LIVE FROM APP PLANET FORUM AT THE GSMA MOBILE ASIA CONGRESS 2010: The key question of how to monetise apps dominated this morning’s second session at App Planet, where speakers explained how the industry needed to look beyond smartphone apps to find the real revenue opportunity.

This was outlined by Nicky Santiago (pictured), chief marketing officer at Indonesia’s XL Axiata, who described how the operator was driving mobile data services (MDS) despite operating in a fragmented devices market where smartphone penetration is just 2.5 percent. Nine of XL’s top ten MDS-enabled devices on its network were Nokia handsets, Santiago explained, but the most popular – the Nokia 1202 – represented just 4.56 percent of the total, suggesting a wide and diverse range. “Fragmentation is a key characterisation in this market, and what we can offer customers is limited by the capabilities of the handset they use,” he said. He added that XL updates device presence on its networks four times a day in order to keep track of the devices its customers are using.

XL is Indonesia’s third-largest operator with almost 40 million customers. Santiago said that over 50 percent of its customer base used mobile Internet and 21.4 million used mobile value added services (VAS). He claimed that XL generates “two or three times” the revenue from mobile data services than most of its regional and domestic rivals.

To keep its advantage, Santiago said that it had recently rolled out Motricity’s mCore platform, which has allowed it to provide a storefront that can deliver highly personalised content to individual users. He said XL was offering “thousands of targeted MDS campaigns a month offering specific offers to specific customers,” a marketing tactic he said was twice as successful as a traditional campaign and accounting for a 15-20 percent uplift in revenue. But he warned that Indonesia was a “high volume, low cost” market with around 60 percent of mobile content purchases below IDR1,000 (US$11).

Tomi T Ahonen, a mobile consultant and author, was next on stage to explain how – contrary to popular opinion – developing apps for high-end platforms such as Apple’s App Store does not mean easy money. In an analysis of Apple’s figures, he concluded that half of all paid apps on the App Store will get less than one thousand downloads, which would mean developers would need to wait 11 years for these apps to break even (assuming an average price point of US$1.95). “Only one in a hundred [App Store] apps will make any money,” Ahonen said.

He noted that, while the mobile apps business was valued at US$1 billion dollars, it was dwarfed by the market for mobile messaging (US$150 billon) and mobile VAS (US$100 billion). Moreover, he estimated that the iPhone only accounted for 2 percent of the world’s mobile users, while the market for SMS, MMS and WAP had a reach that was 40 times greater.

Distimo CEO Vincent Hoogsteder had earlier taken delegates through the firm’s latest apps analytics data, which included some interesting figures on in-app purchases on the iPhone. He noted that just 2 percent of all apps available on the iPhone feature in-app purchasing, but that these apps generate 26 percent of revenue. He therefore urged developers to adopt in-app purchasing in their business models.