THE INDIAN APP ECONOMY

By Rajat Kathuria & Sugandha Srivastav

India’s App Economy: Currently an Urban Tale

Google: Our Mobile Planet India (2013)

But with Enormous Potential...

Total Worth of Indian App Economy • 150 million USD App Downloads per Month • 100 million App Developers • 300,000

Projected Revenue from Paid Apps in India (rupees crore)

9% 10% Smartphone Feature Phone Multimedia Phone 81% Source: Nielsen Mobile Insights (2012) 89% percent increase in the number of smart phones in urban India from 2012 to 2013. Total: 51 million smart phones

The Second Phase of a Telecom Revolution: Content

 India’s teledensity is 73% will reach 100% by 2015.

 Mobile Phones have penetrated nearly all income strata.

Next Step: Exploit this connectivity to address India’s high service deficit.

 ICT for Development e.g. MOOCs, m-Health, m-banking, e governance etc.

Why apps in ICT for Development?

 Apps are intuitive to use due to their single-purpose nature .

 Often less-data intensive than internet sites.

 Will gain prominence as smart phone penetration rises.  Have the ability to create a significant number of jobs.

The App Economy’s 3D Framework

Source: Made by the Authors

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D: How to Bolster App Development

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Weak user interface design

 App developer teams in India must employ not only software engineers but also design professionals and psychologists so that an in-depth understanding of visual aesthetics and user behaviour is achieved. 

Lack of locally relevant content.

 Need local app distribution platforms that provide 70-30 revenue shares to developers.  Network coverage and capability must improve within the interiors of the country where the demand for highly localised apps is greater.  App developers will need to collaborate with OEMs to ensure that localised apps, which may require hardware support for Indic scripts, function well across a variety of devices.  Government can offer technical and monetary support to apps developers and distributors who are designing apps that serve a public good.  Telecom operators may have a role to play, provided they offer competitive revenue shares to app developers, in facilitating mobile payments since they cater to a large prepaid segment.

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D: How to Boost App Distribution

 The problem: The most popular app distribution platform in India is Android’s GooglePlay. International app stores do not lend themselves to the easy discovery of highly India specific/regional content. 3% 5% 1% 8% 21% 62% Android Symbian Windows Phone Windows Mobile RIM iOS  Share of Purchases for India, Fieldwork: Sept-Oct. 2012 Source: Nielsen Informate Mobile Insights Need business model innovation on the app distribution side.  Case Study: AppsDaily    AppsDaily sells its own apps through physical outlets that are located across 140 cities in India. Circumvents unfavourable mobile-payment regulation by allowing payments in cash. Makes the process of obtaining apps easier for those who are less digitally literate or aware by having physical attendant at stores.

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D: How to Unlock Latent Demand

 Increase: Digital Literacy Awareness Gender Parity Advanced Data User SMS/Voice User Voice Only User 35% 6% 12% 6% 26% 51% 84% 83% 68% 13% India China USA UK Source: Mobile Youth Around the World, Nielson (2010) Male Female 20 39 47 55 80 61 53 45 India China USA UK Source: Mobile Youth Around the World, Nielson (2010)

Business Model Innovation in Monetisation

 The Freemium model  Subscription model  In-App Purchases  Advertising  In-App Advertising

Improving the Overall App Ecosystem

      Seed capital Network Infrastructure Consumer Devices Operating System Policy Framework Socio-Economic Condition       Innovation Penetration Affordability Fragmentation M-Payment & Spectrum Efficiency Usage For more details on the above, please read the report! 

Bottom Line

Mobiles for Entertainment  Mobiles for Development India can do better & apps can help.

M4D per million unique mobile subscribers

Source: GSMA Intelligence Country Overview: Sri Lanka Data: MDI Products and Services tracker, MDI Analysis But All Stakeholders Will Need to Contribute as shown in 3D framework.

The Way Forward & Conclusion

 Focus will be on urban market till saturated – low-hanging fruit.

 Cater to the domestic market by focussing on localised content.  Aim for international competitiveness through innovation:    The ability to search for in-app content without downloading the app.

Apps that allow for a new degree of device customisation.

Apps that replace previously paid-for-services.

 The app economy must be strengthened by increasing consumer awareness, enabling the growth of local app distribution platforms and incentivizing app developers to create locally relevant content so that apps can penetrate new regions. These initiatives will only be successful if network coverage and capability increase as well.

One Small Presentation is Not Enough

 Contact us for more information!

 Rajat Kathuria: [email protected]

 Sugandha Srivastav: [email protected]

Thank you!