How to stand out in the app development game

1Executive Summary

With more and more developers jumping on the mobile apps bandwagon, standing out is becoming more difficult. There are 25 billion apps downloads in Apple’s App Store, 450,000 in Google Play and 82,000 in Microsoft Windows Phone Marketplace. So it takes some strategizing to pick a category where you can succeed and also find a loyal base of users who will spend money on and in your app.

Which categories are the best bet? And what does it take to make a successful app in not just the popular gaming market but also in areas like weather, news and productivity apps? Developers, this one’s for you.

The old standby

Games, as most anyone who has checked out a mobile app store knows, are by far the most downloaded, played and profitable apps. They have resulted in some of the biggest tech startup success stories of the past year: OMGPOP’s Draw Something was gobbled up by Zynga for about $200 million, thanks to its standout success on Apple devices, for instance.

And that’s just one popular game. Should a developer even try to compete with myriad Angry Birds iterations, Words with Friends, Fruit Ninjas and more? If you can take the risk, the answer is yes. Mobile device users, after all, spend a lot of time in games and often a lot of money, too. In January and February of this year, more than half of all app sessions tracked by Flurry Mobile analytics were spent in games, across both iOS and Android platforms. And that number is 20.5 times higher than it was in 2010, according to Flurry. In other words, mobile games aren’t just a fad.

The size of the competition shouldn’t be a deterrent. The most important thing for standing out: Make apps that are original, simple and intuitive to use, and don’t try to do everything. Rather, do one thing so well it becomes addictive.

Being a heavily played game is usually good news for developers’ bottom lines, too, even if the app is free. With the option of buying virtual currency, goods or cheats within mobile games, developers can rake in huge profits: Free games with in-app purchase options accounted for more than 65 percent of all revenue for iOS and Android apps near the end of 2011, Flurry found.

Breaking news

But to be sure, there are opportunities beyond games. According to the chart below from Amsterdam-based firm Distimo Research, games have the highest download frequency and are the largest category. But other categories — weather, navigation and finance, for instance — show even higher ratios of downloads to number of available apps.

Source: Distimo

Source: Distimo

While weather isn’t a particularly exciting category, it’s a necessary utility. With the high number of downloads per day compared to the relatively few number of weather apps there are, Distimo concludes there’s a need. The Weather Channel’s app is seen as the standard, due to its accuracy and wealth of information (and it’s free). But that particular app’s design is nothing to write home about, so there’s plenty of room for a developer to create a beautiful and accurate weather app.

The same goes for news apps. Apple’s Newsstand, which allows publishers to offer app-based versions of their content for a subscription fee, is just six months old, but it is already generating decent revenue for creators. Distimo found that the top 100 Newsstand publications were generating more than $70,000 per day for publishers like Condé Nast, News Corp. and the New York Times.

The momentum of news apps is increasing, too. According to Distimo, “[The Newsstand category] is also bringing in a substantial proportion of the revenue, with over 7% of the top 200 grossing applications coming from this category.” While the app is only for iOS 5 devices right now, it shows that other platforms could use a similar app or platform.

But there are other ways to deliver news besides Apple’s Newsstand: Apps like Flipboard aggregate and present the news according to reader preferences with an easy, beautiful implementation, and there are just a few “save for later” type reading apps that are also popular among those who want to read offline.

Those looking to create weather and news apps have two significant hurdles to overcome, however. Users must be able to access quality content, which can be expensive or difficult to come by. Plus, the potential return on investment isn’t quite the same in these categories as it is for games. When putting a game on the App Store, “It’s pretty easy to get lost, but there’s a really high upside as well, if you get featured by Apple for example,” said Gert Jan Spriensma, an analyst at Distimo. “If you just want to get a modest return on investment you can make a weather app, if you want more risk and you try to aim for millions of users you can make or publish a game.”

The long tail

While game apps are the most popular and are used intensively for periods of time, they typically have a shorter shelf life, according to Flurry.

News, medical and reference apps are the opposite: Forty-two percent to 43 percent of those apps remain relevant to a user for more than 90 days, the longest time period among all categories. In comparison, lifestyle, books, entertainment, social networking and games apps are the least likely to remain for a long time: Five percent to 16 percent of those are kept for longer than 90 days.

Flurry user retention over 90 days

Apps for mapping, drawing and creating spreadsheets are also perceived to have more long-term value and “therefore more successfully retain their user bases,” Flurry found. Thirty percent to 35 percent of these apps are still on a device after 90 days, which is in the middle range. For developers, the longer an app stays on a device, the more time there is to build trust and perhaps extract more revenue from a user, either through in-app purchases or other apps from the same brand.

A good example is Readdle. The company came out with PDF Expert, a productivity app for the iPhone, in 2010. PDF Expert is not an addictive game or a hip social networking app, but Readdle has slowly grown its user base to hundreds of thousands by continuing to come out with more useful, related productivity apps. PDF Expert already had thousands of users, so when Readdle’s revamped scanner app, Scanner Pro, debuted on the iPad a few weeks ago, it went immediately to the top of the iOS App Store’s productivity charts. That’s thanks to a good product but also a trusted brand that has proved itself valuable to its customers over time.

Creative thinking

There’s also a burgeoning category with not much data behind it yet but that is a wide-open field: creative tools. As I wrote recently, apps that turn mobile devices into tools that let users create things have enormous potential.

Two big ones arrived in the same week and saw an immediate positive response: Paper, the beautiful iPad drawing and journaling app, and Snapguide, an app that helps users easily make and share their own video- and photo-based DIY guide, like anything from changing your car’s oil to making a killer grilled cheese sandwich.

While creativity tools do not yet rank as proven moneymakers, this is a category to watch. As we have seen with the swarms of users on Pinterest and Etsy, exploring creativity and sharing skills with others, especially in a social context, is an important trend.

I also believe that Snapguide CEO Daniel Raffel’s words about how he settled on the kind of app he wanted to build are useful for app developers: “It always pays to work on something that’s original. It’s easy to be attracted to common spaces,” he told me earlier this month. “Everyone wants to build a better messaging service or photo-sharing service. But unless you significantly innovate and do something where the timing’s right and product fit is right most people will yawn and people will pass it by.”

But above all, he says, “Find something that you really want to exist in the world” and make it.

Many simply want that to be a really cool game. And that’s great, especially if you can stand out in a crowded field. But super-smart, high-powered, broadband-connected mobile devices have so much more capability now. Smart developers will tap into these possibilities and create beautiful, seamless experiences around them for users. It’s hard not to imagine that in five years, games will be a much smaller part of the app ecosystem and these smart platforms will be treated instead as tools and utilities.

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