With more than 50 percent of U.S. mobile phone users now equipped with smartphones, demand for mobile apps continues to soar. The average number of mobile apps per smartphone jumped from 32 apps to 41 apps during 2011 -- a 28 percent rise in comparison with 2010, according to a new report from Nielsen.
However, U.S. smartphone owners spent about the same amount of time using mobile apps each day in 2011 as they had during the previous year -- 39 minutes per day versus 37 minutes per day, Nielsen said.
Nielsen researchers said 70 percent of the survey's respondents expressed "concern over personal data collection" and 55 percent were "wary of sharing information about their location via smartphone apps." So we asked Al Hilwa, director of applications software development at IDC, what developers need to do to address privacy concerns as well as prod U.S. smartphone users to spend more time using their apps.
Hilwa said he expected to see the development of new app types as well as the further expansion of apps into other areas of life.
"And developers will continue to chase ever narrower opportunities" while hoping to "hit areas that have not transitioned fully from Web to mobile, or aspects of life not digitized fully yet," Hilwa said Wednesday. "But at some point this pace of growth will slow down."
Claiming More Minutes
Privacy and security considerations definitely stop some people from using apps.
"And that may be another area where the industry can move to claim more minutes of app usage by increasing the confidence in apps," Hilwa said.
Clearly, users ramp up the most toward app usage in their first few months of smartphone usage.
"After that, a steady state ensues, and it is a challenge for the app ecosystem to keep existing users engaged," Hilwa said. "There are so many hours in the day but an unlimited supply of energy and creativity behind apps."
An ABI Research survey released Monday indicated that about 67 percent of mobile app users overall have spent money on an app on at least one occasion and that among these paying users, the mean spend was $14 per month. However, ABI Research Senior Analyst Aapo Markkanen said the median amount among the consumers who spend money on apps is only $7.50.
"This reflects the disproportionate role of big spenders as a revenue source," Markkanen said. "The highest-spending 3 percent of all app users account for nearly 20 percent of the total spend, while over 70 percent spend either nothing or very little."
Making Apps Pay Off
The mobile app releases that have best succeeded in making money have typically been utility apps that are most often used for business purposes. Moreover, iOS games monetized through strings of in-app purchases have also appealed to U.S. consumers, Markkanen said.
Still, in both cases the money comes from a remarkably small base of customers. Markkanen advised developers looking to boost their conversion rates from free to premium to not "get obsessed by mobile and apps, but remember also the Web. Most of the successful app concepts either support, or are supported by, a Web component," he said.
Developers also should view their products through a long-term lens by thinking about the best ways to ensure that customers will still be engaged with their app two years from now.
For example, Evernote has skillfully "combined the Web and the mobile, and at the same time it has also managed to become a habit for many of its users," Markkanen said. "It demonstrates that the longer its customers stick around with a free version of an app, the likelier they're going to convert to its premium version."