According to mobile analytics firm Flurry, the amount of time U.S. consumers spend per day interacting with mobile apps surpassed time spent browsing the web in 2011.
In 2013, television will be the target. This month, the average consumers has spent 168 minutes each day in front of the small screen and 127 minutes in front of the even smaller screen. If mobile apps continue their march next year, they could conceivably leave television in the rear view mirror.
Mobile’s rise has gone unnoticed by few. Many companies are rushing to develop a mobile strategy, and some investors have encouraged their startups to consider a mobile-first approach to product development.
But those hoping to find mobile riches in the app stores through which most mobile apps are distributed should understand that the odds are against them.
Just how bad are the odds? Analyst firm Canalys looked at paid app purchases in the Apple App Store and Google Play in the first 20 days of November and found that half of the $120m in revenue generated went to just 25 developers.
Most of those developers have recognizable names, like EA, Disney, Rovio and Zynga. In other words, when it comes to who is making money in the app stores, the old adage “the rich get richer” seems to be true.
A rising tide lifts all boats, or does it?
That big names are dominating the app stores probably won’t come as a surprise to most. After all, developing high-quality apps, particularly in popular categories like gaming, is typically not a cheap undertaking. Competition is fierce, so standing out requires marketing dollars. And, since success requires app developers to keep users happy, effort must be made in the area of retention.
The good news for smaller players is that, despite the costs, competition and challenges associated with mobile apps, the pie is growing. As noted by The Register, recent research estimates that App Store revenue has jumped by nearly 13% over the first 10 months of 2012, while Google Play revenues tripled.
In theory, a rising tide lifts all boats. 25 developers are capturing half of the revenue, but the other half has more revenue to divvy up too. But just how easy is it to obtain a big enough piece of that other half to make the effort worthwhile?
Venture capitalist Fred Wilson, an early proponent of the mobile-first approach for startups, admits it won’t be easy. “What I want to focus on is the paradox that mobile is where the growth is right now and that mobile is very very hard to build a large user base on.” But he’s sticking by his guns: “…just because something is hard doesn’t mean you shouldn’t try to do it. I am convinced the next set of large and valuable consumer facing services will be built with mobile as the primary user interface. “
Obviously, mobile is more than just the app stores, but with app stores remaining the focal point of discovery and distribution for mobile experiences, and providing arguably the easiest means for monetization of those experiences, the data makes it clear: if you’re not in the .01%, the size of your mobile opportunity may be far smaller than it appears to be on paper.