Sectoral Analysis : Mobile Application Industry Submitted By : Sagar Deshmukh Birla Institute of Management Technology (BIMTECH )

“Smartphone users spend 87% of their time using mobile apps. iPad users spend 76% of their time using mobile apps” “We are currently entering a new phase of rapidly-diversifying smartphoneuse -and people are looking for apps across all sectors of society. “ - IDC

Indian Mobile Users  India has the second largest mobile base in the word, with a subscriber base of nearly 933 million in FY14.  India Stood third highest in terms of total number of internet user with million internet subscription.  Seven out of eight user uses internet from their mobile phone.  Urban teledensity stood at per cent and rural teledensity at per cent as of March 2014, up from 87.1 per cent and 23 per cent, respectively, in March  Availability of affordable smartphones and lower rates are expected to drive growth in the Indian telecom industry and mobile application sector.

 Telecom penetration in the nations rural market is expected to be 70 % by 2017 from 41% in march  Telecom infrastructure is expected to increase at a CAGR of 20 per cent to 571,000 towers during 2008–15.  The Indian Mobile Value-Added Services (MVAS) industry is expected to reach USD9.5 billion by 2015 from USD4.9 billion in 2012 Indian Mobile Users

Growth Drivers  Rising Income level fuels demand.  The IMF forecasts income to expand at a CAGR of 5.7 per cent to USD1,869.3 during 2013–18.  The emergence of an affluent middle class is triggering demand for the mobile and internet segments.  A young, growing population is aiding this trend (especially demand for smartphones).  Increasing Internet Revenues and Subscriptions.

Indian residents shifting from low to high income groups (%) Source: McKinsey Quarterly Report, Aranca Research

Smart Phone User in India  Out of total Indian population 1 in every 120 are smartphone user.  95 % of smartphone user search local information through their phones.  91 % of smartphone users research their product via their phone.  54 % of smartphone users made their purchase vis their phone.

Smart Phone Purchase in India

Trend of Operating System

Internet Revenues  Total internet service providers’ revenues expanded at a CAGR of 12.2 per cent to USD2.2 billion over 2009–12.

Mobile 3G Subscription In India  2 hours and 36 minutes is the average time that the mobile internet user spend each day.

CAGR 30.9 % MVAS revenues (in USD billion)  The Mobile Value Added Services (MVAS) industry is forecasted to expand at a CAGR of 30.9 per cent to USD9.5 billion by 2015 from USD1.1 billion in  A decline in the prices of smartphones and data subscription rates is likely to drive demand for MVAS Source: Wipro Technologies, The Internet and Mobile Association of India, Aranca Research Increasing Internet Revenues and Subscriptions

Free Downloads 57,33192,876127,704167,054211,313253,914 Paid-for Downloads 6,6549,18611,10512,57413,48814,778 Total Downloads 63,985102,062138,809179,628224,801268,692 Free Downloads % Source: Gartner Mobile App Store Downloads, Worldwide, (Millions of Downloads) Mobile Application Market  Free apps currently account for about 60 percent and 80 percent of the total available apps in Apple's App Store and Google Play.  iOS and Android app stores combined are forecast to account for 90 percent of global downloads in 2017

 It is been expect average monthly downloads per iOS device to decline from 4.9 in 2013 to 3.9 in 2017, while average monthly downloads per Android device will decline from 6.2 in 2013 to 5.8 in  This relates back to the overall trend of users using the same apps more often rather than downloading new ones.

Mobile App Store Revenue, Worldwide,

Mobile Application Market in India  The mobile application (app) market is expected to expand at a CAGR* of 70.4 per cent to USD100 billion during 2012–15.  The mobile app market is estimated to increase 9.4 per cent to USD22.1 billion in 2013 from USD20.2 billion in  The segment’s growth is expected to be driven by increasing mobile connections and availability of low-range smartphones.  Over 100 million apps are downloaded every month across different platforms such as iOS, Blackberry, Nokia, and Android CAGR 70.4 %

Mobile OS Market Share in India According to IDC,  Google mobile operating system Android has 91 % market share in the country.  Windows has 6 % market share in the country.  Apple iOS has 2 % market share in the country.

Breakthrough In Indian App Industry Indian Government has started rolling out a set of “ m- governance “application for android and java based phones through its own Apps Store. Flipkart,Amazon and Snapdeal launched their respective mobile shopping applications. Mobile Payments Break-through Cab services like Savaari, TaxiforSure,Meri cab,Red bus and Uber have launched their mobile apps.

Uber, Starbucks, Amazon, Flipkart,Booking.com and others have shown that it’s possible to shake up an entire industry by providing a differentiating and winning mobile experience. These organizations are driven by user experience more than anything else. This goes for Enterprise apps as well. Forrester reports that 90% of businesses will have corporate apps by Enabling employees with business applications give enterprises the opportunity to reduce operational costs, as well as improve profitability and competitive edge.

Numbers of Apps - Google Play Vs Apple Store Google PlayiOS

Top Categories of App being Download Source : Flurry

Top Categories on Google Play

Why the Mobile App is Needed When you have mobile app, your customers are just a swipe away from reaching your brand. 90 % Of Mobile searches carried out lead to actions. 50 % Of mobile searches leads to purchase.

 Time to market is less.  Ease of development.  User friendly and simple application are available.  Availability of skilled developers.  Faster and easy access to markets.  Favorable revenue sharing terms.  Fragmented market : Thousands of application developers.  Lacks of focus on single platform.  Developers need time to relearn as new operating system, new user interface,new functionalities and capabilities are coming.

 Growing market : High demand  New Applications 1) M- banking 2) M- health 3) M- shopping  Sales of virtual good and redemption of the coupons and promotions.  Mobile web browsers (eliminate need to download different apps )  Fierce competition  Average selling price decreasing  Carriers have control over the distribution of mobile games (will changes as economics shift,off-deck providers become stronger and to a lesser extent,ad-supported games emerge.)