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The Economics of Apps
      Mobile 2.0 Europe - Barcelona - 17 June 2010




Volker Hirsch (@vhirsch)
Mobile Apps...




   ... can be a bit of a nightmare
http://fraizochocolat.wordpress.com/2010/02/
You do everything right...
... on the inside...
http://blogs.fayobserver.com/faytoz/files/2008/10/davinci_toothed_gears_original.jpg
... on the outside...




http://picasaweb.google.com/lh/photo/f-4eoJyuiitoJIPDaqrMJQ
... and on marketing




                                                                       ... and of course with Carriers




http://www.ruralmarketingservices.com/images/marketing_road_sign.jpg
Something is still missing...




http://www.latest-wallpaper.info/free-money-wallpaper.htm
The Discovery Dilemma




http://www.lanfaxlabs.com.au/images/all-detergents-3-IMGP3918.JPG
THe $ Dilemma (carrier model)



      after overheads

       after production

        after porting & QA


          after License

             after distributor


                  after carrier

                             after VAT

                               total revenue
THe $ Dilemma (carrier model)




                          2
THe $ Dilemma (app store model)
THe $ Dilemma (app store model)
The Mobile Web then?
http://gapingvoidgallery.com
And again: loads of them...
What is Social?
Social refers to the
interaction of organisms
with other organisms and
to their collective co-
existence [...]




                   Source: Wikipedia
http://commons.wikimedia.org/wiki/File:Bhgs_crowd.jpg
And so what ???
475,000,000
                circulation of newspapers
                                 825,000,000
                               registered cars
            1,700,000,000
 Internet users (PC, Mobile, Web Cafe)
                      1,800,000,000
               unique credit card holders
                           2,250,000,000
                        tooth brushes in use
                                  4,000,000,000
                                    FM Radios
                     4,600,000,000
               mobile phone subscriptions
http://upload.wikimedia.org/wikipedia/commons/8/85/Numbers_grid_in_NY.jpg   various sources
Concept: Object-Centered
  Sociality




                                                                Prof Dr Karin Knorr-Cetina,
                                                                                Sociologist



https://svn-create.freedesktop.osuosl.org/public/create/docs/logo/images/light_bulb_off3.jpg
You need Context!




http://flickr.com/photos/nolifebeforecoffee/124659356/
My app a Social Object?




http://adsoftheworld.com/media/print/lego_video_game?size=_original
It always was!
Object




    Let’s recap:
    Social is interaction
    in context
http://upload.wikimedia.org/wikipedia/commons/e/e0/Petanque_players_in_Cannes_(France)_2003.jpg
It’s about Engagement


    - People Interact by nature.
    - Fans can be Fanatics!
    - An app and the environment in
           which it is set matters to its fans.




    Apps are powerful social
    objects

http://www.windsorfinejewelers.com/media/catalog/product/cache/1/image//t/a/tacori-platinum-round-diamond-semi-mount-engagement-ring.jpg
What
- Create Fanatics.
- Provide avenues for people’s
  passion.

- Incorporate people’s strongest
  community: their friends!

- Keep it in context, i.e. in the app.
How
- High-Scores (Reward) but make
 them customizable (Relevant).

- Connect to the community
 (Avenues of Passion).

- Person-to-Person Challenges &
 (Playful contextual interaction).

- Awards / Rewards (Fanatics).
- In-app transactions & Virtual
 Currencies (Contextual
 Monetization).
74% of all buying decisions are made
  on a friend’s recommendation
                                                                                          Source: Bain Consulting




http://www.cartoonary.com/madagascar/images/madagascar-marty-alex-gloria-melman-penguins-julien-2048x1536.jpg
Monetize
                                         Downloadable
                                         content and in-app
                                         currencies drive
                                         additional revenue
                                         streams
                      Engage             Increase revenues
                      challenges and
                      achievements
                      engage users and
Discover              let them share
                      their app
Cross-promotions,     experience.
Friend Finding, and
Social Network        Increase user
Integration let       activity
people connect to
each other and get
the word out.

Increase installed
base
Discover




       Increased installed base
from more people downloading the games
Engage




Increased activity in your app:
   people use it more often
Monetise




      Increased revenues
from additional revenue streams
One last thing:

123,296,966,069,453


 The Law of Big Numbers
Connect to any social
            network
                        *
                                                   *
                                                                      *
        *




                                                  **




* Already integrated   ** Scoreloop is the official partner for mobile gaming
don’t forget
 the “other”
smartphones!




 And maybe the other folks are noteworthy, too...
Core Social
- Social Tools (High-Scores,
 Player-to-Player Challenges,
 Recommendations [using any
 source available], Awards &
 Trophies.

- Full virtual currency (supports
 in-app purchases, item
 downloads, dual currency)

- Multi-platform: iPhone, Android,
 BREW, Symbian, MeeGo, RIM, Web.
Image Credits
http://upload.wikimedia.org/wikipedia/commons/8/85/Numbers_grid_in_NY.jpg
http://gapingvoidgallery.com
http://upload.wikimedia.org/wikipedia/commons/e/e0/Petanque_players_in_Cannes_(France)_2003.jpg
http://upload.wikimedia.org/wikipedia/commons/5/56/Bhgs_crowd.jpg
https://svn-create.freedesktop.osuosl.org/public/create/docs/logo/images/light_bulb_off3.jpg
http://www.easy-access.com/garagelo/coloring/tools.gif
http://www.scorpioshoes.com/accessories-42/shoe-care-44/dr-martens-shoe-polish-black-8128.htm
http://picasaweb.google.com/lh/photo/f-4eoJyuiitoJIPDaqrMJQ
http://img.wallpaperstock.net:81/car-mechanics-wallpapers_11816_1024x768.jpg
http://www.mixedforyou.com/fineart/Renaissance/Flying%20Machine,%20Leonardo%20da%20Vinci,
%201490.jpg
http://blogs.fayobserver.com/faytoz/files/2008/10/davinci_toothed_gears_original.jpg
http://www.adsinn.com/wp-content/uploads/2008/01/1100109100-1.jpg
http://adsoftheworld.com/files/images/video-game.jpg
http://www.thealarmclock.com/euro/images/flirtomatic.png
http://img.glu.com/WSOP_Mobile/images/WSOP_header_logo.png
http://villageshow.co.uk/assets/images/trophy.jpg
http://images.internetsafety.com/www/images-pm/safe-eyes-mobile-logo.jpg
http://www.foldingbikehut.co.uk/images/Toolbox%20Travel.jpg
Thank you!


        +44 7843 599 678

        @vhirsch

        volker@scoreloop.com

       http://vhirsch.com/blog

        http://scoreloop.com

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