2011 already showed significant growth for the mHealth app market. In 2012 the market size will nearly double.

The smartphone application market for mobile healthcare will reach US$ 1.3 billion in 2012 – up from US$ 718 million in 2011. Despite this substantial growth, the mHealth market is still in an embryonic state – especially in comparison to the US$ 6 trillion of the overall global healthcare market. Several factors (esp. smartphone penetration), will continue, however, to drive mHealth market growth over the next couple of years.

Global revenue for mHealth applications in 2012: US$ 1.3 billion

These findings are part of our new Mobile Health Market Report 2011-2016 report. Click here to preview the table of contents and sample pages.

Mobile healthcare market drivers

The increase of revenue stems from downloads, in-app advertisements, mHealth services, direct transactions and sensor sales. As a number of big healthcare companies published mHealth apps in 2011 that go far beyond a simple allergy tracker or pill reminder (e.g. Sanofi Aventis’ sensor-based iBGStar Diabetis monitoring app) sensors are a growing part of the landscape.

In 2012 the number of mHealth application users – mobile users who downloaded a smartphone mHealth application at least once – will reach 247 million. Compared to the 124 million users who downloaded mHealth smarthphone applications in 2011, this is a near doubling.

The technical aspects of the healthcare landscape are changing rapidly and fundamentally. Healthcare data, the number of healthcare apps and their usage on mobile phones is growing. It is all evolving around smartphones and sensors attached to the phone.

New mobile healthcare market research report

For more information on the mHealth application market read our report, Mobile Health Market Report 2011-2016. The report describes in a detailed 100 pages the impact of smartphone applications on the mHealth industry. It will help decision makers in the healthcare market to understand the current status of the market, learn about best practices and get insights on future trends and market potentials.

More mobile health reports:

- Mobile Health Applications Landscape: Best Practice Examples (2011 – 2016)

- mHealth App Market Trends and Figures 2011-2016

What is your take on the growing mHealth market?

2011 was the first year of substantial business in the market for mobile health services delivered via smartphone applications.

Since our first mHealth report was published last year, the growth in this market has greatly accelerated. The main drivers for this growth have been the increase in the smartphone user base on the demand side, and the doubling of the number of mHealth applications on the supply side.

Mobile healthcare market has grown a lot in the last year …

A majority of the major healthcare companies have discovered mHealth applications as an innovative way to promote and deliver healthcare services and products. A testament to this is that a number of these large players published mHealth apps in 2011 that go far beyond a simple allergy tracker or pill reminder, e.g. Sanofi Aventis’ sensor-based iBGStar Diabetis monitoring app.

As a consequence, the smartphone application based mHealth market increased by a factor of 7 to reach $US 718 million in 2011. These findings are part of our new Mobile Health Market Report 2011 – 2016.

… but the market has by far not yet reached its full potential

Nevertheless, the mHealth market is still in an embryonic state. Theoretically the market potential is enormous given the overall worldwide healthcare market size of US$ 6 trillion (WHO estimate) and the potential use cases and benefits for mobile patient healthcare support.

For more information on the mHealth application market read our report, “The Mobile Health Market Report 2011 – 2016.”

The report describes in a detailed 100 pages the impact of the smartphone applications on the mHealth industry. It will help decision makers in the healthcare market to understand the current status of the market, learn about best practices and get insights on future trends and market potentials.  Read more about the mobile healthcare market.

Please share your thoughts on how the mHealth market will develop.

The development service market today is almost 3 times of the size of the application download market.

The market for mobile application development services, including application creation, management, distribution and extension services, has reached $US 20.5 billion in 2011. App development services became a mass market that has surpassed the app content market by a factor of 3.

$US 6.8 bn in app download vs. $US 20.5 bn in app development

In 2011 publishers created $US 6.8 billion in application download revenues.

Today most app project revenue is generated from “classical” app creation services (concept creation, design and coding). New service types like app libraries, white label solutions and multi platform app development tools have become more and more popular, but do not yet take a major share of the market.

Daily rates for app development vary

Prices for application development services vary significantly between regions. UK developers charge $US 626 per day whereas competitors from India charge, on average, $US 138 per working day.

App development partners using price as the main criteria for selection will not be lead to an optimal solution as most of the price differences are offset by the additional time needed by offshore app developers.

The Market for Mobile Application Development Services

For more information on the app developer industry see our research report, “The Market for Mobile Application Development Services (2010-2015) – Selling The Spades To The App Gold Diggers”. This report covers the dynamic market on 98 pages. It is written for app developers as a planning and benchmarking tool as well as for app publishers who wants to develop their sourcing strategy.

Please meet us at the M-Days in Frankfurt (1^st and 2^nd of February 2012) to discuss developments in the app market. To see the program click here: M-Days Program (in German).

The market for app stores is shifting – as the market for general, first-tier app stores is solidifying, niche stores are increasing, offering customers and publishers new opportunities.

These findings are taken from the new market research report “Smartphone App Market Monitor Vol.4”.

Just like first-tier stores, niche stores have existed in the market since the early 2000s, but have only become relevant since the launch of the Apple App Store. As all the major OEMs and MNOs launched their app stores between 2008 and 2010, 2011 has become the year of targeting niche app user segments.

The number of new niche stores has doubled every year

As seen in the chart below, the number of new niche stores has doubled every year since 2009.

Broadly speaking, there are 3 types of niche stores:

• Platform-oriented: Provides apps for a special OS platform e.g. AndroidPIT, Crackberry.
• Target group-oriented: Provides apps for a specific segment of app users e.g. business or adults.
• Carve outs: Niche store with a full catalogue store e.g. MNOs having their own app store within the Android Market Place or “@work” by Apple.

The growth of niche app stores – particular target group-oriented stores – has been partially fueled by back-end service providers. These service providers enable white label app stores for any company which would like to run its own app store and monetize, for example, the website’s traffic.

Niche stores reflect a market change

The growth of niche app stores also reflects a shift in the market from a platform-driven service offering, to a more sophisticated customer segment-driven one. In the past, the priority for device owners was to look for stores which provided apps that were compatible to their handheld devices. As the number of apps has now dramatically expanded, customers face increasing difficulties in locating specific apps due to the volume of items within these stores. As a result, device owners are now looking for stores which provide them with more streamlined, targeted app selections and results.

The market’s demand for easier search and discoverability of apps will have an impact on both publishers and app stores.

• For a great majority of publishers, niche plays – whether that is a dedicated space in a large app store or a stand alone or aggregator store – present increased opportunities for exposure, hopefully leading to increased downloads.
• For app stores, the rise of niche alternatives indicates that search mechanisms and shelf space will need to increase in order to keep pace with the growth of apps.

What do you think: Are niche stores a normal development of a market which is dominated by a duopoly? Will they have a major impact on the market?

To have a deeper look into the app market world, including niche stores, please find our latest research report “Smartphone App Market Monitor Vol.4”.

To better understand the potential global app development service market please have a look at our “The Market for Mobile Application Development Services (2010-2015)”.

With 3.49 billion total downloads as of September 2011, the US is still the largest market, holding more than 50% of the total app download market share, but not the most active market and not the one with the highest potential.

Download our free Android Market Insights Vol. 7.

The United States remains one of the largest markets, both in terms of user base and, consequently in terms of volume of apps downloaded. Android smartphone users, based in the US, have generated over 50% of all Android app downloads, totaling nearly 3.5 billion.

South Korea, the second largest market in terms of app downloads, lags behind with a mere 9% share of the total Android app downloads from the Android Market; followed by United Kingdom, Germany and France.

US not the cash cow market for mobile applications

Yesterday’s news? So let’s have a look at something different: Obviously users based in the largest Android markets are not necessarily the most active app downloaders.  If we take a look at the average app downloads per smartphone user we see that the cash cow markets also are to be found elsewhere.

User download behavior differs significantly between markets. Sweden has a low level of Android smartphone penetration but user behavior reflects a high interest in apps. The Netherlands, Germany, Switzerland and Spain follow slightly behind. Comparatively, Russian, Japanese and Chinese subscribers are among the most passive downloaders.

The average user in major Android markets downloads 2-3 applications per month. Higher average downloads per smartphone user show the market’s rate of absorption and growth potential. In other words, higher numbers of per smartphone user app downloads demonstrates a society’s openness toward new apps. Thus, the growth rate of total app downloads in these countries is likely to increase with less marketing efforts, compared to countries with less active users.

Four types of environments for app market growth

Grouping the above countries along two dimensions: the number of downloads per smartphone user and the level of android smartphone penetration, four types of environments for app market growth emerge:

• Markets with a Relatively High Growth Potential – These markets have a relatively high number of downloads per smartphone user per month, but relatively low Android smartphone penetration overall.
• Cash Cow Markets – “Cash Cow Markets” exhibit relatively high Android smartphone penetration rates and relatively high numbers of app downloads per user per month.
• Very High Growth Potential/Resistant to Change – Based on different societal factors, including consumer behavior, countries in this category have either a very high growth potential or are resistant to change.
• Highly Saturated Markets – Markets with a very high Android smartphone penetration rate, but with a very low number of app downloads per user per month.

For more detailed information on the environment for app growth in different countries, download our free Android Market Insights Vol. 7.

For more information about the App Development market please review our report “The Market for Mobile Application Development Services (2010-2015)“

37% of published apps have been removed from the Android Market.

Download our free Android Market Insights Vol. 6.

Over the past few months, the Android Market has been maintaining an exponential growth, but is still lagging behind the app store market leader, Apple. In Q3 of 2011, the number of active mobile applications in the Android Market stood at 319,161 compared to 459,589 in Apple App store.

However if we look deeper, Android developers are significantly more productive than Apple’s. We’ve noticed that the average publisher on Android has placed more than 6 applications in the Market since launch, compared to just over 4 apps on average that have been published by iOS developers. (If you want to find out more about opportunities for professional mobile application developers, please have a look at our developer report – or at the report’s special chapter about Solutions for Developers and Publishers to Reduce Development Costs and Time to Market).

The actual total number of applications published on the Android Market leapt to over 500,000 in September 2011. In the meantime, the Apple App Store stands at just over 600,000 successful submissions: just 20% more. The issue is that over 37% of the applications published were later removed from the Android Market for various reasons, whereas the Apple App Store has removed just 24% of published apps in comparison, as of the end of September.

Although Apple is known to regularly clean up its store from inappropriate or outdated content, its active application share still exceeds that of Android. It is likely that the more rigid application submission requirements prevent developers from publishing multiple trial or low quality applications whereas publishers in the Android Market place a lot of market testing, trials, demo and malware content. Over 78% of the apps removed from the Android Market were free, which could mean that publishers put more effort into the applications they place with the pay-per-download business model, thus ensuring that it is kept longer in store.

At the other end, the share of deactivated apps in the WP7 Marketplace today stands at just 13%.  However, one has to bear in mind that it is a comparably young store and many publishers are still exploring its potential. Fifteen months after its launch (comparable to the WP7 store now), the Android Market similarly had 86% of its apps active and a significant application store clean-up didn’t get started until the end of 2010.

Please also check our research report The Market for Mobile Application Development Services (2010-2015).

Just by choosing the less competitive and more price-intensive category, developers can lift their potential revenue by 900% above average.

These finding are part of our latest free monthly “Android Market Insights”. Download it here.

At the end of August 2011 the average application had generated nearly $2,500 since it has been published. The total average cumulative revenue from paid downloads varied from $300 to $21,000 per category.

Although nearly a quarter of all apps downloaded on Android Market are games, the monetization potential of these apps is rather mediocre. Intense competition significantly reduces the potential revenue. Unsurprisingly, the smallest category of Weather apps has generated by far the highest average revenue per app in the store.

However the use-case of the app is very specific and it is very difficult for developers to make yet-another great weather app. Therefore the Business category could be an optimal choice for developers. It currently contains 7,000 apps and only 13% of them are paid; while users do not mind paying a price for another good tool.

Many categories though have very low average revenue, because users either prefer to download free alternatives, or they just would not pay more than a dollar for another ringtone or wallpaper.

More details on category monetization and Android Market’s key metrics overview in the new volume of research2guidance’s free “Android Market Insights”.

The “average app” has a better chance to generate downloads on “non-hyped” platforms.

These findings are taken from our new Smartphone App Market Monitor V.3.

Despite all the hype around the major platforms Android and iOS, publishers are still overlooking the hidden potentials of the niche players.  The Q2 2011 results of our smartphone application monitoring report indicate that those applications published on the less popular platforms, such as WP7 marketplace or Blackberry’s AppWorld, generate significantly more downloads compared to the Apple App Store.

Nokia’s OVI store still generates highest average downloads per app

Average Symbian app makes 160% higher downloads per day compared to iOS app

Significantly lower competition, yet a sufficiently large user base that desires apps, are the major reasons for this.  Symbian still retains, by far, the highest potential user base. Even though its users are incomparably less active than iOS’s heavy downloaders, it still generates significant download volumes to Symbian publishers.  This is largely because whilst Apple boasts of its 400,000 apps, the OVI store contains less than a tenth of that number.

Looking into average numbers, the Android Market stands not far behind the Apple App Store.  This quarter, the average Android App attracted just 5% less users than iOS.  Competition is harsh.

However, going in for very small niche platforms may not be the best idea either. LG World! and Samsung’s App Store are struggling to generate user attention.  Although LG has less than 3,000 apps and as a result it is much easier to be discovered there, its user base is just too low.

Symbian is not dead.

Although the Symbian platform is seen by some developers to be clumsy and outdated, as well as Nokia’s transition to WP7 which has fuelled discussions as to when Nokia will give up its platform completely, the current status seems to be promising.  Recently, Nokia reported the launch of three new Symbian Smartphones and confirmed that these will not be the last of the products, nor updates, to be delivered on Symbian.

We invite you to comment and share your opinions on the future of Symbian.

You can find other important Q2 2011 market developments in the new volume of the research2guidance Smartphone App Market Monitor. The third volume of the report includes a special interest chapter on mobile retail market.

Apple’s and Android’s race in smart device market

One of the heat topics these days are the results of smartphone shipments. Apple became the top-selling device manufacturer with its record-breaking 20.3 million device shipments during the second quarter of 2011, whereas Android owns 48% of market as a largest mobile operating system provider.

For most starting developers one of the key criteria in selection of a platform is the potential reach of an application, i.e. how many people own devices running the platform and how many users will actually be reached through a chosen app store?

Previously Apple was the unquestionable leader, with the largest app store user base. If we count only smartphone users Android is already far beyond, however Apple App Store user base is fueled by millions of iPod Touch users and a successful iPad spread. To date Apple has shipped over 240 million smart devices (iPhones, iPod Touch and iPads) leaving Android behind with 170 million cumulative device shipments. Given the device replacement cycles and other relevant factors, actual potential user bases today are lower but Apple still wins over Android.

Platform shares of total smartphone app user base

Our estimates show that Apple lost its significant dominance already at the end of 2010. At the dawn of smartphone apps market Apple‘s users made up to 74% of total smartphone user base, however it dropped to less than 40% in Q2 2011. Android is rapidly catching up. Within just under a year and a half Android leapt from 2% to 28% in mid-2011: today almost every third app store user owns an Android phone.

As we see the smartphone app market monopoly is continuously transforming into a duopoly. Both platforms together comprise nearly two thirds of all potential smartphone application users, leaving all other platforms as niche players.

Android will catch up to Apple

We think it won‘t take long for Android to catch up with Apple in terms of potential application store users. Another successful quarter for Android, and absolute reach will no longer be a deciding factor for developers, which platform to choose for an app. They will have to consider more qualitative user base differences and potentials, or develop for both platforms.

App developers and app publisher can get more insights in how to handle multi-platform app development, reduce time-to-market, serving the long-tail with white-label apps etc. with our new report “Solutions for Developers and Publishers to Reduce Development Costs and Time to Market“. The report is part of the comprehensive research “The Market for Mobile Application Development Services (2010-2015)“.

Free Android Insight report: Download the free monthly report here – “Android Market Insights (July, 2011)”

You think Android will never beat Apple? Please share your opinion.

_ _ _

* The smartphone app user base (reach/installed base) is defined as number of smart devices in market with an on-deck (pre-installed or downloaded) application store.

2011: the year of media tablets

Although there were tablets in the market long before iPad, after its first announcement many still had doubts, and questioned the usefulness of such a device. Nevertheless Apple exceeded even the most optimistic expectations. Since the release of the iPad, Apple alone has shipped a total of 15 million tablets making it a most wanted Christmas present of 2010. Despite a temporary volume decrease in Q1 2011, caused by delayed iPad 2 launch, in Q2 2011 again there were 9.25 million iPads shipped.

Apple still is the clear leader of the market, but it opened the door to many other OEMs, including RIM, Samsung, HP, Motorola and other. Already in January 2011, more than 100 new media tablets from 50 OEMs were announced at the Consumer Electronic Show (CES), followed by many more in subsequent months. The major mobile device manufacturers rush to gain a share of another market, recreated by Apple, just like in the smartphones and app market two years ago.

Where is the media tablets market headed?

The tablet was quickly embraced by customers, in part due to their previous adoption of application-driven devices, such as the iPhone. Nevertheless media tablets are still perceived as niche devices, without clear, mass-market functionality. In order to understand if the iPad fever will last and if only early adopters have fed the demand or if the mass market will adopt the tablet we will have a look at the challenges and drivers of the tablet market.

Challenges for media tablet adoption

Throughout the period of the tablet’s introduction, and its subsequent success, questions have been raised as to the sustainability of its growth. Tablets have several drawbacks which are likely to affect this:

• Entertainment tool: First, despite the fact that enterprises and professionals have embraced tablets, based on owner surveys its primary use appears to be as a home-based entertainment tool. Although many users expect to use it to ease professional routine prior to purchase, only 20% of iPad owners use it on the go, versus 80% who use it exclusively at home.
• Relatively lower capabilities: Second, it was developed as a software-use oriented device and is not as convenient for making calls, or taking pictures, as smartphones are. However, in terms of technical performance, the media tablets at the moment can hardly compete with existing netbooks or notebooks, and are not capable of performing more complex tasks.
• Limited portability: Third, in terms of mobility, the size of media tablets may be a constraint, particularly when compared to mobile phones. They are not as portable as mobile phones, and therefore are not always at hand. They require certain ergonomic positioning and specific locations to comfortably use the device. This defines and limits the range of successful tablet use-cases.

What will drive the media tablet usage?

On the other hand, the following features of media tablets may drive tablet adoption:

• Improved portability and connectivity: Media tablets were designed to be application-driven devices. They are much more convenient for certain actions, such as reading books or playing games, than laptops or smartphones. Their lightweight design is better for people often on the road. Generally it’s more appealing for leisurely use at home than laptops.
• Innovative OS and application support: Within less than a year since the launch of the iPad, dedicated app stores gathered more than 75,000 customized native applications. Apps were a key selling point for smartphones, and are likely to be just as important a selling point for media tablets.
• Users’ engagement in apps: Furthermore, iPad users download more and are willing to pay more for apps than iPhone and general Smartphone users. This encourages developers to develop more apps for the media tablets which create a robust ecosystem for quality content.
• Use integration into enterprises: There are more and more enterprises which integrate media tablets into their daily operation. According to estimates, there are around 200,000 tablets in use in enterprises. Coinciding with the increase of enterprise apps, we believe that tablets will be wider used in enterprises as another light-weight operational tool.

More insights and figures on media tablets market, e.g., shipment forecasts, media tablet shares by OS, user demographics and application market reviews, are included in research2guidance’s “Media Tablet Market” special insights report.

How will the tablet market develop? Please, share your opinion with us.