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iPhone OS apps on display. It takes both perseverance and luck to succeed in the market. Tony Avelar / Bloomberg News
iPhone OS apps on display. It takes both perseverance and luck to succeed in the market. Tony Avelar / Bloomberg News

Appily ever after, for some

The Life: Downloads of apps reach well into the billions, but it takes more than just a great idea to succeed in the fiercely competitive market.

Apps are big business. Apple recently announced its 50 billionth download since the App Store launched in July 2008 with US$9 billion paid out to developers in the same period.

With figures like that it's no wonder the Global App Summit in Dubai this month was thronging with developers, designers and entrepreneurs all hoping to crack the creative code to software success.

However, statistics show it takes more than a great idea to succeed in the app market.

According to Feroz Sanaulla, a former executive director of Intel Capital, now a UAE-based entrepreneurship and innovation adviser, on average a developer has 4.6 apps in his stable and out of nearly 10 billion apps sold, the average return per app is $8,700.

"The top 1 per cent of apps receive 50 per cent of downloads. Sixty per cent of apps don't get downloaded at all and more than 90 per cent of downloads come from the top 25 on the app store," he says.

The problem for the app business, it seems, is to get your app noticed and, once noticed, then bought.

But with most apps given away for free, the developers rely on in-app purchases or advertising revenue - both hard to come by if no one's actually downloading the app.

"The invisibility factor out there is huge. You have a very choosy market and yet you are anonymous to them," says Mr Sanaulla.

There are two dominant players in the hardware market: the iOS platform run by Apple on which 56 per cent of apps offered are free, and Android, where 72 per cent of apps are free, industry figures reveal.

The two players account for about 80 per cent of the market with at least five other players, including BlackBerry and Microsoft, fighting over the remaining 20 per cent.

It leaves developers little choice but to create apps for the players with the biggest market share and battle to get noticed.

Tamer Alaa, an Egyptian telecoms engineer, has been developing apps for three years. His latest, shoplog, keeps a diary of the online sites users have visited, allowing them to select their favourites, compare with other sites and share their preferences.

He cites the buying of bridesmaids' dresses as an example of how the app works best; the dresses are perused online and shared with a number of people, showing a number of products over a host of sites.

Mr Alaa says marketing is the top challenge in app development.

"It is the most expensive and exhausting thing about app building," he says. "The most important thing is creating a loyal customer, somebody who is actually using your app, not just opening and closing it. A game is often played in your downtime, a news app will be used in the morning or the evening. But creating stickiness is crucial so you know where you stand compared to the average."

It's big global success stories such as Rovio's Angry Birds - launched in 2009 with more than 50 million downloads last year alone - that keeps fledgling app builders motivated. According to Rovio, on the iPhone alone the game, at its peak, accounted for more than 100 million minutes of viewing per day.

Rovio has refreshed the game with new free themed levels retaining 80 per cent of its players. For the three Finnish students behind the success, Angry Birds has catapulted them to a company valuation of $8.6bn.

But the game was one in a long list of loss-making apps; in fact it was Rovio's 52nd app. It had a losing streak of 51 before its irate avians took the world by storm.

So how can app developers get themselves noticed?

"The big guys will be visible and survive, but there is a difference between survive and thrive and you can thrive in a smaller marketplace," says Mr Sanaulla. "You don't have to be a $100bn company, you can be a very successful $10 million company but the strategy has to be in place. Your war chest should have many tools to get to that point such as a marketing strategy, a media strategy, word of mouth strategy etc. Relying on one guy telling his buddies is no strategy at all."

While being visible and indispensable are important, it seems being lucky is even more so.



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