mLab

Southern Africa 9 February 2012

Ben Zaaiman

mLab’s Purpose

The mLab encourages and supports mobile innovators & entrepreneurs to grow their ideas to full impact.

The mLab advocates for and supports the use of the mobile channel in service delivery.

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mLab’s Doors Have Been Open

Since August 2011

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Mobile Has Become the Dominant

ICT Client

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The Economist – 8 Oct 2011

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7

(Smartphone Sales in the U.S.)

Nokia & Samsung Ship the Bulk of

Phones in the World

Nokia 26%

Samsung 21%

Apple 6%

LG 5%

Other 42%

Global Shipments Q4 2011

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Research & Markets – Jan 2012

Global Revenue is Split Between

Apple, Samsung, Nokia

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Apple Takes 75% of Global Profit

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Why?

Multisided Markets Drive

Monetisation Strategy

You

Users

Advert-isers

Deve-lopers

Data Miners

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Facebook Didn’t Make Billions

Charging Users

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0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

40.0%

45.0%

50.0%

Q3:0

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Q4:0

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Q1:0

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Q2:0

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Q3:0

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Q4:0

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Q1:0

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Q2:0

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Q3:0

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Q4:0

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Q1:0

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Q2:0

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Q3:0

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Q4:0

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Q1:1

0

Q2:1

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Q3:1

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Q4:1

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Q1:1

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Q2:1

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Q3:1

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U.S. Share of Time Spent on Platform Sites

AOL Microsoft Yahoo! Google Facebook

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Somebody is Going

to Make BIG Money

in This Industry...

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Enterprise Solutions

Consumer Apps

Mobile Marketing

Consumer Services

Contracting Proprietary

Products

Services

The Start-Up Pyramid

Scale

Optimize

Economics

Promise

Product / Market Fit

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Monetisation

Strategy

40% of Big Market

Minimum Viable Product

for “Must-Haves”

Source: Marc Andreessen

mLab Mobile App Monetisation

Framework

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Number of Apps in iTunes Store (April 2011 - 30 Months after Start)

0

50 000

100 000

150 000

200 000

250 000

300 000

350 000

iPhone iPad

Free

Paid

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Ben Lorica: O’Reilly Research, 2011

Games Dominate the Industry

0%

10%

20%

30%

40%

50%

60%

Top 100 Top 1 000 Top 10 000

% Games in All-Time Rankings of iTunes Store

iPhone

iPad

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Ben Lorica: O’Reilly Research, 2011

Sturgeon’s Law Also Applies to the

iTunes Store

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But You Should Find Out Pretty

Quickly if You Have a Hit

Top Paid Top Grossing Top Free

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9

4 5

4

14

Median Days From Launch to Hit Top 200 Lists

iPhone iPad

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Ben Lorica: O’Reilly Research, 2011

And Not Many are Long-Term Hits

Top Paid Top Grossing Top Free

24% 24%

16%

21%

24%

14%

Hits That Spend 30+ Days on Top 200 Lists

iPhone iPad

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Ben Lorica: O’Reilly Research, 2011

Price Range Explanation

25

price

Nu

mb

er

of

Ap

ps

25% Cheapest 25% Most Expensive Middle 50%

2 12

Media

n

3

Price Ranges for successful iPhone

Apps in Each Category

0 1 2 3 4 5 6 7 8 9

10

(Range Bars Exclude 25% Cheapest & 25% Most Expensive Apps)

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Ben Lorica: O’Reilly Research, 2011

Price Ranges for successful iPad

Apps in Each Category

0 1 2 3 4 5 6 7 8 9

10

(Range Bars Exclude 25% Cheapest & 25% Most Expensive Apps)

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Ben Lorica: O’Reilly Research, 2011

Consolidate Free and Paid Apps

Through In-App Purchases

Virtual goods / freemium / subscriptions

Freemium model, e.g. allowing the user to unlock premium features from within the app

Key benefits of this: ◦ Demo to pay engagement model;

◦ Develop a single app;

◦ Market a single app (climb up charts with single app).

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Free Apps Are Well-Represented

Among Top-Grossing Lists

Top 200 Grossing

News Games Social Networking

15%

8%

25%

10%

14%

36%

16%

21%

% of Free Apps in Top-Grossing Category

iPhone iPad

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Ben Lorica: O’Reilly Research, 2011

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Join Us!

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Ben Zaaiman

www.mlab.co.za

ben@mlab.co.za

+27 83 448 4336

BZaaiman