The Economics of Apps

8/9/2019 The Economics of Apps

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The Economics of Apps

Volker Hirsch (@vhirsch)

Mobile 2.0 Europe - Barcelona - 17 June 2010


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Mobile Apps...

... can be a bit of a nightmarehttp://fraizochocolat.wordpress.com/2010/02/
http://fraizochocolat.wordpress.com/2010/02/http://fraizochocolat.wordpress.com/2010/02/http://fraizochocolat.wordpress.com/2010/02/


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You do everything right...


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... on the inside...

http://blogs.fayobserver.com/faytoz/files/2008/10/davinci_toothed_gears_original.jpg
http://blogs.fayobserver.com/faytoz/files/2008/10/davinci_toothed_gears_original.jpghttp://blogs.fayobserver.com/faytoz/files/2008/10/davinci_toothed_gears_original.jpghttp://blogs.fayobserver.com/faytoz/files/2008/10/davinci_toothed_gears_original.jpg


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... on the outside...

http://picasaweb.google.com/lh/photo/f-4eoJyuiitoJIPDaqrMJQ
http://picasaweb.google.com/lh/photo/f-4eoJyuiitoJIPDaqrMJQhttp://picasaweb.google.com/lh/photo/f-4eoJyuiitoJIPDaqrMJQhttp://picasaweb.google.com/lh/photo/f-4eoJyuiitoJIPDaqrMJQ


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... and on marketing

... and of course with Carriers

http://www.ruralmarketingservices.com/images/marketing_road_sign.jpg
http://www.ruralmarketingservices.com/images/marketing_road_sign.jpghttp://www.ruralmarketingservices.com/images/marketing_road_sign.jpghttp://www.ruralmarketingservices.com/images/marketing_road_sign.jpghttp://www.ruralmarketingservices.com/images/marketing_road_sign.jpg


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Something is stillmissing...

http://www.latest-wallpaper.info/free-money-wallpaper.htm
http://www.latest-wallpaper.info/free-money-wallpaper.htmhttp://www.latest-wallpaper.info/free-money-wallpaper.htmhttp://www.latest-wallpaper.info/free-money-wallpaper.htm


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The Discovery Dilemma

http://www.lanfaxlabs.com.au/images/all-detergents-3-IMGP3918.JPG
http://www.lanfaxlabs.com.au/images/all-detergents-3-IMGP3918.JPGhttp://www.lanfaxlabs.com.au/images/all-detergents-3-IMGP3918.JPG


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THe $ Dilemma (carrier model)

total revenue

after VAT

after carrier

after distributor

after porting & QA

after License

after production

after overheads


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THe $ Dilemma (carrier model)

2


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THe $ Dilemma (app store model)


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THe $ Dilemma (app store model)


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The Mobile Web then?


14/41http://gapingvoidgallery.com
http://gapingvoid.com/http://gapingvoid.com/http://gapingvoid.com/


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And again: loads of them...


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What is Social?


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Social refers to theinteraction of organismswith other organisms and

to their collective co-existence[...]

Source: Wikipedia


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http://commons.wikimedia.org/wiki/File:Bhgs_crowd.jpghttp://commons.wikimedia.org/wiki/File:Bhgs_crowd.jpghttp://commons.wikimedia.org/wiki/File:Bhgs_crowd.jpg


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And so what ???


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1,700,000,000

4,600,000,000

1,800,000,000

2,250,000,000

Internet users (PC, Mobile, Web Cafe)

unique credit card holders

tooth brushes in use

mobile phone subscriptions

475,000,000circulation of newspapers

825,000,000

registered cars

4,000,000,000FM Radios

various sourceshttp://upload.wikimedia.org/wikipedia/commons/8/85/Numbers_grid_in_NY.jpg
http://upload.wikimedia.org/wikipedia/commons/8/85/Numbers_grid_in_NY.jpghttp://upload.wikimedia.org/wikipedia/commons/8/85/Numbers_grid_in_NY.jpghttp://upload.wikimedia.org/wikipedia/commons/8/85/Numbers_grid_in_NY.jpghttp://upload.wikimedia.org/wikipedia/commons/8/85/Numbers_grid_in_NY.jpg


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Prof Dr Karin Knorr-Cetina,Sociologist

Concept: Object-CenteredSociality

https://svn-create.freedesktop.osuosl.org/public/create/docs/logo/images/light_bulb_off3.jpg
https://svn-create.freedesktop.osuosl.org/public/create/docs/logo/images/light_bulb_off3.jpghttps://svn-create.freedesktop.osuosl.org/public/create/docs/logo/images/light_bulb_off3.jpghttps://svn-create.freedesktop.osuosl.org/public/create/docs/logo/images/light_bulb_off3.jpg


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You need Context!

http://flickr.com/photos/nolifebeforecoffee/124659356/
http://flickr.com/photos/nolifebeforecoffee/124659356/http://flickr.com/photos/nolifebeforecoffee/124659356/http://flickr.com/photos/nolifebeforecoffee/124659356/


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My app a Social Object?

http://adsoftheworld.com/media/print/lego_video_game?size=_original
http://adsoftheworld.com/media/print/lego_video_game?size=_originalhttp://adsoftheworld.com/media/print/lego_video_game?size=_originalhttp://adsoftheworld.com/media/print/lego_video_game?size=_original


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It always was!


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Lets recap:Social is interaction

in context

Object

http://upload.wikimedia.org/wikipedia/commons/e/e0/Petanque_players_in_Cannes_(France)_2003.jpg
http://upload.wikimedia.org/wikipedia/commons/e/e0/Phttp://upload.wikimedia.org/wikipedia/commons/e/e0/Phttp://upload.wikimedia.org/wikipedia/commons/e/e0/P


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Its about Engagement

- People Interactby nature.

- Fans can be Fanatics!

- An app and the environment inwhich it is set matters to its fans.

Apps are powerful socialobjects

http://www.windsorfinejewelers.com/media/catalog/product/cache/1/image//t/a/tacori-platinum-round-diamond-semi-mount-engagement-ring.jpg
http://www.windsorfinejewelers.com/media/catalog/product/cache/1/image//t/a/tacori-platinum-round-diamond-semi-mount-engagement-ring.jpghttp://www.windsorfinejewelers.com/media/catalog/product/cache/1/image//t/a/tacori-platinum-round-diamond-semi-mount-engagement-ring.jpghttp://www.windsorfinejewelers.com/media/catalog/product/cache/1/image//t/a/tacori-platinum-round-diamond-semi-mount-engagement-ring.jpg


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What

- Create Fanatics.

- Provide avenues for peoplespassion.

- Incorporate peoples strongestcommunity: their friends!

- Keep it in context, i.e. in the app.


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How

- High-Scores (Reward) but make

them customizable (Relevant).

- Connect to the community(Avenues of Passion).

- Person-to-Person Challenges &(Playful contextual interaction).

- Awards / Rewards (Fanatics).

- In-app transactions & VirtualCurrencies (ContextualMonetization).

74%


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Source: Bain Consulting

74% of all buying decisions are madeon a friendsrecommendation

http://www.cartoonary.com/madagascar/images/madagascar-marty-alex-gloria-melman-penguins-julien-2048x1536.jpg
http://www.cartoonary.com/madagascar/images/madagascar-marty-alex-gloria-melman-penguins-julien-2048x1536.jpghttp://www.cartoonary.com/madagascar/images/madagascar-marty-alex-gloria-melman-penguins-julien-2048x1536.jpghttp://www.cartoonary.com/madagascar/images/madagascar-marty-alex-gloria-melman-penguins-julien-2048x1536.jpghttp://www.cartoonary.com/madagascar/images/madagascar-marty-alex-gloria-melman-penguins-julien-2048x1536.jpg


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Cross-promotions,Friend Finding, andSocial NetworkIntegration letpeople connect toeach other and get

the word out.Increase installedbase

challenges andachievementsengage users andlet them share

their appexperience.

Increase useractivity

Downloadablecontent and in-appcurrencies driveadditional revenuestreams

Increase revenues


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Increased installed basefrom more people downloading the games


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Increased activity in your app:people use it more often


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Increased revenuesfrom additional revenue streams


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123,296,966,069,453

The Law of Big Numbers

One last thing:


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* Already integrated

**

*

*

*

** Scoreloop is the official partner for mobile gaming

*


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dont forgetthe other

smartphones!

And maybe the other folks are noteworthy, too...

C S


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Core Social

- Social Tools (High-Scores,

Player-to-Player Challenges,Recommendations [using anysource available], Awards &Trophies.

- Full virtual currency (supportsin-app purchases, itemdownloads, dual currency)

- Multi-platform: iPhone, Android,BREW, Symbian, MeeGo, RIM, Web.

Image Credits


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Image Credits

http://upload.wikimedia.org/wikipedia/commons/8/85/Numbers_grid_in_NY.jpghttp://gapingvoidgallery.comhttp://upload.wikimedia.org/wikipedia/commons/e/e0/Petanque_players_in_Cannes_(France)_2003.jpghttp://upload.wikimedia.org/wikipedia/commons/5/56/Bhgs_crowd.jpg

https://svn-create.freedesktop.osuosl.org/public/create/docs/logo/images/light_bulb_off3.jpghttp://www.easy-access.com/garagelo/coloring/tools.gifhttp://www.scorpioshoes.com/accessories-42/shoe-care-44/dr-martens-shoe-polish-black-8128.htmhttp://picasaweb.google.com/lh/photo/f-4eoJyuiitoJIPDaqrMJQhttp://img.wallpaperstock.net:81/car-mechanics-wallpapers_11816_1024x768.jpghttp://www.mixedforyou.com/fineart/Renaissance/Flying%20Machine,%20Leonardo%20da%20Vinci,%201490.jpghttp://blogs.fayobserver.com/faytoz/files/2008/10/davinci_toothed_gears_original.jpghttp://www.adsinn.com/wp-content/uploads/2008/01/1100109100-1.jpghttp://adsoftheworld.com/files/images/video-game.jpghttp://www.thealarmclock.com/euro/images/flirtomatic.pnghttp://img.glu.com/WSOP_Mobile/images/WSOP_header_logo.png

http://villageshow.co.uk/assets/images/trophy.jpghttp://images.internetsafety.com/www/images-pm/safe-eyes-mobile-logo.jpghttp://www.foldingbikehut.co.uk/images/Toolbox%20Travel.jpg
http://www.foldingbikehut.co.uk/images/Toolbox%20Travel.jpghttp://www.foldingbikehut.co.uk/images/Toolbox%20Travel.jpghttp://images.internetsafety.com/www/images-pm/safe-eyes-mobile-logo.jpghttp://images.internetsafety.com/www/images-pm/safe-eyes-mobile-logo.jpghttp://villageshow.co.uk/assets/images/trophy.jpghttp://villageshow.co.uk/assets/images/trophy.jpghttp://img.glu.com/WSOP_Mobile/images/WSOP_header_logo.pnghttp://img.glu.com/WSOP_Mobile/images/WSOP_header_logo.pnghttp://www.thealarmclock.com/euro/images/flirtomatic.pnghttp://www.thealarmclock.com/euro/images/flirtomatic.pnghttp://adsoftheworld.com/files/images/video-game.jpghttp://adsoftheworld.com/files/images/video-game.jpghttp://www.adsinn.com/wp-content/uploads/2008/01/1100109100-1.jpghttp://www.adsinn.com/wp-content/uploads/2008/01/1100109100-1.jpghttp://blogs.fayobserver.com/faytoz/files/2008/10/davinci_toothed_gears_original.jpghttp://blogs.fayobserver.com/faytoz/files/2008/10/davinci_toothed_gears_original.jpghttp://www.mixedforyou.com/fineart/Renaissance/Flying%20Machine,%20Leonardo%20da%20Vinci,%201490.jpghttp://www.mixedforyou.com/fineart/Renaissance/Flying%20Machine,%20Leonardo%20da%20Vinci,%201490.jpghttp://www.mixedforyou.com/fineart/Renaissance/Flying%20Machine,%20Leonardo%20da%20Vinci,%201490.jpghttp://www.mixedforyou.com/fineart/Renaissance/Flying%20Machine,%20Leonardo%20da%20Vinci,%201490.jpghttp://img.wallpaperstock.net:81/car-mechanics-wallpapers_11816_1024x768.jpghttp://img.wallpaperstock.net:81/car-mechanics-wallpapers_11816_1024x768.jpghttp://picasaweb.google.com/lh/photo/f-4eoJyuiitoJIPDaqrMJQhttp://picasaweb.google.com/lh/photo/f-4eoJyuiitoJIPDaqrMJQhttp://www.scorpioshoes.com/accessories-42/shoe-care-44/dr-martens-shoe-polish-black-8128.htmhttp://www.scorpioshoes.com/accessories-42/shoe-care-44/dr-martens-shoe-polish-black-8128.htmhttp://www.easy-access.com/garagelo/coloring/tools.gifhttp://www.easy-access.com/garagelo/coloring/tools.gifhttps://svn-create.freedesktop.osuosl.org/public/create/docs/logo/images/light_bulb_off3.jpghttps://svn-create.freedesktop.osuosl.org/public/create/docs/logo/images/light_bulb_off3.jpghttp://upload.wikimedia.org/wikipedia/commons/5/56/Bhgs_crowd.jpghttp://upload.wikimedia.org/wikipedia/commons/5/56/Bhgs_crowd.jpghttp://upload.wikimedia.org/wikipedia/commons/e/e0/Phttp://upload.wikimedia.org/wikipedia/commons/e/e0/Phttp://gapingvoid.com/http://gapingvoid.com/http://upload.wikimedia.org/wikipedia/commons/8/85/Numbers_grid_in_NY.jpghttp://upload.wikimedia.org/wikipedia/commons/8/85/Numbers_grid_in_NY.jpg


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@vhirsch

http://vhirsch.com/blog

[email protected]

+44 7843 599 678

http://scoreloop.com

Thank you!
http://www.bluebeck.co.uk/http://www.bluebeck.co.uk/mailto:[email protected]:[email protected]://www.bluebeck.co.uk/http://www.bluebeck.co.uk/

Documents

The Economics of Apps