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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4.2 Product Strength
Each successful app in Table 4.2does gain competitive advantage from certain product attributes. These features are closely related to the specific demand of different app category. For instance, a well-designed gaming app needs no tutorial and its loading time is minimal so that customers could enjoy playing for little pockets of time. While finding out the critical success factors and what’s important to target customers, developers can make the best use of their limited resource on the product core value.
Table 4.2: Product Strength
4.2.1 Perceived Value
The perceived value of product is determined by the nature of its function. Since mobile apps mostly emphasize the level of convenience, users prefer the app which well inte-grates cloud-based storage and services. And the subscribtion model encourages users to accumulate their invaluable personal information over the cloud space and thus allows developers to charge fee for additional functionality. By turning mass information into structured handy one, Evernote hits the point where it can be described as an external brain of people. Through these ways, the app successfully builds a long-term relationship with customers and leads to an increasing perceived value in their mind.
4.2.2 Emotional Need
Social networking is the key to satisfy human emotional need. Both Instagram and LINE kind of catch customers’ potential desire for sharing and concern. No matter how excellent Instagram’s photo effect filters are, people aren’t addicted to it without the photo sharing feature. With the introduction of smartphones having improved cameras,
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photos are becoming a popular way to start a conversation online. Besides, communica-tion is always the best path to emocommunica-tional exchange but how to faithfully express inner thinking is another lesson. To comfort emotional distress during Japan’s disasters, LINE allows users to communicate via the Internet instead of the disrupted phone lines.
4.2.3 User Experience
User interface is like a web portal such as Yahoo! that brings diverse information in a unified web page. In the app gaming market, users’ reaction is immediate and direct because their purpose is for fun and entertainment. They won’t spend time in understanding how to play the gaming app given that there are a lot of free ones available online. To hook users at the first glance and keep their interest on the game, an engaging user experience plays an important role in Angry Birds’ success. The app strikes a balance between intuitive user interaction and challenging gaming content.
Through its well designed learning model, there is even no need of local guidelines for different languages.
4.2.4 Cross-Platform Support
If the app function is not closely combined with the smartphone device, cross-platform support would be the next must-have in the product feature list. Here comes a relative question. What’s customers’ preferred technical device as they are at home? Computers might be the answer because of larger screen and better input experience. By expand-ing LINE from smartphones to personal computers, static users on Windows and Mac operating system can conveniently send a message to mobile users. This feature not only links the communication between outdoor and indoor users, but also acquires the market share of traditional instant messengers like MSN.
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4.3 Competitor Impact
Knowing all about the competitors is as important as having specific product knowl-edge. Market entrants need to identify and assimilate existent rivals’ strategies before they make business-critical decisions. In concentrated industries such as app market, competitor analysis becomes a vital part of strategic planning. The goal is to understand competitors’ strengths and weaknesses, and further assess how they might react to new products. In the following, each app case mentioned before would be compared with one major competitor in the same category. General statistics [21] are based on public data of Google Play on December 2012. By using the five-star rating system, total ratings measure the total number of active users rated for the app on the app store.
4.3.1 Fruit Ninja vs. Angry Birds
Figure 4.1: Fruit Ninja Fruit Ninja developed by Halfbrick Studios in Australia is
a popular fruit slicing game that offers the sensory satisfac-tion of touch screen fruit destroying. Users can swipe their finger across the screen to deliciously slash fruit in half like a true ninja warrior. Extra points are awarded by slicing multiple fruits at one time and using additional fingers to make multiple slices simultaneously. The game has seen
over 300 million downloads by packing a simple one-screen concept – slice the fruit and avoid the bombs.
4.3.1.1 Overall Comparison
Figure 4.2: Android App Ranking in Category Arcade Game, by Total Ratings
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In Figure 4.2, there are ten top gaming apps by total ratings. As the number of app installation reaches a meaningful amount, average rating is more positively related to total ratings. Since digital distribution gets a game into consumers’ hands quickly, sequels of popular gaming apps usually fall flat. In addition, smartphone gaming needs merely a handful of minutes whereby one can play it during commute or waiting. To make people accustomed to the game, both Angry Birds and Fruit Ninja adopt iterative processes as another kind of sequel. Angry Birds is also the only game that has over 100 million number of installation. It’s difficult for a gaming app to keep such strong momentum after accumulating so many users.
Figure 4.3: Average Rating of Angry Birds vs. Fruit Ninja
As shown in Figure4.3, the average rating of Fruit Ninja is always behind Angry Birds’
in the App store. The rating represents customer satisfaction about the app. The higher the rating the better satisfaction on the app. The two curves are finally parallel so that there is a persistent gap between them. In the smartphone gaming realm, less is more and thus all popular games are so simple to play. However, oversimplification might reduce the fun of playing game. For example, slashing the fruit is the only way to play Fruit Ninja without need for adjustment of angle and speed. The leading role, fruit, also limits the possibility of variation in the game.
4.3.1.2 Special Finding
In Figure4.4[22], interest for Angry Birds grows with age while the level for Fruit Ninja reduces. Furthermore, the age groups that are above 15 prefer Angry Birds. Only people under 15 years old are more interested in Fruit Ninja. It shows that the game complexity of Angry Birds is more suitable to adults. Even though both games are low maturity in the app store, there is still significant difference in their design and story. Another survey asks if users are willing to recommand the app to their friends. Once again, more respondents would recommend Angry Birds rather than Fruit Ninja to friends. After initial marketing of the app, word of mouth which truly reflects the app quality plays the key role to popularize the app.
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Figure 4.4: Which one is your favorite? Fruit Ninja or Angry Birds.
4.3.2 Foursquare vs. Instagram
Figure 4.5: Foursquare Foursquare in Figure4.5is location-based social networking
platform that is rapidly gaining popularity on smartphones.
Users can check in to locations which are then published to social network like Twitter and Facebook, and see if their friends are at nearby places. Users can earn some badges as they visit enough locations or the same spot several times.
By updating status at a location enough times, they could
further become a mayor of that spot. The service also allows users to submit tips and notes about locations through its review system.
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4.3.2.1 Overall Comparison
Both Instagram and Foursquare were created as mobile apps first and hit the trend of the largest mobile social network where the majority of user activity is from mobile devices.
As Instagram in the beginning only exists on iPhone, Foursquare is a year older and is available on every major mobile platform. However, Figure 4.6 shows that the total ratings of Foursquare is far behind that of Instagram. While Instagram is adding 10 million users in 10 days and smartphones have become even more common, Foursquare hasn’t proven its ability to rocket the user count. Even though Foursquare is one of the rare social network services that has an actual business model, the app has few threat to its competitors.
Figure 4.6: Android App Ranking in Category Social, by Total Ratings
Figure 4.7: Average Rating of Instagram vs. Foursquare
Instagram released the Android version in April 2012 as shown in Figure 4.7. Based on its beloved iPhone version, the average rating of Instagram Android starts with higher value than Foursquare’s. The result reflects that by focusing on photo-sharing feature, Instagram’s success on certain mobile platform could be replicated into another competitive one. From a long-term point of view Foursquare would have a vast amount
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of historical data that is more valuable than anything Instagram can come up with.
When these data is put together, it can tell the story why a location is popular and what people think about the place. But the biggest problem for Foursquare is that not so many people seem to use it. According to AppData, 3 million people share Foursquare data into Facebook every month while the number is 11.5 million for Instagram.
4.3.2.2 Special Finding
Figure4.8displays the worldwide web search interest of Instagram and Foursquare from January 2011 to December 2012 [23]. Numbers on y-axis represent search volume relative to the highest one which is always 100. The two apps start acquiring similar level of attention in the latter half of 2012. After Instagram confirms plans for Android app at point G in the end of 2011, the search volume difference between them becomes larger over time. Point E represents the peak search volume at the time that Facebook buys Instagram for one billion dollar. Since social app is built on user base, the more people are curious about it the more smartphone users would give it a try.
Figure 4.8: Web Search Interest Worldwide 2011-2012, Instagram vs. Foursquare
4.3.3 WhatsApp vs. LINE
Figure 4.9: WhatsApp As a multi-platform instant messaging app shown in
Fig-ure 4.9, WhatsApp has enjoyed tremendous popularity among youngsters. It’s because WhatsApp offers faster and cheaper messaging compared to Simple Message Ser-vice (SMS) to SMS-addicted teens. With the introduction of group chatting, it also provides real-time social interac-tion. WhatsApp is now delivering more than one billion messages a day on six different mobile platforms. While
competitors go free for broader distribution, WhatsApp still charges and becomes the number one paid social networking app in the Apple App Store.
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4.3.3.1 Overall Comparison
In Figure 4.10, WhatsApp is the top app that has around 100 million installs and still maintains impressive reputation. On the other hand, LINE is catching up through its value added services like voice calls over the Internet and attractive stickers. Since the ranking is based on Android mobile devices, the installation number on other devices is not taken into account. While WhatsApp is available only for smarphones, LINE further expands its capabilities and scope by offering application for Windows and Mac desktop. LINE users can then continue their conversation on the computer without having to touch the smartphone and synchronize with it. Even though WhatsApp is the most popular app to date, the potential of LINE should not be ignored.
Figure 4.10: Android App Ranking in Category Communication, by Total Ratings
The average rating in Figure4.11shows customers’ level of satisfaction on the app over time. Given the steady and high quality of WhatsApp, the app has been able to charge because of its clean and focused feature. Although the target of both apps is young peo-ple, users found that LINE is more interesting by providing some other complementary applications, such as LINE camera to decorate photos with cute and hilarious designs.
In addition, some security features are not easily perceived by customers. When receiv-ing a message from a stranger, a simple question askreceiv-ing if users want to add or block that person is important. For this part, LINE has more protection than WhatsApp.
Figure 4.11: Average Rating of LINE vs. Whatsapp
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4.3.3.2 Special Finding
As a great example of carrier innovation, texting turned 20 years old in 2012. Text messaging has become incredibly popular around the world, but it’s not alone in the short message service (SMS). Cross-platform mobile messaging apps allow users to exchange messages without paying for SMS. Under such competition, carriers’ high-margin texting revenue keeps dropping. Figure 4.12 shows that the percentage of active iPhone users on different messaging apps in every country [24]. As seen in the chart, Whatsapp has dominant marketshare in most European countries while LINE is actively used by 44 percent of iPhones in Japan. As a whole, WhatsApp is clearly the biggest messaging app on iPhones.
Figure 4.12: Global Messaging App Market
4.3.4 Dropbox vs. Evernote
Figure 4.13: Dropbox Dropbox provides services for syncing files, backups, and
storages. By synchronizing with Dropbox server, it keeps one folder on computers, smartphones, and website. With the Dropbox app in Figure 4.13, users are able to access handy files no matter where they are. All the photos and videos made by smartpones could be easily uploaded to Dropbox and then edited from the phone. Customers could
further share these files freely with family and friends. To be online photo repository, Dropbox app offers the feature that automatically uploads full-size copies of photos to extra cloud storage space over Wi-Fi or data connection.
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4.3.4.1 Overall Comparison
Both Evernote and Dropbox specialize in keeping data in sync across multiple digital devices over the Internet. They seem to offer the same sort of basic features and thus cause confusion as to which one is better for productivity improvement. In Figure4.14, the two services have similar installs but Evernote has superior performance than the other according to the total ratings and average rating. While Dropbox focuses on file storing and sharing, Evernote deals primarily with information content and allows users to take notes in serveral ways like recording and web clipping. The latter further supports reliable optical character recogniton (OCR) to translate handwriting or text in pictures into searchable notes. With additional powerful features, there is no doubt that customers are more satisfied with Evernote.
Figure 4.14: Android App Ranking in Category Productivity, by Total Ratings
Figure 4.15: Average Rating of Evernote vs. Dropbox
In Figure 4.15, there is a critical cross point made by the average rating of Evernote and Dropbox on February 24th 2012. It’s because Dropbox v2.1 is available in the Android Market on that day. To solve one of so-called hidden problems people have with technology, Dropbox wants to help customers keep all their photos from different devices in one place. The official release would automatically uploads photos and videos in the background using Wi-Fi or data plan. Since the new feature will consume a larget amount of limited cloud storage space, Dropbox gradually adds up to 3 GB of free space for uploading photos automatically. However, other products like iCloud already provide
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the same service and Dropbox doesn’t offer related tools to manage or edit these photos.
Compared to Evernote’s growing average rating, this half-baked functionality results in the dropping and unstable average rating of Dropbox.
4.3.4.2 Special Finding
According to the Cartmer research, free apps account for 89% of all downloads in 2012 and the pricing trend will only become stronger. That is why freemium, the combination of a free product with paid premium features, comes out as another practical revenue startegy for app developers. In the competitive app market, the model is appropriate for the productivity app whose users tend to put more personal information into it. In
According to the Cartmer research, free apps account for 89% of all downloads in 2012 and the pricing trend will only become stronger. That is why freemium, the combination of a free product with paid premium features, comes out as another practical revenue startegy for app developers. In the competitive app market, the model is appropriate for the productivity app whose users tend to put more personal information into it. In