App economy unbalanced in favour of US, reveals study - Mobile World Live

App economy unbalanced in favour of US, reveals study

04 FEB 2016

The vast majority (81 per cent) of developers around the world are located in high income countries, with the US being the dominant producer of apps, according to a study by UK-based think tank Caribou Digital, which aims to highlight the app economy’s “unbalanced nature”.

Although East Asia is growing past Europe thanks to the strength of China, US developers dominate apps used in almost all markets. On average, apps coming out of the country have 30 per cent of the market across the 37 regions observed in the research.

In fact, the US is the dominant supplier of apps in every market except for four – China, Japan, South Korea, and Taiwan.

What’s more, emerging markets earn just 1 per cent of total app economy revenue. 95 per cent of the estimated value in the app economy is limited to ten countries, with 69 per cent captured by the top three alone.

Therefore, it is no surprise that the US takes a “massive double-digit majority of revenues” from virtually every country in the world.

“This may be for purely meritocratic reasons – we know Silicon Valley is a hive of talent – but we believe there are also structural reasons behind this,” the company explained.

For instance, Google allows developers in any country to upload apps, but only allows merchant accounts in a relatively small group of developed world markets.

“Clearly, if you can’t get paid for your app or benefit from in-app purchases, it’s no surprise revenue flow is such a trickle,” the report said.

“Revenue is concentrated into a handful of markets that take the lion’s share back into their own countries, with local sales from local developers almost absent except for unique markets such as China, South Korea and Japan,” it added.

Another issue for developers in low-income countries is the struggle to export their products. 70 per cent of developers were not able to export, compared to high-income countries, where only 29 per cent of developers were not able to export.

For comparison, only 3 per cent of US developers had this problem.

“We strongly believe that healthy local content and services are crucial not only in encouraging new users to come online, but in making sure that the massive digital dividend that the app stores have delivered is distributed more evenly,” the report said.

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Saleha Riaz

Saleha joined Mobile World Live in October 2014 as a reporter and works across all e-newsletters - creating content, writing blogs and reports as well as conducting feature interviews...More

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