More than half of smartphone users in the Mena region say they intend to pay for mobile applications over the next 12 months.
Mena smartphone owners intend to buy more apps
More than half of smartphone users in the Middle East and North Africa (Mena) region intend to buy mobile applications in the next 12 months, representing a growing revenue stream for regional developers.
About 24 per cent of smartphone users claim they will spend more than US$50 (Dh183.64) on apps in the next year, according to the AppsArabia Mobile Report published yesterday. While sales of apps in the Mena region are lower than in markets such as the US, 35 per cent of smartphone users have already paid for finance-related applications, the study noted.
But the region still lags behind other markets in its willingness to pay for applications. In the US, 93 per cent of app-downloaders would be willing to pay for a gaming application, according to a study by Nielsen.
David Ashford, the general manager of AppsArabia, an applications investment fund based in Abu Dhabi, said consumption of apps "is growing at a fantastic rate".
However, he added that a reluctance to use credit cards in online transactions was one reason smartphone users in the Mena region might be less willing to pay for applications.
"There are multiple reasons why people don't buy things. It's not just their attitudes, it's also the payment mechanisms, for example," said Mr Ashford. "It might be the case that they want to, but they can't."
Mobile applications, made popular by the likes of the Angry Birds game, are sold in online stores such as Apple's App Store and BlackBerry's App World.
The global apps business is expected to be worth $25 billion within four years, a study by MarketsandMarkets showed. Apps typically cost under $10, but some more complicated software sells for hundreds of dollars.
Mr Ashford said one initiative that would boost sales of applications in the Mena region was direct billing by mobile carriers, which allowed consumers to buy apps and be billed directly to their mobile-phone account.
"That's the one thing holding back this region, the consumer-payment mechanism," said Mr Ashford. "I think this is the floodgate. When carrier integration is live across as many of the telcos as possible, and as many of the regions as possible, the consumer is suddenly able to pay for things." Nokia, the Finnish handset manufacturer, has launched a direct-billing initiative with Etisalat, and other handset manufactures are also in negotiation with regional telecoms companies.
Mike Al Mefleh, the Middle East director of product management for Research In Motion (RIM), said the company was in negotiation with "all carriers" in the Middle East region over direct billing for BlackBerry apps.
"The plan is to offer this some time this year," said Mr Al Mefleh. "We're working with everybody. It depends on the preparation of the carriers to be able to take advantage of that."
The BlackBerry App World has 2,000 applications available in the Mena region, compared with 30,000 worldwide, Mr Al Mefleh added.
BlackBerry said this month it had added a million new customers in Europe, the Middle East, and Africa in just three weeks.
Dan Healy, the chief executive of the research firm Real Opinions, said piracy was a problem in parts of the region. Pirated apps were often less reliable than legitimate software, he added. "Smartphone users in North Africa and the Levant have a higher propensity to download apps from unofficial pirated websites. But they also said that they had more issues with apps, and are more likely to delete them [due to] issues with functionality," Mr Healy said.
The first AppsArabia Mobile Report surveyed almost 3,000 people over the internet, and was conducted by Real Opinions, and sponsored by RIM, which makes BlackBerry handsets.