Chapter 4: Research Findings
4.2 Findings of Strategies to Sustain Advantages in App Development
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their prices, including 28 game apps, two music apps, and a utilities app. The two music apps were Ringtone Designer Pro (Blackoutlabs, 2014) and TuneIn Radio Pro (TuneIn, 2014), and the utilities app was Flashlight®. Furthermore, 23 apps, including 22 game apps and a music app, could keep their advantages and still be listed on the top charts after their prices were raised. The only music app, Ringtone Designer Pro (App Annie, 2014), for instance, had raised its price from $0.99 to $1.99 between Aug 25 and Sep 18, 2010, but its ranking never dropped out of the top 20 in the period. Another example is Doodle God™ (App Annie, 2014), a game app, which had raised its price to $1.99 off and on, but it remained on the top charts. Therefore we formed the following hypothesis:
Apps could enjoy pricing advantages through established brand loyalty or the uncertainty risk of purchasing alternative products.
4.2 Findings of Strategies to Sustain Advantages in App Development Strategies to raise barriers to entering the market
Traditionally, first movers have performance that is superior to later entrants because they have slack resources to reinvest in R&D and innovation to sustain their elevated position in technological leadership. In the app market, the most common strategies of reinvestments in technology are publishing sequel versions and providing updates with feature improvements. Based on an examination of 120 apps, we identified 89 apps that updated continuously with new features, which did not include updates with support of new mobile operating systems and bug fixes (see Table 4-3). We found that among 64 game apps, 70% of them updated continuously, but among another 56 apps, more than 90% of them updated continuously. For example, Pocket God (Bolt Creative, 2014) has updated its product more than 30 times since it was first published in 2009. It regularly updates and adds new episodes that contain puzzles and exciting features. Shazam (Shazam, 2014) continuously updates on a monthly basis and releases new features and improvements for user experience. Shazam was just a music-recognizing app in its early stage, but it kept improving its functionality with later updates such as a new interface design, faster tagging and recognition, and the convenience of purchasing music releases. The continual updating of the app Camera+
(Tap Tap Tap, 2014) is another case in point—it has been downloaded more than 10
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million times. In addition, Camera+ has released more than 40 updates since the day it was published, and 12 of the updates were released in 2013, including new effects, borders, filters, and a more convenient interface design to improve users’ experiences.
Therefore, this study concluded that apps had the capability to sustain their advantages through updates, except for game apps, which had fewer updates than other apps. For example, Sims 3, which is published by Electronic Arts (Electronic Arts, 2014), has only been updated twice since it was published. Therefore we formed the following hypothesis:
Apps likely could sustain their advantages through raising the barrier to entry, except for game apps.
Table 4-3. Numbers of Apps That Continuously Update With New Features
Entertainment Games Music Photo &
Video Utilities Number of apps that
continuously update with new features
18 45 11 12 10
Total number of apps in
each category 19 64 13 12 12
Strategies to increase switching costs
This study reviewed the past literature and found that first movers could sustain their advantages through increasing switching costs. In the app market, the most common way to increase switching costs was to build brand loyalty. This study analyzed methods used by the 120 apps we identified as subjects to build brand loyalty.
From the analysis (see Table 4-4), we made the following observations. First, Twitter, Facebook, fan pages, and official Websites were the most-used ways to build brand loyalty. Facebook and Twitter were the most popular ways for game apps, but having an official Website was the most popular way for utilities and photo-and-video apps to build brand loyalty. For example, Halfbrick (Halfbrick, 2014) had 6.4 million likes on its Facebook fan page. It regularly shared news and interesting content such as photos of amazing fruit carving on its fan page. In addition, Halfbrick also had 188,000 followers on its Twitter page. Halfbrick shared its news and responded to people’s tweets on its Twitter account. People can follow the latest news about Halfbrick and its apps through the fan page and Twitter. Second, only about 15% of game and entertainment apps had peripheral products. Examples of app developers who did are Pocket God (Bolt Creative, 2014), which sold vinyl figures and t-shirts, iGun Pro
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(CafePress, 2014), which sold t-shirts and iPhone cases, and Angry Birds (Rovio, 2014), which sold toys, t-shirts, a theme CD, and a promotional DVD in its online store. Third,
~16–17% of entertainment, photo and video, and utilities apps had their own blogs, and about 30% of game apps had blogs. However, none of the music apps used blogs to build customer brand loyalty. Therefore we formed the following hypothesis:
It is likely for apps to sustain their advantages through maintaining Facebook fan page, Twitter, and official Websites.
On the other hand, it is unlikely for apps to sustain their advantages through blogs and peripherals.
Table 4-4. Results of Examination of Brand Building
Entertainment Games Music Photo & Video Utilities
Twitter 9 58 11 7 9
Facebook fan page 12 61 11 8 5
Peripheral 3 10 0 0 0
Official Website 11 55 12 12 12
Blog 3 21 0 2 2
Total numbers of apps
in category 19 64 13 12 12
Strategies to enhance services
This study reviewed the past literature and found that first movers could sustain their advantages through enhancing services. In the app market, the most common way to enhance services was integration with social networks, including Twitter, Facebook, and Google Plus, among others. Social login and sharing to social networks were methods widely used in apps. Social login is a form of single sign-on using existing login information from a social networking service to sign into a third party Website.
However, from the results of our analysis (see Table 4-5), only about 12% of apps supported social login, and therefore we concluded that this was not an effective strategy to sustain competitive advantages. When it came to sharing contents on social networks, most photo-and-video and music apps supported the feature. For example, 360 Panorama (Occipital, 2014) allows users to share 360 view photos to the world or on users’ Facebook and Twitter pages. Another example is SoundHound (SoundHound, 2014), which is a music-recognition app that allowed users to share identified songs on Facebook and Twitter. However, there were two music apps that did not support sharing on social networks—Ringtone Designer Pro (Blackoutlabs, 2014) and Ringtone Maker
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(Zentertain, 2014)—and both of them were apps that allowed consumers to create custom ringtones and text tones. Therefore we formed the following hypothesis:
It is unlikely for apps to sustain the advantages through social login.
It is likely for apps to sustain the advantages through sharing on social networks only for music and photo-and-video apps.
Table 4-5. Results of Examination of Enhancing Services
Entertainment Games Music Photo &
Video Utilities
Social login 2 5 4 2 1
Sharing on social
network 9 24 10 12 5
Total number of apps in
category 19 64 13 12 12
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