Apps are web goldmine, but competition is brutal (News Feature)

By Andrej Sokolow Feb 14, 2011, 17:35 GMT

Barcelona - The software programs cellphone users have come to love are humbling the mightiest corporations in the mobile phone industry, with all the money now rushing into the so-called apps.

Whether it is Angry Birds, a simple game with a soundtrack of shrieks, or simulated flatulence noises with software like iFart, the real cutting edge at the Mobile World Congress in Barcelona this week seem to be in the apps field.

Nokia, a Finnish company, may make popular mobile phones and lead the world in unit sales, but there are comparatively few apps available for its old operating system, Symbian.

In Barcelona, the big question has been whether Nokia and its new partner, Microsoft, can lure apps developers to fill the Windows Phone 7 operating system with hordes of the pastime programs.

The buzzword is 'ecosystem,' meaning a combination of a strong platform like Apple's iOS and Google's Android with a community of freelance programmers eager to earn big money with add-on software that will catch the masses' taste.

Where fortunes beckon, even helpers can prosper. In Berlin these days, anyone with a bit of experience in programming apps would be stupid to accept a steady job, one start-up entrepreneur said.

The going rate for software developers in the city is 600 to 1,200 euros (800 to 1,600 dollars) per day. A desperate scramble for talent is underway.

Berlin's apps industry has sprung up practically overnight. Four years ago, Android and iOS did not exist. Apple did not open its App Store until 2008, but just passed the first 10 billion sold.

An estimated 17 billion apps will be sold this year, generating 15.9 billion dollars, Gartner Research, a respected market tracking company, said recently. By the end of 2014, it estimates that 185 billion apps will have been installed on the world's phones.

Others have forecast 25 billion dollars in annual sales by 2015.

It all began with the clever idea of allowing practically anyone to reprogram software extras for mobile phones. Where it will all end is anyone's guess, many experts say. In the meantime, the industry is turning cutthroat.

Even the Finnish company that devised Angry Birds, which currently reigns supreme as the must-have app everyone is tweeting about, admits that the competition has become brutal.

Rovio published 50 apps that were flops before it struck gold with Angry Birds, a little game built around the story of five cartoon- style birds that resent the theft of their eggs by a group of green pigs.

Mikael Hed of Rovio candidly admitted in Barcelona, 'We don't have any secret recipe for success.' Chance rules.

Even getting a game onto mobiles worldwide does not necessarily translate into dollars and cents.

'The standard price for an app is free,' Hed said. 'The premium price is 79 (euro) cents.'

Anyone crossing that line risks getting little attention among the hundreds of thousands of programs currently available.

Market researchers say four out of five apps are offered for free, with the developers trying to recoup their investment by selling advertisements or persuading users to buy something extra.

The latter approach has worked best with games.

The Zynga company has achieved a 9-billion-euro market valuation by selling premium points for Farmville - the Facebook hit that allows bored urban people to pretend to feed chickens and pigs - and its other games.

Wireless network operators, who have been sidelined in the rush, are now trying to get a foothold in the apps business. They may prove attractive to independent apps vendors, which tend to be fragmented and lack brand-name appeal.

Telefonica O2 of Spain unveiled at the Barcelona expo its own platform for apps developers, BlueVia, pointing out that it can sell their programs to its 264 million mobile phone customers worldwide.

Online: Gartner Research forecast: http://dpaq.de/TM9hT

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