previous blog, we laid out the regional landscape for app developers in terms of share, app install costs and app earnings. We also explored the OS landscape across regions. In this blog, we move forward and explore the dynamics of a booming mobile app economy - factors driving mobile app growth and it’s interconnectedness with smartphone adoption.
The story starts with smartphones, as it always does. For the first time ever, there are now more
active mobile devices than there are humans on the planet. About 1.167 billion smartphone devices were shipped last year, a year-on-year increase of 25.9%. With increasing competition amongst smartphone manufacturers, costs are being driven low and more is being offered for less. This, in turn, is driving growth in emerging markets, opening up a wider and eager audience for app developers.
Let’s look at how this impacts the app economy of countries around the world.
Smartphone Penetration and Install Growth
Emerging countries such as the Philippines, Indonesia and Russia are the growing app install destinations of the world. These markets with their low smartphone penetration rate boast of an eager audience willing to explore and download mobile apps. This drives the install growth through the roof. Spurred by low cost smartphones, cheap mobile internet plans and an enthusiastic audience, these markets are golden for app developers.
Smartphone penetration and Cost Per Install (CPI)
Consequently, emerging markets with low smartphone penetration and high install growth will drive the CPI low due to the sheer volume of installs. It is cheaper to drive an app download in Indonesia or Malaysia as compared to USA or UK.
Per Capita Installs and CPI
Similarly, countries with low smartphone penetration, low CPIs and high Install growths boast of high per capita installs. Being mobile first nations and relatively new to smartphones, mobile users in Indonesia, Malaysia and Philippines displayed a higher tendency to download apps. This is reflective of a relatively young smartphone nation eagerly consuming mobile content, much to the developer’s delight.
effective Cost Per Mile (eCPM) and Smartphone penetration
However, currently the highest rewarding markets for app developers of the world are those with high smartphone penetration. These are typically mature markets where smartphones have been around for a while and users are now accustomed to mobile payments. As users willingly shop online - either through in-app purchases or otherwise, developers are rewarded through their apps. As emerging markets such as China and Russia move towards higher smartphone penetration, app developers will be rewarded with an enthusiastic, mobile-first audience looking to transact via mobile.
eCPM and CPI
As in life, things come a full circle on mobile too - eCPMs and CPIs are closely and directly related. Mature markets like the USA, UK, and Germany command high CPIs, and consequently, also reward app developers with higher eCPMs. This stems from a user base willing to make more purchases through their mobile devices.
So where does this leave us?
Growing mobile ad spend, increasing time spent on mobile apps, rising smartphone shipments and adoption are keenly driving mobile app growth. If ever there was a time for developers to up their game, it is now. Understanding the key metrics that influence market dynamics to hone your user acquisition and monetization strategy is the first basic step.
In the next blog of this series, we will explore the world as seen in Android and iOS. Which OS costs developers more? Who’s prefers one over the other? How much more can you expect to pay for a download over iOS and where?
For all this, and more, stay tuned for the next part in this series!
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The State of Mobile App Downloads Q3, 2014
The State of Mobile App Monetization Q3, 2014
*CPI Index : All country CPIs are indexed to the global CPI on the network
*eCPM Index : All country eCPMs are indexed to the global eCPM on the network