US Losing Ground in the Apps Market

By September 23, 2013
US Losing Ground in the Apps Market

Apps for smartphones and tablets are increasingly being developed outside the United States. Nevertheless, the US is still for the moment the dominant country in this field.

The software – which increasingly means downloadable apps – industry in the United States now finds itself in fierce competition with developers in some other countries. A report from mobile analytics and advertising firm Flurry reveals that in the first half of 2012, 45% of all apps worldwide were created in the United States, but in the first six months of this year that figure fell to just 36%. However, the stateside software industry is still number one when it comes to popular and successful apps. When active use and engagement – number of users and time spent in-app – are taken into account, US developers claim 70% of the global market in 2013, although here too there has been a drop of 6% compared to last year.

Chinese users prefer China-made apps

Flurry CEO Simon Khalaf gives several reasons why US-grown apps have enjoyed such success. First of all the US is not only an app pioneer country but also has a very large domestic market. Secondly, the high number of English-speakers worldwide means that apps can often be exported without needing any local adaptations. Outside the US, the proportion of time local users spend in apps developed in their own country is generally not all that high – for instance just 13% of total in-app time in the UK and only 8% in Brazil. By contrast however, users in China spend 64% of their in-app time with made-in-China apps so if they want to penetrate this market, publishers need to get their apps translated and ensure they are fully appropriate from a cultural viewpoint. US firms have so far not bothered much about localisation as they have enjoyed opportunities to grow market share in countries where such adaptation was not necessary.  Consequently their products currently clock just 16% of the Chinese users’ in-app time. However, given the burgeoning Chinese market for everything to do with smartphones and tablets, US developers will certainly need to start reviewing their approach.

Small country players focus on international markets

Developers in countries with less common languages have no choice but to plan on going international, unless they want to find themselves with a tiny market. Internationalisation is easier when it comes to functional apps, of the compass or pocket flashlight variety, or easily translatable such as weather apps. If we compare the amount of user time spent in locally-developed apps in relation to the percentage of apps in use that were actually created in that country – which gives us a developer-impact metric – we can see the major role played by certain countries. Finland, for instance, has an exceptional impact ratio of over 8, a figure no doubt boosted by the success of the Angry Birds application. The other countries which come out well in the rankings – Denmark, Ireland and China – all show ratios above 1 but lower than the 1.9 posted by the United States. This coefficient serves to demonstrate the still strong impact of US-made apps on the market, which are currently twice as successful as the global average.

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