Apps: powering smartphone demand

MUCH GETS SAID these days about the latest smartphones. Increasingly powerful processors, multi-megapixel cameras, high-definition screens and even motion sensors that detect eye movement are almost a perquisite, targeting buyers looking for the latest and very best in mobile communications technology.

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Published: Sat 23 Jun 2012, 10:27 PM

Last updated: Fri 3 Apr 2015, 1:56 AM

But swipe the screen to unlock any smartphone and the colorful icons you see represent a critical driver of demand — the application. Strip away the average smartphone’s hardware features and you will find that it is the apps that truly amplify the phone’s usability potential. You will also find that apart from facilitating voice and data connectivity, taking pictures and providing audio visual infrastructure, a smartphone is only as good as the apps it contains.

The fact is that apps are the lifeblood of smartphone ecosystems and their development has nurtured a multi-billion dollar industry that, some say, may be worth more than the market share of some mobile device manufacturers. Consider the numbers: there are close to a million paid and free apps1 available for download between Google’s Android Market, now called Google Play, and Apple’s App Store. While Google Play marked its 10 billionth download in December 2011, the App Store marked its 25 billionth three months later in March 2012. Both platforms launched in 2008 and reached these milestones in under four years.

While these numbers reflect the fact that the app has come of age, other research indicates how it has become an emotionally important and integral part of smartphone users’ daily lives. Ericsson ConsumerLab’s Emerging App Culture report revealed that 69 percent of smartphone users surveyed accessed internet using apps on a daily basis and 20 percent used data-intensive services like video, TV, maps or navigation apps daily.

According to the study, the top 10 activities performed by consumers who have recently purchased a smartphone, starting with the most popular, are: checking in to locations, using maps for navigation or traffic info, watching internet TV and movies, playing online games, watching streaming video, playing games on social networking sites, watching live news, using Twitter, and reading and writing blogs. It is apparent that, for consumers, being connected and having access to tools and services is what matters. They make little distinction between having a smartphone and the apps they use in it.

It is apparent from this research and from our own personal experiences that consumers are increasingly using apps to deal with daily challenges and interact with people, places and things in their urban surroundings.

Significantly, the research also revealed that apps are no longer the exclusive domain of the world’s early adopters and that new smartphone users embrace apps at the same pace as mature users. Although mature users use their apps more frequently than new users of smartphones, we see a general evolution toward new users purchasing increasingly specialised apps, such as those for travel advice and price comparison, from the moment they get their smartphones. In fact, according to the study, usage of these specialised apps is almost as high among new users as it is among mature users.

All of this said, the app market is currently driven by Western, particularly American, demand and as such are tailored to the audiences most likely to download them. However, according to our estimates, there are close to 300 million mobile connections in the Middle East alone, with smartphones forming a significant percentage of these. While developers in the Middle East have made great headway in creating applications tailored to local needs and they have been supported by some smartphone manufacturers and mobile service providers, there is still a tremendous amount of demand that needs to be catered to especially on the Arabic content side.

In conclusion, it is important for technologists, developers, hardware manufacturers and service providers to recognise and celebrate the power of the app. Not only does nurturing a healthy, locally-relevant applications ecosystem make good business sense, since usage can generate revenues for both developers and service providers, it can help further drive demand for smartphone uptake.

  • Anders Lindblad is the President of Ericsson in the Middle East Region.

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