The above cases in the smartphone app market respectively come from different cat-egories, such as games and communication. These apps are ever or still popular over smartphone users worldwide. To find out their success factors, each case is analyzed from the viewpoints of external environment and internal strength. In Figure3.11, four app cases are located in specific quadrants of the analytic matrix. The vertical dimen-sion evaluates the intensity of the competitive environment. Usually intense competition results in more divergent products in that app category. The horizontal dimension shows the level of core strength in the early stage of app development. With superior strength, it’s more applicable to offer an innovative service.
3.6.1 Competitive Environment
Base on the analysis of the threat of new entrants and substitue products, the two app categories, games and photo & video, face high competitivity in the app market. The nature of these app categories make them easier to get popular. And the maturity
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Figure 3.11: Case Study Matrix
of their complementary technology leads to the growth of user session. Therefore, the following potential revenue is high and attracts more new entrants in another field or in the same field but on different platform. While satisfying human potential need for relationship, some substitute products like social networking apps are going to mitigate the predominance of games apps. They could also cut into the market by making a variation or extension on the original function.
On the contrary, the other categories have relatively low environmental competitivity.
For productivity apps, the market is limited to a specific group of people and perfor-mance requirements are demanding. Once users accumulate rich information in the cloud storage, the switching cost in data migration would reduce their desire on sub-stitute products. Even if the communication market has high potential revenue, new entrants are still stopped by the initial investment in acquiring enough user base. The friend group in the contact list also keeps users’ strong loyalty on the existent app.
3.6.2 Core Strength
Core strength is the key feature that makes users unconsciously addicted to an app.
As a game app, it’s difficult to determine the intuitive interaction model and seamless
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learning cycle for users worldwide. Based on previous game development experience, Angry Birds successfully designed an engaging user interface that users cannot stop interacting with it. To provide a structured repository of all the thoughts and memories, Evernote rethought its service and invented an external brain for everyone. With the utility app, users possess intelligence around important things by cross platform capture and retrieval over their miscellaneous information.
Under limited resource and tight schedule, Instagram and LINE fully reuse available open projects to build their software architecture. What they lure users are not the state-of-the-art technology but the minor value-added service. For instance, Instagram’s users do appreciate its aesthetically pleasing photography while LINE ’s really love these cute emoticons used in instant messaging chat with friends. As a result, despite the fact that the core strength of the two apps is not outstanding, they still won over customers by making the key feature even better.
Chapter 4
Integrated Analysis of App Cases
4.1 Market Environment
With the four app categories mentioned in the previous chapter of case analysis, it’s time to analyze the characteristics of these categories from the market viewpoint. In Table4.1, there are various aspects under consumer behavior, competitive impact, techical and financial requirement. The result table clearly shows the positioning of each category in the app market and helps new entrants quickly decide whether to enter the market segment or not according to their handy resource.
Table 4.1: Market Environment
4.1.1 User Loyalty
The level of user loyalty mostly depends on social relationship and demand satisfaction.
For communication apps, users care more about their friends in the communication platform rather than the app function itself. On the contrary, productivity app users
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are practical and look for the app best suited their need. Once they find the desired one, few would spend time trying another similar products. So, the app categories with strong user loyalty could provide value-added service to encourage users to invite more friends, or focus on the underserved population with satisfactory features.
4.1.2 Product Diversity
Since competitive process reflects the market force of demand and supply, it ultimately encourages product diversity and thus is of benefit to the public. To allocate scarce resources efficiently in the mature app categories like games and photo & video, devel-opers are prone to make a little variation on most recent app. They could soon cut into the market segment and increase revenue generating opportunities by providing similar apps. Under such intense competitive environment, cross-category integration is one way to stand out in the app store. For example, Draw Something, a social gaming app, succeeds using social cooperation rather than game competition.
4.1.3 Professional Demand
Some app categories are utility oriented, such as productivity and photo & video. Their target customers are hard to please but show willingness to paid apps. Developers could look into customers’ needs with a view to make the key feature best in the field. Since mobile users always care about the convenience, the app design cannot deviate from the principles of simplicity and speed. These functional apps usually have relatively small market size and thus low potential revenue. While few enterprises would target the app categories, there is a chance for independent developers to prosper with their own innovative ideas.
4.1.4 Investment Scale
For communication apps, market share is built on the amount of user base. As more users rely on the communication media, more extensible services could be implemented on it. Since the market entrants usually take aim at a long-term platform strategy, they would plan the large-scale architecture at the start and invest a lot in the fundamental construction, such as servers, database, and network bandwidth. Therefore, only the enterprise with sufficient funding would like to challenge such scale economies in the market at a low marginal cost.
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