Tuesday, September 14, 2010
The vast majority of mobile phone owners are willing to pay for apps, a major shift from the long-accepted mind-set that everything on the Web should be free, according to a Nielsen research report released Monday.
"It's a dramatic and fundamental change" in the digital landscape, said Jonathon Carson, chief executive officer of the research company's telecom unit.
The trend was part of a "State of Mobile Apps" report released at the start of the three-day AppNation conference at San Francisco's Moscone Center.
The conference is the first of its kind to address the growing popularity of apps - programs on mobile phones, tablets and other devices that launch specific activities, tasks or services.
"We believe there will be 1 million apps out there by 2012," said AppNation Chairman Drew Ianni. "It's a huge potential market. It's also a revolution."
The two most popular mobile operating systems, Apple's iOS and Google's Android, have about 340,000 apps available.
Smart-phone use
Nearly all U.S. adults have cell phones, and 1 in 4 uses a smart phone, compared with about 16 percent last year, Carson said.
Nielsen, which surveyed 4,000 mobile-phone subscribers in August, predicts that the majority of mobile subscribers in the United States will have smart phones by the end of 2011.
The survey, part of an ongoing Nielsen report called the "Mobile Apps Playbook," found 59 percent of current smart-phone owners and 9 percent of owners of regular feature phones had downloaded an app within the previous 30 days.
Of those surveyed, 91 percent said they would be willing to pay for a game app, while 86 percent would pay for an entertainment app. The percentage of people willing to pay was high for other categories as well:
-- 84 percent for map or navigation apps.
-- 82 percent for productivity apps.
-- 77 percent for food apps.
-- 76 percent for news apps.
Carson called the trend a "huge sea change" for producers of those types of digital content, especially those who have seen their traditional offline revenues drop, because the Web evolved around the idea that content should be free.
He said this "remarkable turn of events" could be due to the combination of the personal nature of mobile devices and Apple Inc.'s "aggressive" business model that promotes and sells apps through its iTunes Store.
Owners of iPhones said they typically paid for 1 app for every 2 free apps downloaded, and 43 percent said they upgraded from a lite or trial version of an app to a full version. Although Apple has about 39 percent of the app market, that's down from 42 percent last year, the report said.
Android gaining
Meanwhile, devices that use Google's Android operating system are rapidly gaining market share, growing from about 2 percent last year to 14 percent in the past quarter, Carson said.
But Android and BlackBerry owners reported downloading only 1 paid app for every 3 1/2 free apps. And BlackBerry owners were least likely to convert from a free version of an app to a full app.
The most popular apps - Facebook, the Weather Channel, Google Maps and Pandora Internet radio - cross all platforms. Twitter made the top five only on the BlackBerry, while YouTube was popular on Android and Windows Mobile phones.
The app trends are prompting changes at traditional media companies, although during a panel discussion, a Wall Street Journal executive noted that the company's newspaper readers were still the most valuable to the firm.
Still, "the app world is a chance for us to rethink our business," said Gordon McLeod, who last week announced that he was resigning as president of the Wall Street Journal Digital Network. "We can do more in the app world than across the Web."
Those attending the conference also indicated a potential shift in how apps are developed. When asked to pick one mobile platform they would work on during the next 24 months if they were forced to choose, a slight majority of the audience picked the Android system over Apple's iOS.
Mayor Gavin Newsom kicked off the event by noting some apps that have been built off data the city now posts online, such as apps to track the arrival of Muni buses and street sweepers.
He also invited the developers to join an open-ended contest to design an app for his campaign for California lieutenant governor.
Newsom quipped that he was getting their work "at an efficient cost."[/img]
The vast majority of mobile phone owners are willing to pay for apps, a major shift from the long-accepted mind-set that everything on the Web should be free, according to a Nielsen research report released Monday.
"It's a dramatic and fundamental change" in the digital landscape, said Jonathon Carson, chief executive officer of the research company's telecom unit.
The trend was part of a "State of Mobile Apps" report released at the start of the three-day AppNation conference at San Francisco's Moscone Center.
The conference is the first of its kind to address the growing popularity of apps - programs on mobile phones, tablets and other devices that launch specific activities, tasks or services.
"We believe there will be 1 million apps out there by 2012," said AppNation Chairman Drew Ianni. "It's a huge potential market. It's also a revolution."
The two most popular mobile operating systems, Apple's iOS and Google's Android, have about 340,000 apps available.
Smart-phone use
Nearly all U.S. adults have cell phones, and 1 in 4 uses a smart phone, compared with about 16 percent last year, Carson said.
Nielsen, which surveyed 4,000 mobile-phone subscribers in August, predicts that the majority of mobile subscribers in the United States will have smart phones by the end of 2011.
The survey, part of an ongoing Nielsen report called the "Mobile Apps Playbook," found 59 percent of current smart-phone owners and 9 percent of owners of regular feature phones had downloaded an app within the previous 30 days.
Of those surveyed, 91 percent said they would be willing to pay for a game app, while 86 percent would pay for an entertainment app. The percentage of people willing to pay was high for other categories as well:
-- 84 percent for map or navigation apps.
-- 82 percent for productivity apps.
-- 77 percent for food apps.
-- 76 percent for news apps.
Carson called the trend a "huge sea change" for producers of those types of digital content, especially those who have seen their traditional offline revenues drop, because the Web evolved around the idea that content should be free.
He said this "remarkable turn of events" could be due to the combination of the personal nature of mobile devices and Apple Inc.'s "aggressive" business model that promotes and sells apps through its iTunes Store.
Owners of iPhones said they typically paid for 1 app for every 2 free apps downloaded, and 43 percent said they upgraded from a lite or trial version of an app to a full version. Although Apple has about 39 percent of the app market, that's down from 42 percent last year, the report said.
Android gaining
Meanwhile, devices that use Google's Android operating system are rapidly gaining market share, growing from about 2 percent last year to 14 percent in the past quarter, Carson said.
But Android and BlackBerry owners reported downloading only 1 paid app for every 3 1/2 free apps. And BlackBerry owners were least likely to convert from a free version of an app to a full app.
The most popular apps - Facebook, the Weather Channel, Google Maps and Pandora Internet radio - cross all platforms. Twitter made the top five only on the BlackBerry, while YouTube was popular on Android and Windows Mobile phones.
The app trends are prompting changes at traditional media companies, although during a panel discussion, a Wall Street Journal executive noted that the company's newspaper readers were still the most valuable to the firm.
Still, "the app world is a chance for us to rethink our business," said Gordon McLeod, who last week announced that he was resigning as president of the Wall Street Journal Digital Network. "We can do more in the app world than across the Web."
Those attending the conference also indicated a potential shift in how apps are developed. When asked to pick one mobile platform they would work on during the next 24 months if they were forced to choose, a slight majority of the audience picked the Android system over Apple's iOS.
Mayor Gavin Newsom kicked off the event by noting some apps that have been built off data the city now posts online, such as apps to track the arrival of Muni buses and street sweepers.
He also invited the developers to join an open-ended contest to design an app for his campaign for California lieutenant governor.
Newsom quipped that he was getting their work "at an efficient cost."[/img]
