Russian version of Developer Economics 2013

From the publishers: Colleagues, we present to you the Russian edition of the excellent study Developer Economics 2013. We have prepared a Russian translation of this study and hope that it will be useful to you in your work. Thanks!

Developer Economics 2013 is the fourth study of development economics. This report focuses on developer tools, explores six sectors: ad networks and intermediary platforms, backend-as-a-service, cross-platform tools, cross-promotional networks, user analytics and voice services.

We also took a closer look at issues critical for developers, such as the most popular platforms, HTML5 features and challenges, cross-screen development, profit models, monetization potential, and much more. The data in this report is based on an online survey of over 3,400 developers and 20 interviews undertaken in October 2012. Our sample is truly worldwide, with a balanced representation of North America, Europe and Asia, as well as a significantly smaller number of developers from Africa, Oceania and Latin America.

We hope that this report will give you an insight into the latest trends in mobile development and an understanding of the rules of the new application economy emerging around applications and ecosystems. We hope that you will enjoy reading it - the same as we got from writing it!

Key Facts

All of the above is based on a recent VisionMobile survey of 3460 developers in 95 countries, balanced by North America, Europe and Asia, supplemented by interviews with developers and their research.

Duopoly mobile market

The mobile phone industry grew 23% year over year. Despite the troubles that surrounded many manufacturers of mobile devices, the industry is constantly growing, adding 23% in profit annually. At the heart of this growth, increasing smartphone sales, which now account for more than 40% of all phone sales, are fueled by low-cost Android devices that are quickly absorbing the market share of futures.

The game of the duopolis. 700 million smartphones sold in 2012 strengthened the Google / Apple duopoly in the world of mobile platforms, together receiving more than 80% of the attention of mobile developers. This is underlined by the duopoly of Samsung and Apple as manufacturers of phones, their total market share in smartphones reaches 46% and they receive 98% of the industry’s total profit among the 8 leading OEMs. Excluding Apple, the overall profit for the mobile phone industry is at the 2009 level, which means that Apple is reaping the entire added value of the app-based mobile computing industry, which it actually spawned.

At the same time, Samsung grabbed the remaining value, quickly turning from a futuresphone gatekeeper into a smartphone market leader, having weaned out the profit of the old guard in the face of Nokia, which slowly reacted to the changing basis of competition - from the best phones to the best applications.

Samsung's recipe arrived. As the number one manufacturer of phones in 2012, Samsung’s huge success with Android smartphones is based on three different elements: firstly, the ownership of the production of most expensive components, which gives the company both the earliest availability and the lowest prices. Secondly, the fastest time to market with new smartphones based on the latest versions of Android. Thirdly, the strong Galaxy brand and marketing campaigns that distinguish Samsung from the crowd of other Android manufacturers.

Tablets are still selling 3 times worse than personal computers, but they are projected to reach parity in the next year or two. This will be a critical inflection point for the dualopoly of personal computers represented by Intel and Microsoft, whose dominant positions in computing are seriously moved by the mobile market, where Android dominates as a platform, and ARM-based Qualcomm and Mediatek dominate in chipsets.

Platforms: haves and have-nots

Developers swarm around iOS / Android, but continue to look closely at viable alternatives. After gaining dominant positions in the consumer market, Android continues to occupy a leading position in the attention of developers, 72% of developers are now working on the platform, 4 percentage points more than in the 2012 study. iOS showed a decline of 5 points in the Mindshare index, which we mainly associate with the influence of Asian developers, showing their full commitment to Android. The attention of developers varies from region to region, Android leads in Asia and Europe, while North America shows platform parity. A significant portion of mobile developers intend to accept Windows Phone (47%) and BB10 (15%),

HTML is the main unifying technology for the Android-iOS duopoly. HTML is the third most popular choice among developers, 50% of which use HTML-based technologies as a platform for deployment (creating mobile web applications) or as a development platform (creating hybrid applications or HTML code translated into native applications). In general, HTML is much more successful as a technology, rather than a platform, led by Firefox OS (and WebOS before), which has become the main web-oriented attempt to create a complete alternative to iOS and Android, including native platform APIs and methods of distribution and monetization applications. HTML should not be seen as a competitor, but more as an addition to the original platforms, as something that smooths out the differences, reducing the entry and exit barriers of these platforms.

Windows Phone: buy and it will come. The attention of developers to Windows Phone with an indicator of 21% remained unchanged, despite the very high intentions of adoption in our previous study in 2012. It seems that the developers are expecting the right signal from the market - reaching a critical mass of devices - before starting to invest in the platform. Despite the difficulties with Windows Phone, Microsoft is positioning Windows 8 as a tablet platform, and thanks to a powerful strategy for updating Windows licenses, the company can change the market share figures in its favor.

The attention of developers to BlackBerry remains stable with 16%, developers expect the start of sales of BB10. Moreover, the Intentshare indicator, i.e. The developers’s plans for adopting BlackBerry did not fall from our last year’s poll, which shows the positive impact of all RIM propaganda ahead of the launch of BB10. Attention to Symbian, on the other hand, quickly and predictably dissolves, as in the case of Samsung Bada, and this despite the fact that sales of the platform are ahead of sales of Windows Phone in the 3rd quarter of 2012.

78% of developers use 2+ platforms at the same time, but the money is concentrated in iOS / Android. At the same time, the choice of platforms by developers is now reduced. On average, mobile developers use 2.6 mobile platforms, this survey showed, while in 2012 there were 2.7, and in the 2011 survey 3.2. 80% of the respondents in our sample develop for Android, iOS, or both platforms, which makes them the foundation in any set of platforms. Developers who do not develop for one of these platforms receive, on average, half of the income from those who develop, which leaves no doubt that all power is concentrated in these two main systems.

Most developers choose the first iOS platform. iOS is a clear winner in the shootout series against Android, for 42% of Apple / Google iOS developers it is a priority, against 31% for Android. The decision about a “leading platform” is influenced by several other factors, such as previous experience or local smartphone sales, but iOS is a clear winner over all other platforms at all competitive points, except for the price and learning curve.

iOS, Android, and BlackBerry are leading platforms. In our survey of 3460 developers, iOS turned out to be the highest priority platform, 48% of iOS developers use it as a leading platform. iOS, Android and BlackBerry are leading platforms, that is, they are most often used as the main among their developers. Windows Phone and HTML are expanding platforms, as they are most often used by developers to extend the action of their application to those user segments or regions that are not covered by their main platform. At the tail of developers' preferences are Symbian, Qt, Flash and JavaME, which are now used simply to close the remaining market segments.

HTML5 needs the best native APIs and development environment. HTML5 is becoming a vital alternative to native development in categories such as “Business and Productivity” (used by 42% of HTML developers), Enterprise (32%) and Media (28%). In order to compete with native development, HTML5 needs better access to native APIs (35% of HTML developers), a better development environment (34%) and a better debugging system (22%). More importantly, even optimized HTML5 devices are not as important as access to their native programming interfaces or development environment. This leads us to the conclusion that supporters of HTML, such as Facebook, Mozilla and Google, should focus on cross-platform tools and development environment, at least invest in them as much as in supporting the platforms Facebook, Firefox OS and Chrome OS

The attention of developers to tablets remains on par with smartphones, but TV is lagging behind. The majority (86%) of 3460 developers in our survey focus on smartphones, most of them are also developing for tablets, here are iOS developers (76%) who point to the attractiveness of the iPad as a platform for development and monetization. Development for TV remains rare (6% of Android developers), since the hype around Smart TV is just in its infancy.

Princes and paupers

A steep earning curve on applications. Developers can improve a lot in planning their business on applications. 49% of the developers in our survey make applications that they want to use themselves, but ultimately receive less income. The most monetary strategy is one that extends the application vertically or geographically. To some extent, these strategies rely on an already established and successful business - applications that have already been tried and proven successful in at least one market are generally a less risky option or “low hanging fruit” for developers.

Advertising is the most popular revenue model for apps, and is used by 38% of developers in the world. At the same time, this monetization model shows the lowest revenue per app. In-app purchases and freemiums are growing, having increased by 50% compared to 2012, now more than a quarter of developers use them in our survey. In-app purchases are the second most popular revenue model for iOS, with 37% of developers using it, which is slightly less than paying for downloading.

Application development lacks consumer understanding. We find it remarkable that only 25% of the developers in our survey plan their applications based on a discussion with users, and this figure does not change with the developer's experience or professionalism. This shows that the bottleneck of the do-measure-learn cycle in development is just the “measurement” or understanding of your customers. This in turn emphasizes the need for smooth, two-way feedback channels between the developer and the consumer, such as those that GetSatisfaction opened for web applications and that HelpShift now opens for mobile applications.

Landscape tools

Now there are more than 500 tools for application developers, designers and entrepreneurs. Over the past 3 years, developers have evolved from coders to innovators, designers and creators - tidbits for hundreds of firms involved in the SDK economy, part of a large B2D (business to app developer) market. Developers' expectations related to tools and services have changed in recent years in the wake of emerging startups, from Appcelerator to Zong. Application developers now have a choice of more than 500 third-party tools (APIs, SDKs, components) that accompany their development adventures at every step. Development tools, from ad networks to user analytics SDKs, are the core economics of the Android and iOS platforms, and the main differentiator for them.

Advertising services dominate, the rest of the tools are fragmented. 90% of approximately 3460 developers in our survey use at least one third-party tool or service, the average number is 1.47 tools at a time. Among the most popular services for developers are advertising services and exchanges (34% of developers), which reflects the popularity of advertising as the main business model. Advertising is not only the most popular earning model, but can also serve as a promotion channel that facilitates the opening of the application. User analytics (28%) and cross-platform tools (27%) follow it, with a long tail of failure statistics, BaaS, cross promotional networks and voice services.

Google AdMob is clearly the dominant advertising platform, with 65% of developers using advertising services. AdMob recently also became an ad exchange, which was aimed at neutralizing the threat that ad exchanges posed to Google’s positions. Second in this race, with 12% each, are Inneractive, an ad exchange / intermediary, and InMobi, an ad network grown in India and becoming an important player in growing markets. In general, Apple iAd is in fourth place with 11%, but despite its popularity among iOS developers, AdMob remains the leading advertising service on iOS, it is used by 66% of the iOS developers we surveyed.

PhoneGap and Appcelerator most of all occupy the attention of developers among more than 100 cross-platform tools. PhoneGap leads the ranking of such tools, 34% of developers use it, followed by Appcelerator and Adobe Air with 21% and 19% of developers, respectively. With 100+ cross-platform tools, making a choice for developers can be a daunting task. Among the differentiating features for cross-platform tools are access to native APIs, performance optimization and the ability to reproduce a native interface for each platform.

The user analytics duopolism: Google (69%) and Flurry (49%) are far ahead of the competition. User analytics services are becoming increasingly important as a tool to optimize interactions with the application and reach, and serve as a proxy for user reviews. User analytics services are more important for iOS developers - in our study, 39% of iOS developers use them, compared to 28% for Android, 25% for WP, and 15% for BlackBerry. The use of analytics is an indicator of the level of competition among developers on different platforms.

Parse leads the way, occupying 28% of the minds of developers in Backendas-a-Service tools, but competition for the second place is heating up, as BaaS is gaining popularity. Mobile applications are becoming more complex and increasingly need back-end features such as user management, social features or data synchronization with the cloud. Parse is followed by CloudMine's enterprise focus (11%). Sencha.io and AC, both of which received 10% each among developers using BaaS, are solutions that integrate well with their respective frameworks (Sencha and Appcelerator), and therefore do not directly compete with services such as Parse or StackMob. The Backend-as-a-service market is at an early stage and there are more than 30 vendors on it,

TapJoy (53%) is a leader in cross-promotion networks, a survey of 3460 developers tells us, Flurry AppCircle (20%) and Chartboost (18%) follow it. Cross-promotion networks (CPN) are used by developers as a means of promoting their applications through the free exchange of traffic between applications, for advertising with payment for installation or, in some cases, to stimulate installation. CPNs are also used to generate revenue for publishers.

Voice API has not yet moved from the web to mobile. While voice services satisfy the diverse needs of users, the attention of developers to them is measured in one category, since voice interfaces are perceived by developers as a legacy of telephony, and they still have a long way to go with future voice applications. Voice leaders Twilio and Voxeo were very popular among web developers, Twilio even at the end of 2011 in the Top 10 API providers overtook Facebook, according to ProgrammableWeb. However, these voice services have yet to make a big impact on mobile applications. Skype (telephone URI) and Microsoft (voice recognition and transcription) are used more often, followed by Twilio and Tropo APIs with conferencing, incoming / outgoing calls and voice portals. Telecommunication companies,

The universe of developer tools is expanding and consolidating. The Business to Developer (B2D) market has been expanding all the time for the last three years in the wake of B2D startups trying to meet the ever-increasing demands of developers. For every 1000 startups with applications, there is 1 startup with a tool for developers. In parallel, there is consolidation in organic growth (for example, Flurry, Papaya grow organically) and through mergers and acquisitions (for example, Appcelerator acquired Aptana, Cocoafish, Particle Code and Nodeable, Apigee acquired Usergrid and Instaops, Burstly bought TestFlight, and Flurry bought Trestle).

The association will last until 2015, it will be led by mobile marketing and enterprises. We think that the trend in combining instruments will not weaken until 2015, i.e. it will be six years since the advent of the B2D application market, and the expansion will focus only on the not yet covered sectors of tools for developers in the field of post-launch. We expect that the two main clusters of the association for tools will be: firstly, marketing applications, since the bottleneck of the opening will only worsen with the increase in the number of applications from 1.5 to 10 million and the continued dominance of Apple and Google stores in the distribution of applications. Secondly, Enterprise Mobile Services, who earn on the needs of vendors in mobilizing their intranet networks and allowing employees to bring their own devices to work (BYOD). Unlike consumer applications, enterprises have substantial IT budgets and very stringent requirements for data security, identity management, back-end integration and support.

You can find the whole report in PDF on our website . Unfortunately, under the terms of our agreement with VisionMobile, we can not publish it outside of our site.

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