Developer Megatrends Η1 2015

DEVELOPER MEGATRENDS H1 2015
2015 VisionMobile.com
May 2015
Developer Megatrends H1 2015 2015 VisionMobile
VISIONMOBILE: THE ANALYSTS OF THE DEVELOPER ECOSYSTEM

VisionMobile is the leading market research and analysis company in the app developer economy. Our surveys
and SDK analytics uncover the latest trends across mobile, IoT, PC, and Cloud developers, and help our clients
decode the complex developer ecosystem landscape.
Developer Economics is the largest, most global app developer research and engagement program reaching up
to 10,000 developers in over 140 countries. Now in its 9th edition, the research program tracks developer
experiences across platforms, revenues, apps, tools, APIs, segments and regions. Our Developer Economics
research also covers IoT, with the latest survey capturing trends from 4,000+ IoT developers.
Primary research
Thought-leading reports
Developer data
TRUSTED BY THE LEADING BRANDS AND MEDIA

clients who benefit from developer economics
Leading media channels quoting our research
ABOUT THE AUTHOR
Stijn
Schuermans
Michael
Vakulenko
Christina
Voskoglou
Senior Business
Analyst
Strategy
Director
Director of
Research and
Operations
Stijn focuses on understanding how

technology becomes value-creating
innovation, how business models affect
market dynamics, and the consequences of
this for corporate strategy. He is the lead
Internet of Things researcher in the
VisionMobile team since 2012. Stijn holds
an engineering master degree and an MBA.
He has over 10 years experience as an
engineer, product manager, strategist and
business analyst.
You can reach Stijn at:

stijn@visionmobile.com
@stijnschuermans
Michael has over 18 years experience in

mobile and telecom starting from working
on first experimental 3G systems in
Qualcomm. Later on Michael was part of
several startups developing products in the
areas of wireless, enterprise networking
and mobile apps. At VisionMobile Michael
works at the cross section of business
models, economics and technology where
he leads strategy practice for softwarecentric business models in mobile, Internet
of Things and Connected Car.
You can reach Michael at:

michael@visionmobile.com
@mvakulenko
Christina leads the analyst team and

oversees all VisionMobile data projects
from methodology to analysis and insights
generation. She is also behind
VisionMobiles developer segmentation
research, as well as the Developer
Economics reports and DataBoard
subscription services. Christina has more
than 16 years of experience in statistical
consulting, BI design and business
forecasting. She holds an MSc in Statistics
from the London School of Economics
(LSE) and a BSc in Economics & Statistics
from the University of Bath.
You can reach Christina at:

christina@visionmobile.com
@ChristinaVoskog
IN THIS REPORT
Introduction Developers are kingmakers in every industry
Developers
escape from the
app store
Developers
escape consumer
markets
Apps escape
from screens
Platform players
escape from
mobile
DEVELOPERS ARE KINGMAKERS IN EVERY INDUSTRY

6
DEVELOPERS HAVE CONQUERED THE PHONE WITH APPS
Source: VisionMobile estimates
THEYRE JOINED BY 800,000 NEW MOBILE DEVELOPERS PER YEAR

http://vmob.me/AF14
Source: App Economy Forecasts 2014-2017 | VisionMobile
DEVELOPERS MOVE TO MORE AND MORE INDUSTRIES AND VERTICALS
53%
of mobile developers are already

involved in the Internet of Things
and many more to come
http://vmob.me/IoT15
DEVELOPERS ARE CONQUERING THE WRIST
10
Apple Watch
Android Wear
Pebble
3,500+ apps
2,300+ apps
1,400+ apps
Source: Apple, Pebble, Android Wear Center, VisionMobile estimates (Q1 2015) Developer Megatrends H1 2015 2015 VisionMobile
DEVELOPERS ARE CONQUERING THE CAR

API available by invite only
40 new vehicle models in 2015
API publicly available (Nov 2014)

Apps can be published on Google Play (Mar 2015)
First models in 2015
Aftermarket solutions for any car,

250+ OBD apps in Google Play,
growing support from big players
11
DEVELOPERS ARE CONQUERING THE HOME
a small selection of Smart Home platforms and APIs
Tony Fadell
ex-Apple, CEO Nest
12
There are a lot of things that were not going to be able to

build. We want to work with developers who bring other
great ideas in the mix. [] The iPhone was great - it had 5
apps on it when it shipped. Now it has a million apps on it.
The opportunity in the home is going to be pretty close.
https://www.youtube.com/watch?v=377oDvnrk5M&t=20m40s (edited for clarity)
DEVELOPERS ARE CONQUERING THE SKY
Raised $75M to build an industrial UAV

developer platform (May 2015)
Android for drones
An operating system for

commercial drones
http://dev.dji.com/
http://dronekit.io/
http://www.airware.com/developers
Michael Perry
DJI
There are a lot of industrial use cases that DJI cant build
the software for, but developers can come and create
software for industrial companies. Developers are already
using our SDK to build apps to help control drones for
agriculture, construction, and mining.
http://techcrunch.com/2015/05/06/dji-drone-platform/
13
Developers are conquering cities

healthcare
clothing
factories
well, everything really!
14
TODAYS COMPETITIVE BATTLES ARE WON AND LOST BY ATTRACTING DEVELOPERS
Apple iOS | Google Android

took #1 spot from Nokia and
Blackberry in (smart)phones
Under Armour
fashion brand uses
developers to engage
communities of athletes
15
Microsoft Windows
dominant OS in the 90s and 00s
because of superior developer strategy
Salesforce
1.4M registered devs in 2013
took #1 spot from Oracle in CRM
EVERY COMPANY SHOULD MASTER DEVELOPER ECOSYSTEM SKILLS

developer ecosystem =
platform
technology
people
rules for
interaction
API
cloud, APIs, apps,

devices, OS,
16
individuals & companies

users & developers
app curation,
governance,
Developers are a driving force in every industry

and a source of competitive advantage
Every company should master developer ecosystem skills
17
DEVELOPERS ESCAPE FROM THE APP STORE

18
70% REVENUE GROWTH FOR APPS IN ONE YEAR. GREAT NEWS! OR IS IT?
Worldwide online advertising and app revenue
Source: http://blog.appannie.com/mobile-app-advertising-and-monetization-trends-2013-2018/
19
THE APP STORE ALONE CANNOT SUSTAIN THE DEVELOPER POPULATION

Only 1 in 9 developers that rely on app store revenues are in the safe zone
Zero
zone
0%#
10%#
App poverty line
Sustainability line
($500 per month)
($10K per month)
App poverty
zone
20%#
30%#
40%#
$0#
Twilight
zone
50%#
<$500#
<$10K#
60%#
70%#
80%#
Safe
zone
90%#
100%#
>$10K#
% of mobile developers who use paid downloads, in-app purchases or

advertising (and no other revenue model), by monthly revenue (n=1,187)
20
Source: Developer Economics Q1 2015
FOLLOW THE MONEY: E-COMMERCE IS THE WINNING APP REVENUE MODEL
Selling offline goods and services via apps:
71%
of the app economy

21
earned
by
9%
of developers
E-COMMERCE MODEL #1: APPS AS A CHANNEL

Transact through the app
Nearly 60 percent ofAmazon.comcustomers shopped

using a mobile device during the 2014 holiday period
22
E-COMMERCE MODEL #2: MOBILE-FIRST BUSINESSES

Offline services that couldnt exist without the app
Uber will reach an estimated $10
billion annual run rate by end of 2015
http://www.businessinsider.com/uber-revenue-projection-in-2015-2014-11
23
E-COMMERCE MODEL #3: APPS AS A PLATFORM

Enable others to build e-commerce businesses on top of your app
3rd party
businesses
operating on
WeChat
WeChat app
24
Source: Tencent investor presentation
MOBILE E-COMMERCE WILL ONLY GET BIGGER IN THE COMING YEARS

http://vmob.me/AF14
500
400
300
200
186
152
120
91
2014
2015
total#mobile#e9commerce#revenue#($B)#
25
Source: App Economy Forecasts 2014-2017 | VisionMobile
2016
2017
all#other#revenue#models#($B)#
App stores alone cannot sustain the developer population
e-commerce is and will stay

the winning app revenue model
26
DEVELOPERS ESCAPE FROM CONSUMER MARKETS

27
ANOTHER WAY TO DODGE THE POVERTY TRAP: TARGET ENTERPRISES
19% makes more than $10K per month

64% of developers
target consumers
43% makes more than $10K per month

20% of developers
target enterprises
28
MAKING THE JUMP TO ENTERPRISE MIGHT BE EASIER THAN IT SEEMS!

Top 5 consumer categories
Top 5 enterprise categories
Utilities
29%#
Enterprise
Games
29%#
Business & Productivity Tools
26%#
Entertainment
25%#
Education & Reference
24%#
Business & Productivity Tools
Utilities
64%#
52%#
20%#
Communication & Social

Networking
17%#
Education & Reference
16%#
There is substantial overlap in what consumer

and enterprise app developers are working on.
29
MAKING THE JUMP TO ENTERPRISE MIGHT BE EASIER THAN IT SEEMS!
Many apps can be simply repositioned or repurposed

to attract an enterprise audience rather than consumers
30
THE INTERNET OF THINGS HAS A SIMILAR DISTRIBUTION OF DEVS AND REVENUE
Professionals,
employees, other
enterprises
60% of IoT
device sales
consumers
% of developers with IoT as their

main occupation by target audience
31
Source: Developer Economics Q1 2015 | Deloitte
90% of IoT
service revenues
will come from enterprises

in 2015
WINNER IOT DEVS APPLY CONSUMER TECHNOLOGY TO ENTERPRISE PROBLEMS
Drones
"The Phantom was simple enough for
beginners, but powerful enough to interest
serious hobbyists, professional
photographers, and filmmakers.
Wearables in industrial environments

enable and optimize workflow efficiency,
enhance communications, reduce paperwork,
and allow workers to take advantage of a handsfree work environment
Philips Hue
"The Hue range began as a pure consumer
project [] but the Hue line has seen traction
among small and medium businesses that are
looking to create ambience in their premises."
Smartphones & wearables in medical

Apple ResearchKit: consumer smartphones and
wearables provide objective, continuous sensor
data and high signup rates in clinical research
32
Source: Tractica
Waze Connected Citizen program

Data exchange program based on consumergenerated data replaces expensive road sensor
network with limited geographical reach.
20+ cities and regions already participating
App and IoT developers will repurpose

consumer technology and business models
to solve the most important enterprise problems
(and dodge the poverty trap by doing so)
33
APPS ESCAPE FROM SCREENS

34
APPS ARE MOVING OUT OF MOBILE DEVICES

The app paradigm of bite-sized software is replicated outside of smartphones
Watch
Desktop
TV
35
Car
Browser
Home
THE NATURE OF APPS IS CHANGING, TOO
36
YESTERDAY: THE TRADITIONAL APP
the value is delivered by the app itself

(even when connected to a backend service)
37
TODAY: THE COMPANION APP
the value is delivered by the device

the app is just the remote control
38
TOMORROW: THE DATA APP
the value comes from combining all kinds of data

the app processes triggers and signals across devices, sensors and APIs
39
THE FOCUS OF INNOVATION SHIFTS TO MAKING SENSE OF DATA

Yesterday
Today
Tomorrow
Traditional app
Connected device
devices
sensors
APIs
Data
Companion app
Data app
delivering knowledge, enabling action
Where the value is concentrated

40
THE RISE OF THE DATA DEVELOPER
% of IoT developers
Not all IoT developers do hardware; many more work on software and data
41
App makers
Device makers
Data-centric
e.g. smartwatch apps,

car apps,
Smart Home scenarios
e.g. fitness bands,

smart flower pots
e.g. smart home hub,

health apps, Smart City,
system integrators,
community projects
FROM DEVICE TO DATA PLATFORMS

Current platform kings
Future platform kings
device-centric
data-centric
data routing
data
structuring
data tracking
& presentation
stream processing
big data analytics
42
Value in tomorrows apps will come from

making sense of data
Data developers and data platforms will be king
43
PLATFORM PLAYERS ESCAPE FROM MOBILE

44
WHAT IS THE FUTURE OF MOBILE PLATFORMS, GIVEN

(a) the current stalemate
in the platform wars
http://vmob.me/DE1Q15
(b) the evolution to data-centric apps,

moving the focus away from
operating systems and into the cloud
45
THE FUTURE OF MOBILE ECOSYSTEMS IS IN THE INTERNET OF THINGS

Android & iOS fully leverage their developer and user bases to gain traction fast
Smart
Home
Wearables
Health &
Wellness
Connected
Car
Google Fit
HomeKit
WatchKit
HealthKit
All these platforms are in the top 3 by developer popularity in their vertical.
46
MOBILE RUNNERS-UP TRY TO COPY THE RECIPE

With varying results in time-to-market and developer mindshare
Smart
Home
Wearables
Health &
Wellness
Connected
Car
N/A
Windows in the Car?
47
E-COMMERCE PLAYERS ARE IN TOO WITH PRODUCTS, APIS AND CLOUD

Distribution capability and engaged users attract developers
Mobile
Kindle Fire and Fire Phone
Internet of Things
Echo
Fire TV
#1 e-retailer in China
Mi-series of phones and tablets
48
wide range of home products and wearables
THE $B QUESTION: WILL NETWORK EFFECTS FROM MOBILE CARRY OVER TO IOT?
Will the mobile platform duopoly be sustained?
49
In the future, IoT device selection by

consumers and enterprises will be
determined by will it work with my
existing services and devices.
We predicted this as early as 2010. In the
2012 edition of the Megatrends report,
we talked about the evolving meaning of
convergence. From converged networks,
to converged devices, to experience
roaming.
That prediction is now playing out in full.
50
CONVERGENCE: EXPERIENCE ROAMING ACROSS DEVICES
experience roaming
across devices
Social circle
Developer ecosystem
User data roaming
convergence =
Service roaming
User interaction design

Industrial design
Brand
51
APPLE AS THE POSTER CHILD OF EXPERIENCE ROAMING
experience roaming
52
across devices
Social circle
Facetime
iPhone
Developer ecosystem
App store
iPad
User data roaming
iCloud
Mac
Service roaming
iTunes, Airplay
User interaction design
iOS
Industrial design
Apple
CarPlay
Brand
Apple
iPod
Apple TV
Watch
MULTI-DEVICE, INTEGRATED EXPERIENCES

2012
PC
2015
smartphone
tablet
smart TV
smart home
health / wearables
Mac computers
iPhone
iPad
Apple TV
HomeKit
Health / Watch
CarPlay
Chrome browser
Android
Android tablets
Google TV
Nest
Fit / Wear
Android Auto
connected car
?
Windows
Windows Phone
Windows
Xbox
Cortana
Health / Band
N/A
Amazon.com
Fire Phone
Kindle Fire
Fire TV
N/A
Echo / Alexa
N/A
N/A
Mi / MIUI
53
Windows in the Car
Mi note
Mi TV / Mi Box
Mi Smart Home +
Mi Band +
Mobile ecosystem winners are fully leveraging their developer

and user bases to win in the Internet of Things
In the future, IoT device selection by consumers and
enterprises will be determined by
will it work with my existing services and devices
54
55
Get in touch with Us
Knowledge. Passion. Innovation.
Matos Kapetanakis
matos@visionmobile.com
Senior Manager,
Get the latest Developer Economics reports:
Updated: 12 November
2010
www.DeveloperEconomics.com/reports
VisionMobile 2011
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DEVELOPER MEGATRENDS H1 2015

Developer Megatrends H1 2015 2015 VisionMobile

VISIONMOBILE: THE ANALYSTS OF THE DEVELOPER ECOSYSTEM

Developer Megatrends H1 2015 2015 VisionMobile

TRUSTED BY THE LEADING BRANDS AND MEDIA

Leading media channels quoting our research

Developer Megatrends H1 2015 2015 VisionMobile

ABOUT THE AUTHOR

Stijn focuses on understanding how

You can reach Stijn at:

Michael has over 18 years experience in

You can reach Michael at:

Christina leads the analyst team and

You can reach Christina at:

Developer Megatrends H1 2015 2015 VisionMobile

Introduction Developers are kingmakers in every industry

Developer Megatrends H1 2015 2015 VisionMobile

DEVELOPERS ARE KINGMAKERS IN EVERY INDUSTRY

Developer Megatrends H1 2015 2015 VisionMobile

DEVELOPERS HAVE CONQUERED THE PHONE WITH APPS

Source: VisionMobile estimates

Developer Megatrends H1 2015 2015 VisionMobile

THEYRE JOINED BY 800,000 NEW MOBILE DEVELOPERS PER YEAR

Source: App Economy Forecasts 2014-2017 | VisionMobile

Developer Megatrends H1 2015 2015 VisionMobile

DEVELOPERS MOVE TO MORE AND MORE INDUSTRIES AND VERTICALS

of mobile developers are already

Developer Megatrends H1 2015 2015 VisionMobile

DEVELOPERS ARE CONQUERING THE WRIST

DEVELOPERS ARE CONQUERING THE CAR

API publicly available (Nov 2014)

Aftermarket solutions for any car,

Developer Megatrends H1 2015 2015 VisionMobile

DEVELOPERS ARE CONQUERING THE HOME

a small selection of Smart Home platforms and APIs

There are a lot of things that were not going to be able to

https://www.youtube.com/watch?v=377oDvnrk5M&t=20m40s (edited for clarity)

Developer Megatrends H1 2015 2015 VisionMobile

DEVELOPERS ARE CONQUERING THE SKY

Raised $75M to build an industrial UAV

Android for drones

An operating system for

Developer Megatrends H1 2015 2015 VisionMobile

Developers are conquering cities

Developer Megatrends H1 2015 2015 VisionMobile

TODAYS COMPETITIVE BATTLES ARE WON AND LOST BY ATTRACTING DEVELOPERS

Apple iOS | Google Android

Developer Megatrends H1 2015 2015 VisionMobile

EVERY COMPANY SHOULD MASTER DEVELOPER ECOSYSTEM SKILLS

cloud, APIs, apps,

individuals & companies

Developer Megatrends H1 2015 2015 VisionMobile

Developers are a driving force in every industry

Every company should master developer ecosystem skills

Developer Megatrends H1 2015 2015 VisionMobile

DEVELOPERS ESCAPE FROM THE APP STORE

Developer Megatrends H1 2015 2015 VisionMobile

Developer Megatrends H1 2015 2015 VisionMobile

THE APP STORE ALONE CANNOT SUSTAIN THE DEVELOPER POPULATION

App poverty line

($500 per month)

($10K per month)

% of mobile developers who use paid downloads, in-app purchases or

Source: Developer Economics Q1 2015