2 APPS

2.1 Overview Apps, short for computer applications or application software, have expanded far beyond the consumer marketplace into a tool for marketers. When consumers download apps onto their smartphones or on social networking sites, their engagement with the apps provides marketers with useful insight into consumer behavior. Consumers choose to download apps to their computers or mobile devices, which means they’ve actively sought out the tools and features. There are novelty apps, like the virtual lighter from Zippo, and utility apps, such as device power managers and GPS tools. From Gap’s StyleMixer to Pizza Hut’s create-a-pizza to Stanley Works’ iPhone App that turns the device into a level, there are apps for almost anything imaginable. Many apps are free to users; companies make money selling apps, selling ads within apps to be integrated, and selling digital goods used in apps. _________________________________________________________________

“It's happening with dizzying speed. Just two years ago, almost none of this existed. Apple's App Store, the most popular destination for mobile-phone programs, was launched last summer. Now there are more than a dozen rival stores, and at least 100,000 apps have been created. Some startups that staked their claim in the app economy have become large, lucrative businesses in just a few months. Twoyear-old Zynga, which makes popular game apps, is already profitable, with more than $100 million in revenues. By comparison, Google didn't start making money until its third year–and still had less revenue.”
BusinessWeek, 11/2/09 _________________________________________________________________

CONSUMER MARKETING 2010

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Analysts figure it’s at least a $1 billion market today.compete.S. mobile apps at $1. and has forecast it to top $4 billion by 2012. 11/2/09 _________________________________________________________________ 2. _________________________________________________________________ “These are such early days. Juniper Research (www. headed for $4 billion by 2012. Not bad for a brand-new business.juniperresearch.” BusinessWeek.2.3 Use Of Mobile Apps According to the Smartphone Intelligence Report (April 2009) by Compete (www. percentages of users downloading various types of applications to smartphones are as follows: • Games: 37% • Music: 28% • Entertainment: 25% • Weather: 24% • Navigation: 21% • News: 18% • Social networking: 16% • Utilities: 16% • Business: 13% • Travel: 12% • Productivity: 11% • Sports: 11% • Education: 9% • Photography: 9% • Books: 8% • Healthcare and fitness: 8% • Lifestyle: 8% • Reference: 8% • Other: 4% CONSUMER MARKETING 2010 • 18 • .com) has estimated the current apps market at $1 billion.yankeegroup.2 Market Assessment Yankee Group (www.com).com) estimates 2010 revenue from U.6 billion. no one knows exactly how big the app economy is.

99.00 or more. Nielsen’s App Playbook survey found smartphone users most likely to download apps directly from their mobile carrier. the one billionth app was purchased from the Apple Apps store. In part this is because most apps are not available across platforms.gartner. the number of users accessing mobile-application stores with their smartphones will increase four-fold by 2013. Though the Apple Apps store will continue to maintain its hold on the mobile apps market. the launch of a significant number of Android devices in the latter part of 2009.com).• • • The following are other findings of the survey: Of all apps users.instat. 44% have downloaded 1-to-5 apps.$9. 5% have spent $50. The App store opened in April 2008–along with the launch of iPhone 3G. 33% said it was because they didn’t want to spend the money. CONSUMER MARKETING 2010 • 19 • . a principal analyst with In-Stat.00 .99. 27% have downloaded none. Of those who have not downloaded apps. 28% have spent $5. 14% have downloaded 6-to-10 apps. 21% have spent 99¢ . according to In-Stat (www.99 on apps. 27% have spent $2.00 . 41% said it was because they did not need any.$1. Apple was responsible for 99. set Android apps on a promising trajectory for 2010. the Apple Apps store is the most popular. According to David Chamberlain. The number of smartphone users accessing mobile-application stores is roughly a fourth of the projected 100 million users and is largely comprised of only iPhone users. which drove its market share to 5% at the end of the year.com).$4. In late April 2009.4% of mobile apps sales in 2009. Among all mobile apps stores. Among app users. According to Gartner (www.

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