Business ideas for 2012: Mobile apps

Why is it so promising?

Everyone with their eyes wide open knows the mobile app industry is growing at an explosive rate. In 2010 Apple’s App Store sold 4.5 billion apps, while over 10 billion apps were downloaded. According to global market intelligence firm IDC, 183 billion apps will be downloaded by 2015 – that’s 26 apps for every person on the planet.

The immediate prospects look particularly exciting. According to Paul Skeldon, author of the seminal book on the topic, M-Commerce: “The app market is going to continue growing in 2012. More people have smartphones; there are more different types of smartphones creating different app markets; and we may possibly see a new apps market through things like Apple TV.

“More and more people are embracing the app. It’s no longer the preserve of young, well-heeled early adopters. Just watch the TV and you’ll see more and more mainstream brands advertising their apps. It won’t be long before you see them around older demographic TV programmes.”

In addition to huge demand, the market presents relatively low barriers to entry. App development is significantly cheaper than many other tech businesses, and you don’t necessarily need to hire staff; all you need is a computer and expertise. And, if you can get on the App Store or one of its equivalents, you won’t face the costs usually associated with international expansion.

What are the specific opportunities?

First off, there are two key opportunities. On the one hand, you can create an app and launch it on one or more of the available platforms. Alternatively, for those that have created apps already, there’s the chance to set up a development business to offer others your expertise.

In terms of popular app types, Paul Skeldon says: “Gaming apps are still the most popular type of app, the biggest sellers and the most widely used. This reflects the fact that apps are still really a young people’s medium. However, the big gaming companies such as EA Sports appear to have this area sown up. Rovio did 48 different games before Angry Birds became a success – that gives you an idea of how hard it is to create a viable gaming app.”

Mobile retail apps might present a more promising opportunity, given the recent explosion in mobile commerce. According to IBM, 11% of all online sales were made from a mobile phone in 2011, and the major retailers are reaping huge benefits from app development. In fact, by December 2011 the eBay mobile app had been downloaded 50 million times.

Drawing on his own experience in writing M-Commerce, Skeldon says: “Mobile retail is cheaper (than conventional games), and it’s more of a level playing field. Personally I think the main app opportunity involves something that aggregates the retail experience, as you see with price comparison resources. Amazon does it really well – you can buy pretty much anything through their app, and it’s actually easier to buy through their app than through a website.”

Who’s doing it?

Alistair Crane, CEO, Grapple Mobile

“We started up in early 2010, and our vision wasn’t specifically to focus on mobile retail. We were relatively agnostic, we just wanted to work with large brands. It’s the market that’s pushed us into m-retail, and we’re now a specialist in this area.

“Over the last two years we’ve done close to 100 mobile apps, working with the likes of the Post Office, driving currency exchange sales, and McDonalds, which is using apps to drive promotions using location-based services. We’ve been recognised by the likes of the Startups Awards (where Grapple was named Mobile Business of the Year in 2011) and the Mobile Entertainment Awards, which is great.

“Every app is different, but there are some common features, which can be divided into two key categories: explicit, which users can see, things like vouchers and social network integration; and things that users don’t see, like in-app analytics which enable clients to track all the data from all their apps.

“Mobile retail apps are really popular for several reasons. Brands are getting more into the idea that there is a reason to treat mobile differently to in-store retail, and we’re seeing an increasing tendency for our clients to deliver offer-specific promotions through mobile apps. Starbucks, for example, has been offering extra shots of coffee to app users. Also, apps are trackable, and provide an ongoing one-to-one connection with your customer base. You’re not intruding on them; because they’ve downloaded in, they’ve opted in to your offering.

“With things like discounts proving ever more popular, retail apps are going to see increasingly demand in 2012.”

If you have a fair amount of technical know how, or an awesome idea for a mobile app, read our full-length guide on how to start a mobile apps business.

Published Jan 2012