Some areas are hotter than others, and for good reason. We look at where you can make some serious money in mobile app development, highlighting four areas where analysts predict the big bucks.
The mobile landscape is very different from the way it looked six years ago, when Apple debuted the App Store. Back in the early days, anyone could have a hit app because there were so few to choose from. You probably remember the story of Ethan Nichols, the Sun employee who created iShoot, a tank game, that earned him $800,000. He quit his job to go into full time iPhone game development.
Seen him lately?
With more than one million apps in the Apple App Store and on Google Play, it’s a lot harder to stand out. You need a killer app that people want. Fortunately, there is still life in the app stores with plenty of growth opportunity. The trick now is to find the growth markets. In talking to market analysts, we’ve identified four that are worth targeting.
Market #1: Fitness
How ironic it is that a device so identified with sedentary lifestyle is seeing so much life in the athletic and fitness markets. But IHS iSuppli says that fitness and health apps will be a hot market, one of the hottest, in the coming years. The market research company predicts global installations of mobile apps used for sports and fitness activities to grow by 63% from 2012 to 2017.
An IHS consumer survey found that 62% of respondents were interested in using sports and fitness apps also were prepared to purchase hardware that enhances the functionality of the software. IHS said users primarily used heart-rate monitors today; however, expect more attention to other devices, such as the new smartwatches, Google Glasses, and other glasses devices – even a device to correct your posture.
IHS projects global shipments of sports and fitness sensors and monitors will total more than 250 million units during the next five years. This means a large potential audience for fitness apps that interface with them. IHS predicts the number of sports and fitness apps downloaded for use on smartphones will grow from 156 million in 2012 to 248 million download in 2017.
“Sports and fitness apps have become an integral part in the daily lives of millions of mobile users, allowing them to use their smartphones to do everything from tracking running distances, to recording their strength training sessions, to monitoring their heart rates,” said Shane Walker, senior manager for consumer & digital health research at IHS, in a statement.
There are already a number of fitness related apps, but there’s room for more. And it’s not just the fitness-minded who use these apps. Personal trainers are shifting from the old pen and paper method of record keeping with their clients to iPads, and using clip-on card readers to take payment.
There’s obviously big company interest. The most recent acquisition was MapMyFitness, which was snapped up by Under Armour. The athletic clothing maker had its own software for athletic tracking but it wasn’t very good (a common theme, as you will see), so it bought a popular independent vendor. Expect that story to repeat itself.
Market #2: Concierge apps
“Concierge apps” is a broad category of applications with a common thread: They help people get something done. This is exemplified by – and especially true of – travel apps. Travel apps help you book a flight, hotel room, car, and dinner. They help you find out when a plane is arriving. They put your travel itinerary in one place. These apps fill the App Store and Google Play and come from both vendors and third parties.
The reason third-party apps do so well? “Vendors don’t do a very good job of it. It’s not their primary business,” said Jack Gold, president of J.Gold Associates, who follows the mobile market. (See the Under Armour/MapMyFitness example above.)
Gold points to the success of Worldmate, a company that started as a Palm developer but moved to other platforms. Its software allows travelers to plan trips, book hotels and car rentals, and organize itineraries from calendar and scheduling apps such as Outlook. It was bought out last year by a major travel agency for $20 million.
Gold said these are the apps people are willing to pay for, especially business travelers. “Either I buy them or they buy them to keep me as a client,” he said. These apps handle travel, expense reporting, contacts, everything needed to do your job. “That I’m willing to pay for,” he said.
His advice to developers is to identify a particular problem and make a solution, rather than make another general consumer app where you compete with thousands of people. Become an expert in a particular market and figure out the problem people are trying to solve through mobility. That’s how you make money.
Market #3: Game-changers
Chase Bank started it, and now every bank offers the feature in a mobile app: Rather than going to a bank ATM to deposit a check, simply take a picture of the check and it’s deposited. Banks have limitations on how big the deposit can be – Wells Fargo, for example, won’t take a check larger than $1,000 – but it sure beats going to the ATM.
It turns out the banks don’t need the paper check. Most of the time they just throw it out. The check issuer gets a statement, most likely electronic, informing them that the check cleared – and that’s good enough. The bank advises you to hold on to the check for a few days and make sure it clears, but after that, you can toss the check as well.
It’s these kinds of game changers, making apps much richer, that will make for hit apps, predicts John Jackson, program vice president for mobility research at IDC. “I don’t think there is likely to be any new app categories showing major growth in the next two or three years. The ones with the greatest potential are around payments and home automation control,” he said.
“Where we’re seeing a lot of investment is enriching or context-enabling your daily experience. That will manifest first in retail environment and the other is payments,” Jackson said, citing the bank apps adding check deposits via a picture as an example.
Rather than focusing on inventing the next new thing, Jackson recommended, look at the current consumption and behavioral modalities. Think about ways to enrich those things and about ways to contextualize experiences people are having.
Market #4: HTML5
Jones cited improved hardware and software as the initial impetus, with faster CPUs and more cores on phones and the browsers of mobile devices getting better and matching parity with PC counterparts. Also, the advent of faster LTE networks will make loading complex apps a little quicker.
The mobile market is in a significant state of flux. I was seriously tempted to add a fifth category: migrating or cloning BlackBerry-specific apps. BlackBerry is now in freefall and likely to join Symbian and Windows CE in the computing museum, mobile phone OS branch. With BlackBerry as a standard for so long, a lot of BB-specific apps might fade away and never live on.
That’s just one of the changes. The BYOD consumerization revolution is shifting the use of smartphones in the workplace. That’s creating new opportunities for managing personal and private data on one device, to say nothing of the fact that now everyone at work has a smartphone, not just the sales and executive teams.
BlackBerry’s demise opens the door for an increasingly aggressive Microsoft, which has a decent mobile OS on its hands, and it will only improve as Microsoft unifies the desktop, tablet and mobile OSs, making cross-platform development seamless. It’s not there yet, but it will be.
So it’s important to keep an eye on the shifting marketplace while looking at potential app markets. There is plenty of opportunity even with more than a million apps in App Store and Google Play; it’s just a matter of picking the right markets. But it’s important to see where markets are going, too.