strategy. Our analysis shows that the profile of Explorers now entering the app economy has changed vs. Explorers who begun their app-building exploration in 2013 or earlier. Different platform, tool and app category preferences as well as the increased inflow of Explorers from Asia are likely to considerably influence developer choices and behaviour over the next years. 9

11 BU Y TH E FU LL REPO RT FO R MO RE DATA AND INSIGHTS 3Q 14MN 10

12 distilling market noise into market sense 11