Developer Megatrends Η1 2015

Developer Megatrends H1 2015 2015 VisionMobile 1

DEVELOPER MEGATRENDS H1 2015

2015 VisionMobile.com May 2015

Developer Megatrends H1 2015 2015 VisionMobile

VISIONMOBILE: THE ANALYSTS OF THE DEVELOPER ECOSYSTEMVisionMobile is the leading market research and analysis company in the app developer economy. Our surveys

and SDK analytics uncover the latest trends across mobile, IoT, PC, and Cloud developers, and help our clients

decode the complex developer ecosystem landscape.

Developer Economics is the largest, most global app developer research and engagement program reaching up

to 10,000 developers in over 140 countries. Now in its 9th edition, the research program tracks developer

experiences across platforms, revenues, apps, tools, APIs, segments and regions. Our Developer Economics

research also covers IoT, with the latest survey capturing trends from 4,000+ IoT developers.

Primary research Thought-leading reports Developer data


TRUSTED BY THE LEADING BRANDS AND MEDIA clients who benefit from developer economics Leading media channels quoting our research


ABOUT THE AUTHOR

Stijn Schuermans Senior Business Analyst

Michael Vakulenko Strategy Director

Christina Voskoglou Director of Research and Operations

Stijn focuses on understanding how technology becomes value-creating innovation, how business models affect market dynamics, and the consequences of this for corporate strategy. He is the lead Internet of Things researcher in the VisionMobile team since 2012. Stijn holds an engineering master degree and an MBA. He has over 10 years experience as an engineer, product manager, strategist and business analyst. You can reach Stijn at: [email protected] @stijnschuermans

Michael has over 18 years experience in mobile and telecom starting from working on first experimental 3G systems in Qualcomm. Later on Michael was part of several startups developing products in the areas of wireless, enterprise networking and mobile apps. At VisionMobile Michael works at the cross section of business models, economics and technology where he leads strategy practice for software-centric business models in mobile, Internet of Things and Connected Car. You can reach Michael at: [email protected] @mvakulenko

Christina leads the analyst team and oversees all VisionMobile data projects from methodology to analysis and insights generation. She is also behind VisionMobiles developer segmentation research, as well as the Developer Economics reports and DataBoard subscription services. Christina has more than 16 years of experience in statistical consulting, BI design and business forecasting. She holds an MSc in Statistics from the London School of Economics (LSE) and a BSc in Economics & Statistics from the University of Bath. You can reach Christina at: [email protected] @ChristinaVoskog


IN THIS REPORT

5

Introduction Developers are kingmakers in every industry

Developers escape from the

app store

Developers escape consumer

markets

Apps escape from screens

Platform players escape from

mobile


DEVELOPERS ARE KINGMAKERS IN EVERY INDUSTRY6


DEVELOPERS HAVE CONQUERED THE PHONE WITH APPS

7 Source: VisionMobile estimates


THEYRE JOINED BY 800,000 NEW MOBILE DEVELOPERS PER YEAR

8

http://vmob.me/AF14

Source: App Economy Forecasts 2014-2017 | VisionMobile


http://vmob.me/IoT15

9

53% of mobile developers are already

involved in the Internet of Things

and many more to come

DEVELOPERS MOVE TO MORE AND MORE INDUSTRIES AND VERTICALS


DEVELOPERS ARE CONQUERING THE WRIST

10

Apple Watch

3,500+ apps

Android Wear

2,300+ apps

Pebble

1,400+ apps

Source: Apple, Pebble, Android Wear Center, VisionMobile estimates (Q1 2015)


DEVELOPERS ARE CONQUERING THE CAR

11

Aftermarket solutions for any car, 250+ OBD apps in Google Play,

growing support from big players

API available by invite only 40 new vehicle models in 2015

API publicly available (Nov 2014) Apps can be published on Google Play (Mar 2015)

First models in 2015


DEVELOPERS ARE CONQUERING THE HOME

12

There are a lot of things that were not going to be able to build. We want to work with developers who bring other great ideas in the mix. [] The iPhone was great - it had 5 apps on it when it shipped. Now it has a million apps on it. The opportunity in the home is going to be pretty close. Tony Fadell

ex-Apple, CEO Nest

https://www.youtube.com/watch?v=377oDvnrk5M&t=20m40s (edited for clarity)

a small selection of Smart Home platforms and APIs


DEVELOPERS ARE CONQUERING THE SKY

13

There are a lot of industrial use cases that DJI cant build the software for, but developers can come and create software for industrial companies. Developers are already using our SDK to build apps to help control drones for agriculture, construction, and mining. Michael Perry

DJI

http://techcrunch.com/2015/05/06/dji-drone-platform/

Android for drones

http://dronekit.io/

Raised $75M to build an industrial UAV developer platform (May 2015)

http://dev.dji.com/

An operating system for commercial drones

http://www.airware.com/developers


Developers are conquering cities healthcare clothing factories

well, everything really!

14


TODAYS COMPETITIVE BATTLES ARE WON AND LOST BY ATTRACTING DEVELOPERS

15

Salesforce 1.4M registered devs in 2013 took #1 spot from Oracle in CRM

Apple iOS | Google Android took #1 spot from Nokia and Blackberry in (smart)phones

Under Armour fashion brand uses

developers to engage communities of athletes

Microsoft Windows dominant OS in the 90s and 00s because of superior developer strategy


EVERY COMPANY SHOULD MASTER DEVELOPER ECOSYSTEM SKILLS

16

platform technology people

rules for interaction + +

developer ecosystem =

individuals & companies users & developers

API

cloud, APIs, apps, devices, OS,

app curation, governance,


Developers are a driving force in every industry

and a source of competitive advantage

Every company should master developer ecosystem skills


DEVELOPERS ESCAPE FROM THE APP STORE18


70% REVENUE GROWTH FOR APPS IN ONE YEAR. GREAT NEWS! OR IS IT?

19

Source: http://blog.appannie.com/mobile-app-advertising-and-monetization-trends-2013-2018/

Worldwide online advertising and app revenue


THE APP STORE ALONE CANNOT SUSTAIN THE DEVELOPER POPULATIONOnly 1 in 9 developers that rely on app store revenues are in the safe zone

20

% of mobile developers who use paid downloads, in-app purchases or advertising (and no other revenue model), by monthly revenue (n=1,187)

Source: Developer Economics Q1 2015

0%# 10%# 20%# 30%# 40%# 50%# 60%# 70%# 80%# 90%# 100%#

$0#


FOLLOW THE MONEY: E-COMMERCE IS THE WINNING APP REVENUE MODEL

21

Selling offline goods and services via apps:

71% of the app economy

9% of developers

earned by



E-COMMERCE MODEL #1: APPS AS A CHANNELTransact through the app

22

Nearly 60 percent ofAmazon.comcustomers shopped using a mobile device during the 2014 holiday period


E-COMMERCE MODEL #2: MOBILE-FIRST BUSINESSESOffline services that couldnt exist without the app

23

Uber will reach an estimated $10 billion annual run rate by end of 2015 http://www.businessinsider.com/uber-revenue-projection-in-2015-2014-11


E-COMMERCE MODEL #3: APPS AS A PLATFORMEnable others to build e-commerce businesses on top of your app

24 Source: Tencent investor presentation

WeChat app

3rd party businesses

operating on WeChat


http://vmob.me/AF14

200

300

400

500

91 120

152 186

2014 2015 2016 2017

total#mobile#e9commerce#revenue#($B)# all#other#revenue#models#($B)#

MOBILE E-COMMERCE WILL ONLY GET BIGGER IN THE COMING YEARS

25 Source: App Economy Forecasts 2014-2017 | VisionMobile


App stores alone cannot sustain the developer population

e-commerce is and will stay

the winning app revenue model


DEVELOPERS ESCAPE FROM CONSUMER MARKETS


ANOTHER WAY TO DODGE THE POVERTY TRAP: TARGET ENTERPRISES

28

64% of developers target consumers

20% of developers target enterprises


19% makes more than $10K per month

43% makes more than $10K per month


MAKING THE JUMP TO ENTERPRISE MIGHT BE EASIER THAN IT SEEMS!

29

Top 5 consumer categories Top 5 enterprise categories

There is substantial overlap in what consumer and enterprise app developers are working on.


29%#

29%#

26%#

25%#

24%#

Utilities

Games

Entertainment

Education & Reference

Business & Productivity Tools

64%#

52%#

20%#

17%#

16%#

Enterprise

Business & Productivity Tools

Utilities

Communication & Social Networking

Education & Reference


MAKING THE JUMP TO ENTERPRISE MIGHT BE EASIER THAN IT SEEMS!

30

Many apps can be simply repositioned or repurposed to attract an enterprise audience rather than consumers



THE INTERNET OF THINGS HAS A SIMILAR DISTRIBUTION OF DEVS AND REVENUE

31

Professionals, employees, other

% of developers with IoT as their main occupation by target audience

enterprises consumers

Source: Developer Economics Q1 2015 | Deloitte

60% of IoT device sales

90% of IoT service revenues

will come from enterprises in 2015


WINNER IOT DEVS APPLY CONSUMER TECHNOLOGY TO ENTERPRISE PROBLEMS

32

Wearables in industrial environments enable and optimize workflow efficiency,

enhance communications, reduce paperwork, and allow workers to take advantage of a hands-

free work environment

Source: Tractica

Drones "The Phantom was simple enough for

beginners, but powerful enough to interest serious hobbyists, professional

photographers, and filmmakers.

Smartphones & wearables in medical Apple ResearchKit: consumer smartphones and wearables provide objective, continuous sensor data and high signup rates in clinical research

Philips Hue "The Hue range began as a pure consumer

project [] but the Hue line has seen traction among small and medium businesses that are looking to create ambience in their premises."

Waze Connected Citizen program Data exchange program based on consumer-

generated data replaces expensive road sensor network with limited geographical reach.

20+ cities and regions already participating


App and IoT developers will repurpose

consumer technology and business models

to solve the most important enterprise problems

(and dodge the poverty trap by doing so)


APPS ESCAPE FROM SCREENS


APPS ARE MOVING OUT OF MOBILE DEVICESThe app paradigm of bite-sized software is replicated outside of smartphones

35

Desktop Watch

Browser

Car

Home TV


THE NATURE OF APPS IS CHANGING, TOO

36


YESTERDAY: THE TRADITIONAL APP

37

the value is delivered by the app itself (even when connected to a backend service)


TODAY: THE COMPANION APP

38

the value is delivered by the device the app is just the remote control


TOMORROW: THE DATA APP

39

the value comes from combining all kinds of data the app processes triggers and signals across devices, sensors and APIs


THE FOCUS OF INNOVATION SHIFTS TO MAKING SENSE OF DATA

40

devices sensors

APIs Data Data app

delivering knowledge, enabling action

Connected device Companion app

Traditional app Yesterday

Today

Tomorrow

Where the value is concentrated


THE RISE OF THE DATA DEVELOPERNot all IoT developers do hardware; many more work on software and data

41

App makers

e.g. smartwatch apps, car apps,

Smart Home scenarios

Device makers

e.g. fitness bands, smart flower pots

Data-centric

e.g. smart home hub, health apps, Smart City,

system integrators, community projects

% o

f IoT

dev

elop

ers


FROM DEVICE TO DATA PLATFORMS

42

Current platform kings

device-centric

Future platform kings

data-centric

data routing

data structuring

data tracking & presentation

big data analytics stream processing


Value in tomorrows apps will come from

making sense of data

Data developers and data platforms will be king


PLATFORM PLAYERS ESCAPE FROM MOBILE


http://vmob.me/DE1Q15

WHAT IS THE FUTURE OF MOBILE PLATFORMS, GIVEN

45

(a) the current stalemate in the platform wars

(b) the evolution to data-centric apps, moving the focus away from operating systems and into the cloud


THE FUTURE OF MOBILE ECOSYSTEMS IS IN THE INTERNET OF THINGSAndroid & iOS fully leverage their developer and user bases to gain traction fast

46

Smart Home

Wearables Health & Wellness

Connected Car

WatchKit HealthKit

Google Fit

HomeKit

All these platforms are in the top 3 by developer popularity in their vertical.


MOBILE RUNNERS-UP TRY TO COPY THE RECIPEWith varying results in time-to-market and developer mindshare

47

Smart Home

Wearables Health & Wellness

Connected Car

Windows in the Car?

N/A


E-COMMERCE PLAYERS ARE IN TOO WITH PRODUCTS, APIS AND CLOUD Distribution capability and engaged users attract developers

48

Mobile Internet of Things

Kindle Fire and Fire Phone Echo Fire TV

#1 e-retailer in China

Mi-series of phones and tablets wide range of home products and wearables


THE $B QUESTION: WILL NETWORK EFFECTS FROM MOBILE CARRY OVER TO IOT?Will the mobile platform duopoly be sustained?


In the future, IoT device selection by consumers and enterprises will be

determined by will it work with my existing services and devices.

We predicted this as early as 2010. In the

2012 edition of the Megatrends report, we talked about the evolving meaning of convergence. From converged networks,

to converged devices, to experience roaming.

That prediction is now playing out in full.

50


CONVERGENCE: EXPERIENCE ROAMING ACROSS DEVICES

51

Social circle Developer ecosystem User data roaming Service roaming User interaction design Industrial design Brand

experience roaming across devices

convergence = x


APPLE AS THE POSTER CHILD OF EXPERIENCE ROAMING

52

Social circle Developer ecosystem User data roaming Service roaming User interaction design Industrial design Brand

experience roaming across devices

Facetime

App store

iCloud

iTunes, Airplay

iOS

Apple

Apple

iPhone

iPad

Mac

Apple TV

Watch

CarPlay

iPod


MULTI-DEVICE, INTEGRATED EXPERIENCES

53

2012

HomeKit Health / Watch CarPlay

Nest Fit / Wear Android Auto

Echo / Alexa

N/A

Kindle Fire Fire TV

Mi Band + Mi / MIUI Mi note Mi TV / Mi Box

2015

Mac computers iPhone iPad Apple TV

Chrome browser Android Android tablets Google TV

Windows Windows Windows Phone Xbox

PC smartphone tablet smart TV smart home

Cortana Health / Band Windows in the Car

?

Amazon.com Fire Phone

N/A

N/A N/A Mi Smart Home +

health / wearables connected car


Mobile ecosystem winners are fully leveraging their developer

and user bases to win in the Internet of Things

In the future, IoT device selection by consumers and

enterprises will be determined by

will it work with my existing services and devices

Developer Megatrends H1 2015 2015 VisionMobile Copyright VisionMobile 2011

Knowledge. Passion. Innovation.

Updated: 12 November 2010

Get in touch with Us

Matos Kapetanakis [email protected] Senior Manager,

Get the latest Developer Economics reports: www.DeveloperEconomics.com/reports

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