Mobile application market: A developer’s perspective

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Abstract

Major software companies, such as Apple and Google, are disturbing the relatively safe and established actors of the mobile application business. These newcomers have caused significant structural changes in the market by imposing and enforcing their own rules for the future of mobile application developments. The implications of these changes do not only concern the mobile network operators and mobile phone manufacturers but also bring additional opportunities and constraints for current mobile application developers. Therefore, developers need to assess what their options are and how they can take advantage of these current trends. In this paper, we take a developer’s perspective in order to explore how the identified trends will impact the mobile application development markets. Our preliminary analysis leads us to suggest eight propositions which summarize our findings and can be the starting points for future empirical research.

Introduction

Mobile computing has caught the attention of the research community for quite some time (Forman and Zahorjan, 1994) and has also reached the commercial industry and mainstream consumers via smartphones and PDAs. The constant improvement in hardware related to mobile computing, such as better processing power, larger wireless network bandwidth, enhances capabilities of mobile devices. More than ever, mobile devices can run rich stand-alone applications as well as distributed client–server applications that access information via web gateways. Lately, the development of mobile applications has generated more interest among the independent and freelance developer community. This has opened up new avenues for future mobile application and service development. The potential of the mobile application market is expected to reach $9 billion by 2011, according to Compass Intelligence.1

For many years, the development of mobile services was mostly controlled and managed by the mobile network operators (MNO), phone manufacturers, and some mobile application and content providers. Traditionally, in the mobile application industry, there are several actors intervening along the value chain (Adrian, 2002, Ballon et al., 2008, Barnes, 2002, Buellingen et al., 2004, Funk, 2009, Maitland et al., 2002, Tsalgatidou et al., 2001), in which each actor has its own importance. Recently, this has changed with the arrival of software companies with new mobile phones and platforms such as the iPhone and Android. The market structure and value chain are evolving (de Reuver and Haaker, 2009, Feijóo et al., 2008). Roles are changed, combined and exchanged. Some actors lost control on the device (i.e., mobile network operators – MNOs), others got new revenue streams (i.e., portal providers), and some became more seamlessly integrated into the platforms (i.e., financial institutions, content providers).

The current mobile development market is dominated by five big platform providers (i.e., providers of operating systems and development tools) namely: Nokia with its Symbian OS (52.4%),2 RIM with its Blackberry OS (16.6%), Microsoft with its Windows CE OS family (11.8%), Apple with its iPhone OS (8.2%), and LiMo Foundation with its Linux Mobile operating system (8.1%). In addition, Google launched its Android operating system and is already expected to become part of the big players rapidly in the industry. Gartner predicts that it will become the second most popular platform behind Nokia by 2013 (Cozza, 2009).

With the current evolutions observed, it is not yet clear who will be the winners and losers. However, we can already notice that the situation will not go back to its previous state. We perceive new opportunities and threats for incumbents while the market structure is changing. There is a real need to better understand the current context to take advantages of these changes from a developer’s perspective.

In this paper, we propose to analyze the current mobile application market from a developer’s perspective. We start by examining the mobile application development mechanism.3 It is essential step in order to better understand how the different elements are intertwined and interact with each other. Using the different identified elements, we analyze and discuss some trends that are affecting the mobile application market. We continue our research effort by examining the implications of each determined trends for developers. In order to enhance our contribution, we suggest eight propositions derived from the discussed implications. These propositions summarize our analysis and could open new avenues for further empirical research. In conclusion, we summarize the findings and discuss the remaining issues.

Section snippets

Mobile application market mechanism

To structure the description of the current practices, we propose to examine the current mobile application development mechanism from a developer’s perspective. We analyze the application distribution process, and classify platforms in different categories depending on their approach.

The mobile application distribution process is a process by which an application is developed, brought to the market and purchased by customers, and used on mobile devices. This process involves three main

Analysis of the mobile application market and trends

In this section we analyze the current state of the mobile application market as well as trends with respect to the three components of the application distribution process model presented in Fig. 1. We examine the approaches used by platform providers towards (i) development tools, (ii) portals and (iii) devices. Furthermore, we analyze how these three components are or can be (iv) integrated together.

Implications for developers

The different market trends, presented in the previous section, can be seen as not only opportunities but also threats for developers. Therefore, it is crucial that developers have a good understanding of the possible implications of each trend. Hereafter, we analyze these trends and propose eight possible implications for developers. These propositions could represent starting points for further research.

Conclusion

In this paper, we described the implications that different market and technology trends have on the mobile application development market. The current evolutions show that the game has changed dramatically for developers. There are many new opportunities for them to develop, distribute, and generate significant revenues with the emerging mobile application portals.

Since the mobile application development landscape has substantially changed over the past several years, mobile development

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