The emerging market app store: Are you being served?

Speaking at the MEF forum at CommunicAsia Singapore on Tuesday, Amrish Kacker a partner and head of the Asia Pacific office of Analysys Mason predicted apps and app stores still had a world of growth in front of them, especially if apps began coming to mid and low range phones in future.

Kacker gave Apple its dues as the first and most important enabler for developers, but noted that the definition of an app in the developing world was quite different to what it meant to most smartphone users and that there was likely to be an immense business opportunity there. “The the number of people worldwide using apps is still very low,” he pointed out.

Kacker said he believed there was still much to be done in the way of taking the mobile phone with its small screen and trying to do a lot more with it, saying this would also go a long way towards encouraging people to sign up for some form of data access.

Apple was still the number one company driving app demand and excitement, explained Kacker, with around 10,000-15,000 new apps coming into the Apple app store every month. “Apple maintains lots of liveliness in its app store which keeps people coming back,” he said explaining the firm’s success in the app world market.

Refresh rates for apps and app stores in general is vital to pull people back into browsing the market, he said.
People bought apps, said Kacker, like they would buy an ice cream – on impulse. Because the price is relatively low per app, people can be figuratively walking down the street, see something they want, and just buy it, much like one would buy an ice cream cone on impulse.
Of course micropayments have really helped to foster this mentality as well as help consumers get over their trust issues, although of course for some those still exist.
For developers, the quick turnaround time of getting apps on the app store – just three days in most cases – combined with revenue flowing in directly from consumers, has proved a huge incentive and boon to innovation.
There is still plenty of room for expansion, however, with at least 50% of all phones in Asia still not even being feature phones, let alone smartphones. That means over half the phones in the region are purely voice and text message capable, with only six percent being true smartphones.

This, explained Kacker, is why developers should be looking at a model for apps in emerging markets which can innovate with different channels of delivery.
Kacker did touch briefly on device fragmentation too, calling it a “problem” and noting it was “scary for developers,” especially with the huge influx of Chinese white box feature phone handsets which were very difficult to plan and develop for.

Overall, however, Kacker noted that despite the low active user base, the high revenues associated with smartphone apps provided strong motivation for developing an app store business.
See Kacker’s conclusion below: