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Cashing in on iPhone and the Mobile Applications Revolution

Cashing in on iPhone and the Mobile Applications Revolution. iPhone, iPod Touch : Truly a breakthrough platform Brilliant imagination and execution To date – 17 mil iPhones 13 mil iPod Touch 4 billion people with mobile phones

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Cashing in on iPhone and the Mobile Applications Revolution

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  1. Cashing in on iPhone and the Mobile Applications Revolution iPhone, iPod Touch: • Truly a breakthrough platform • Brilliant imagination and execution • To date – 17 mil iPhones 13 mil iPod Touch • 4 billion people with mobile phones • 6 billion potential with devices like iPod Touch and iTablet (?) • Mobile content platforms are here to stay • Social “interactive” gaming will drive growth Reprint by permission of iPhonAsia

  2. The Competition At last count the App Store had: • 11,735 developers • 43,465 published apps • 1,000,000,000+ app downloads iPhonAsia

  3. MOS share ofAbMob “ad” requestsSource: AdMob - March 2009 iPhonAsia

  4. iPhone users are just different Source: iSupply ConsumerTrak Survey – Oct 2008 iPhonAsia

  5. Chaos & OpportunityVideo interviews with Trip Hawkins and Omar Hamoui • CNBC interview – Trip Hawkins • GigaOm interview – Omar Hamoui iPhonAsia

  6. Mobile Ad Market Mobile advertising projected to reach $19 billion by 2011, up from $3.9 billion in 2008 iPhonAsia

  7. What has AdMob learned aboutiPhone/iPod Touch owners? • Surprised by strong and growing ad activity in mobile apps vs. Web (big eye-opener) • The majority (about 55%) of AdMob ads via iPhone/Touch come through mobile apps. • Ads delivered via iPhone/Touch represent 22% of AdMob’s entire business iPhonAsia

  8. Global handset data - share of requests on AdMob network:March 2009 iPhonAsia

  9. U.S. Smartphones – Share of requests on AdMob networkMarch 2009 iPhonAsia

  10. iPhone helping to dramatically grow mobile ad “click throughs” Omar Hamoui – CEO, AdMob: • “iPhone and iPod Touch platform represents about 5% of Net connected mobile handsets … but 10Xs more usage = 50% of the total activity” • “AdMob serves about 2 billion ads per month on iPhone/Touch … growing at 20% per month” iPhonAsia

  11. Android shows similar usage patterns to iPhone Om Malik: “Who else might be a runaway success like iPhone?” Omar Hamoui: “Android or Blackberry … Usage patterns (high) on Android devices are similar to iPhone” iPhonAsia

  12. Why you need to keep an eye on Andriod… • It’s Free - Google’s free open-source Linux software. • No Licensing fees - OEMs such as HTC, Samsung or Levono do not have to any licensing fees. • Custom MOS - Carriers such as China Mobile can modify Android and build their own mobile operating system (MOS). iPhonAsia

  13. User Trends and Challenges • Sorting through apps - Users may need help finding their own apps on 8 pages (148 apps) • “Snacking” - Users tend to use an app for a couple of weeks and then move on to the next thing iPhonAsia

  14. How do you to prevent “snacking”?Provide a deeper experience = Repeat usage … Apple is heading in that direction with the new “in app” payment systems … There are subscriptions now and virtual goods.” Omar Hamoui, AdMob CEO: “Right now app developers are competing based on installs … they’re going to have to start competing based on repeat usage. iPhonAsia

  15. Get the user “involved” = repeat usage = more ad revenue + sale of virtual goods + upgrade to premium (paid) version of the app. More immersive social gaming apps (e.g. virtual Poker) or other kinds of games where you buy value-added virtual goods. iPhonAsia

  16. App Store Case Study – iBokan Galaxy Impact Paid versus “Free” App iPhonAsia

  17. Galaxy Impact downloads climb until the app began charging $.99 iPhonAsia

  18. The downloads for Galaxy Impact in its first two weeks, broken down: iPhonAsia

  19. Lessons Learned • Ratio of free downloads to paid downloads was 400 to1. • It’s obvious there was no way we could make money with a $.99 list price. “Before the price change (from free to $.99), average downloads per day was above 10,000, but after price changed back to free, average dropped to about 1,000 per day … If we had not experimented with charging for the app, the total number of downloads would have been much higher.” iPhonAsia

  20. Change to “embedded ads” business model • We decided to update Galaxy Impact and go with an advertising model with AdMob. • After the update there was a huge spike in downloads … with a peak of 30,647 two days after the update release. iPhonAsia

  21. Galaxy Impact Ad Revenue for the month of January 2009 With no update or marketing, the current rate of free downloads for Galaxy Impact is about 120 per day … Ad revenues are averaging a bit less than $200 per month iPhonAsia

  22. iBokan Conclusions in this case study 1. Free downloads vs paid downloads ($.99) is 400:1 2. If you decide to go with ad support, do it from the very beginning.

3. Ad revenue in the long run is higher than sales revenue. iPhonAsia

  23. Bo Wang, CEO iBokanTips for Developers • For beginners, it's more of art than of engineering. Creativity wins. • Marketing is a big part of winning process and a lot people don't realize it. • It's premature to think your app will fly when it's approved in iTunes. • Manage your expectations. It's rare to create an instantly sensational app. iPhonAsia

  24. Case Study – Flash-Me iPhonAsia

  25. Flash-Me Quick Hit Success Story • Jake Nolan – a 16-year-old HS sophomore designs Flash-Me ($3.99), an iPhone application for education flashcards. • In a little over a month since launch Flash-Me has over 50,000 flashcards in the inventory, now being sold in 82 countries. • Jake estimates revenue at $30,000 the first year and $100,000 and $200,000 in years two and three. • Jake’s motto – “Go big or don't go at all.” • Jake's father jokes that his son forgets he is in 10th grade iPhonAsia

  26. iPhone in Enterprise“If the iPhone were meant for work, it wouldn't be so much fun to use, would it?” • April 2009 - Forrester Research *gasp* recommends the iPhone for enterprise • BlackBerry vs. iPhone, side by side iPhonAsia

  27. Thank you –Visit iPhonAsia for everything related to iPhone in China and the Pacific Rim Recent videos posted on iPhonAsia: • Chaos and Opportunity - interview with Omar Hamouri, CEO AdMob • “Trip” – iPhone and gaming apps - interview with Trip Hawkins, CEO Digital Chocolate • The allure and reward of novelty apps - Wall Street Journal’s Andy Jordan iPhonAsia

  28. New iPhone in June?iTablet by the Fall? … Oh Please, oh Pleaseee! iPhonAsia

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