Growth Opportunities and Threats to the Mobile Applications Market

Arguably one of the fastest growing and most profitable industries around today is the mobile application development market. With over 258 billion app downloads by the end of 2022 and an estimated consumer app spend of $ 156, the industry is undoubtedly highly desirable for aspiring investors.

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That said, recent regulatory threats have become widespread in the EU, UK and US. It is important to take them into account for two reasons. First, they allow potential investors to accurately determine the likely forecast growth of the application development industry, and second, they can be potential opportunities for innovative developers who find ways to correct some of the market shortcomings discussed below. below.

First Quarter 2021 App Availability, Industry Growth, and More

The biggest names in the mobile application market right now are:

The prolific influence of Apple and Google

Google and Apple have arguably created a mechanism by which their initiatives are to be used.

The tech colossal app stores have (as of 2021) become exceptionally dominant to such an extent that the vast majority of the world’s major economies, including the US, EU and UK, are starting to introduce certain legislative measures which aim to increase the level of control which companies are currently facing.

Several US states, for example, have already placed invoices that directly and openly target the anti-competitive and anti-trust policies of Apple and Google; in fact, a plethora of leading application development companies have even judicially challenged Apple’s infamous policies. The Department of Justice itself may have set the trend in 2020.

This is because unlike in 2007 when the iPhone was first released, most people no longer just use their phones to make calls and send messages. These days, almost all aspects of people’s mobile activities are (to some extent) related to Google or Apple stores.

This has obviously given both companies an exorbitant level of control (and leverage) over the terms and conditions through which app developers can operate in the global web and app development industry.

Lack of competition costs money

As briefly mentioned above, virtually all apps run on Google’s Android software or Apple’s IOS. This means that most consumers use Android or Apple, and not both at the same time.

Therefore, the two companies cumulatively retain absolute discretion over how the vast majority of mobile phone transactions are handled. This has been the source of growing concern lately (in the wake of the COVID-19 pandemic and the rise of the e-commerce industry that resulted from it), as some changes in habits consumer spending inadvertently proliferated significantly.

When considering the extent of the significant presence of Google and Apple, it is worth noting the exceptionally lucrative and successful nature of the mobile market industry at this time. For contextual purposes, CNBC reports that Google’s app store gross revenue was around US $ 40 billion in 2020, with Apple’s exceeding US $ 68 billion.

Despite this, both companies have so far retained a very high degree of flexibility, being subject to relatively moderate government control. For example, Apple and Google still ban all payment solutions in their app stores (except theirs); this means that they can effectively charge a 15-30% service fee on all sales made in their stores, with virtually no competition.

For consumers, this usually translates (unsurprisingly) into higher prices (as most app developers typically choose to pass these costs on to their customers) while leaving no real choice in the matter.

Additionally, even when consumers can purchase the same apps outside of Google’s or Apple’s app stores at a significantly lower price, they tend not to realize it because Google’s terms and conditions and Apple specifically prohibits companies from informing their consumers in any way.

More surprisingly, Google and Apple tend to give a plethora of direct benefits to any apps they own. These include: a) preferential treatment in search algorithm rankings, and b) not having to pay a% commission (which means they can very easily gain a competitive advantage over the competitors involved. ).

Third-party applications must be competitive

Government initiatives to increasingly scrutinize Google and Apple are largely driven by the reasons discussed above.

There is no doubt that increased and ‘fair’ competition among app providers will ultimately benefit one most economy class – consumers. This is because they will have access to more information, lower prices and more choice.

Ideally, third-party apps will begin to have an increased (or perhaps proportionate) level of market access and transparency to that of Google and Apple over the next several years. This would greatly encourage innovation and growth in the market.

“Ultimately, such solutions would be an important first step in balancing the influence of Google and Apple with that of third-party application developers. Says Eva Akhter, the current owner and CEO of 48 Cubes Inc. Akhter, who is known to increase customer lifetime value and UX optimization credentials, also believes that increased competition on platforms will be. healthy for the world market.

Over the next few years, government lawmakers around the world are likely to prioritize the introduction of certain legislative measures that aim to “level the playing field” – increasing transparency and industry competition, and reducing its barriers to entry in a holistic way.

The application development industry

Between 2013 and 2021, Google’s App Store paid its app developers nearly US $ 900 million, with Apple’s App Store distributing around US $ 5 billion.

After taking into account the total number of developers over that time period, that works out to around $ 6,000 per developer, although (of course) the top-performing app developers on the market unsurprisingly reaped the vast majority of financial benefits.

If you are currently interested in launching your own app, you’ll want to make sure you spend significant time: a) deciding the nature and structure of your app specifics, b) deciding what marketing initiatives you’ll use to propel the popularity of your app, and c) decide how exactly you will develop your app (are you going to hire third party app developers?).

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