Making Money in the Android Ecosystem

Paul.Houghton@futurice.com

Fututrends 3

Mobile Market Analysis

Fututrends 4

2009: Android, 3.9% 2010: Android, 22.7%

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Making Money in the Android Ecosystem

•  Where? –  Android Market –  In-app Billing –  Alternative Markets

•  How? –  Android Advertising –  App Marketing –  Alternate Revenue Streams

•  Recommendations Making Money in the Android Ecosystem 6

Making Money in the Android Ecosystem

•  Where? –  Android Market –  In-app Billing –  Alternative Markets

•  How? –  Android Advertising –  App Marketing –  Alternate Revenue Streams

•  Recommendations Making Money in the Android Ecosystem 7

Android Market

•  34% paid apps –  (Apple: 66%) –  37% are $1 or less, vs. 61% last summer

•  6.2 apps per developer –  (Apple: 4.8)

•  32% of Apps are location-based •  7.5% access user contacts –  (Apple: 11%)

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DroidDream

•  Security nightmare – >50 repackaged apps raid private

security info to remote servers –  Google is “analyzing” –  Re-flash the phone –  READ the permissions which an application asks

for. Most users do not.

•  App makers should –  LIMIT permissions your app asks for

•  or increasingly smart users will not install it –  RESPOND to online discussion of your app

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•  If your app isn’t professional –  Low user ratings –  No users –  You wasted 100% of your money

In-app Billing

•  New •  Sell –  virtual stuff –  game levels –  extra services

•  70/30 like normal billing •  Subscription model coming

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Alternative Markets

•  Three types enter the gold rush –  Indies

•  Independent opportunists, mostly doomed to fail •  Some are worth working with until then

–  OEMs •  Preloaded store on one brand of phone •  Usually small, nice place to be

–  Operators •  Big markets, big money, big corruption ambition •  Important since sometimes these guys remove

Market from the phone, or block it as the network level

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Fututrends 19

GetJar

•  100m down/month •  200 countries •  Primary revenue is “Sponsored

Apps” section of website –  Advertise your app here if you have an

alternate revenue stream –  PPD: Pay Per Download

•  No premium apps –  “Coming”

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AppBrain

•  Alternate web interface for Android Market •  You might like the UI better, but… –  Only apps available in US show up –  AppBrain app must be installed on user’s phone

to initiate install

•  Normal Google Checkout •  Largely obsolete due to recent

Google Market web updates

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Appsfire

•  Alternate web interface for Market •  Good in-phone App –  Recommendations adapted based on installed

apps –  Discounted apps, popular lists, expert

recommendation lists, video previews

•  Normal Google Checkout •  Ad supported

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SlideME

•  Focus on promoting small, independent developers •  Web, or SAM app on to phone •  Own payment system •  For selling to users outside of

Google Market geographic reach

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Mobihand OnlyAndroid

•  Discounts and “Deal of the day” •  On-phone app also •  Normal web shop, credit card

checkout, accessorize in the same purchase

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Approov

•  New entrant •  Web interface only – Minimalistic aesthetic –  Includes Google Market search results

•  Free apps only •  Upload your free app here along

with a video

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Shop4apps

•  By Motorola •  Argentina, Brazil, China, Mexico •  Free, automated app testing •  In-app advertising for China

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•  Coming soon •  Windows Phone is a good

example of what to expect •  A nice, small place to promote

your app if you get placement

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•  AT&T uses Google Market •  AT&T cripples Android firmware –  Remove “Settings -> Applications -> Allow

install from unknown sources” –  So all 3rd party app stores are blocked

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•  Verizon V Cast Store •  Android 2.2+ •  Pre-approval required, like Apple –  Free

•  Same 70/30 split as elsewhere –  just no sharing the 30 with Google

•  Carrier billing only –  Premium is blocked on many company phones

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•  THE BEAST is coming •  Bundled with rest of Amazon –  ebooks –  books and gadgets

•  Great recommendation tech and loyal customer base

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•  Chinese markets –  36% are repackaged free apps from Market

•  25% of repackaged apps require MORE user permissions than the original application

–  2% pirated software (Apple: 85%) –  61% of apps are unique -> serve a local need

•  Russia and the east –  There is no culture of paying for software –  Piracy is the norm

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Beyond the western world

Android Advertising

•  AdMob SDK has 40% market share –  Bought by Google –  Normal 60/40 split

•  A few apps use multiple SDKs •  Include when

–  High number of page views/per day –  Cheap/young target audience –  “Me too” service

•  Avoid when –  You make money indirectly based on how many people

have your application

•  Buy when –  You make more/newuser than ads/newuser cost you

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Europe: Mobile Ad Revenues

•  Only 37% banners –  and Ad network keeps 40% -> 22%, maybe

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Real Time Bidding

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Alternate Revenue Streams

•  Flip burgers and play lotto •  Sell direct –  fremium –  online subscriptions –  associated service –  associated product

•  PPI •  Consult

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Recommendations

1.  Google Market + Checkout –  Sell it, if you are worth it, basic level must be free

•  Higher price, avoid “volume will make up for it” trap –  Ad-based if cheap users/high page count

•  Consider Mobclix as an alternative –  Best for most: alternate revenue off-market

2.  Marketing –  Blog, SPAM, promo video, spin off a TV show, address

book viral, anything to spread the word –  Premium apps- advertise in markets+web+apps!

•  Alternative revenue models, consider GetJar ads

3.  Be Global –  Design for localization, multi-resolution from day 1 –  Alternate markets later (repackager self defense)

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