Full Steam Ahead for the Apps Economy
Tech Sheets - The High Tech Blog
Posted by Eric Openshaw on June 27, 2012
Not so long ago, the “app economy” was easy to dismiss as a passing fad. How times have changed. Now a significant driver of value generation in the Open Mobile era, the development and proliferation of mobile software applications, or simply “apps,” has rapidly blossomed into a multi-million dollar industry of its own. And with analysts predicting the market to be worth in excess of $2 billion by the end of this year, it’s clear that apps are doing more than pocket-padding in Silicon Valley; they’re fueling hypercompetition and separating winners from losers across all Technology, Media, and Telecom (TMT) sectors and beyond into adjacent verticals such as healthcare and energy.
Recent insight from Deloitte’s 2012 Open Mobile survey identifies the rise of the mobile app store, the hunt for app developer mindshare, and the expansion of mobile brand strategies into most facets of corporate marketing as the key issues for app-based growth. Agile incumbents and new entrants alike are leveraging each of these elements to sustain competitiveness, but certain challenges remain to navigate a sustainable revenue path. To begin with, the choice of platform can impact innovation potential. App development supported by open platforms can benefit from increased innovation and provide an easier route to revenue for many new entrants and incumbents. One only has to look at the impact Google’s open-source Android platform and app store has had in the developer community where it is viewed as a long-term winner in consumer markets. Deloitte’s survey respondents tend to agree—85 percent believe an open, rather than closed, platform is more likely to dominate mobile in the next three years. Of course, that’s not to say a closed platform can be any less effective. Who would argue Apple, the dominant force in the apps economy, has ever been held back by their tightly controlled iOS platform? The company that more or less single-handedly defined the category has more than 600,000 apps now available in its apps store.
Those looking to emulate need to think carefully about platform strategy when trying to attract the right app developers to collaborate and secure the coveted “developer mindshare”. Understanding where the revenue will likely reside is also critical if using apps as a brand amplifier. Questions about customer reach and market penetration that developers face when deciding between platforms will apply equally to those planning for higher level growth. In this regard, Deloitte’s respondents think gaming, social media, and entertainment will be the most lucrative app categories in the short-term. For enterprise apps, customer relationship management (CRM) and productivity hold the most potential value.
The Deloitte 2012 Open Mobile study can be downloaded at: www.deloitte.com/us/openmobile.
|Eric Openshaw is a principal in Deloitte Consulting and the U.S. Technology, Media and Telecommunications (TMT) Industry Leader. He has over 30 years of experience helping companies in the TMT space.|
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