THE INDIAN APP ECONOMY
By Rajat Kathuria & Sugandha Srivastav
India’s App Economy:
Currently an Urban Tale
Google: Our Mobile Planet India (2013)
But with Enormous Potential...
Total Worth of
Indian App Economy
• 150 million USD
App Downloads per
Month
• 100 million
App Developers
• 300,000
9%
10%
Smartphone
Feature Phone
81%
Multimedia Phone
Source: Nielsen Mobile Insights (2012)
Projected Revenue from Paid Apps in India (rupees crore)
89%
percent increase in the
number of smart phones
in urban India from 2012
to 2013.
Total: 51 million smart phones
The Second Phase of a Telecom Revolution:
Content

India’s teledensity is 73% will reach 100% by 2015.

Mobile Phones have penetrated nearly all income strata.
Next Step:
Exploit this connectivity to address India’s high service deficit.

ICT for Development e.g. MOOCs, m-Health, m-banking, egovernance etc.
Why apps in ICT for Development?

Apps are intuitive to use due to their single-purpose nature .

Often less-data intensive than internet sites.

Will gain prominence as smart phone penetration rises.

Have the ability to create a significant number of jobs.
The App Economy’s 3D Framework
Source: Made by the Authors
1st D: How to Bolster App Development

Weak user interface design


App developer teams in India must employ not only software engineers but also design professionals and
psychologists so that an in-depth understanding of visual aesthetics and user behaviour is achieved.
Lack of locally relevant content.

Need local app distribution platforms that provide 70-30 revenue shares to developers.

Network coverage and capability must improve within the interiors of the country where the demand for highly
localised apps is greater.

App developers will need to collaborate with OEMs to ensure that localised apps, which may require hardware
support for Indic scripts, function well across a variety of devices.

Government can offer technical and monetary support to apps developers and distributors who are designing
apps that serve a public good.

Telecom operators may have a role to play, provided they offer competitive revenue shares to app developers,
in facilitating mobile payments since they cater to a large prepaid segment.
2nd D: How to Boost App Distribution

The problem: The most popular app distribution platform in India is Android’s GooglePlay.
International app stores do not lend themselves to the easy discovery of highly Indiaspecific/regional content.
3%
5%
1%
Android
Symbian
8%
Windows Phone
Windows Mobile
21%
62%
RIM
iOS
Share of Purchases for India, Fieldwork: Sept-Oct. 2012 Source: Nielsen Informate Mobile Insights

Need business model innovation on the app distribution side.

Case Study: AppsDaily



AppsDaily sells its own apps through physical outlets that are located across 140 cities in India.
Circumvents unfavourable mobile-payment regulation by allowing payments in cash.
Makes the process of obtaining apps easier for those who are less digitally literate or aware by
having physical attendant at stores.
3rd D: How to Unlock Latent Demand

Increase:
Digital
Literacy
Advanced Data User
35%
51%
SMS/Voice User
2%
14%
6%
12%
84%
83%
Gender
Parity
Awareness
Voice Only User
6%
26%
Male
20
80
68%
Female
39
47
55
61
53
45
China
USA
13%
India
China
USA
UK
Source: Mobile Youth Around the World, Nielson (2010)
India
UK
Source: Mobile Youth Around the World, Nielson (2010)
Business Model Innovation in Monetisation

The Freemium model

Subscription model

In-App Purchases

Advertising

In-App Advertising
Improving the Overall App Ecosystem






Seed capital
Network Infrastructure
Consumer Devices
Operating System
Policy Framework
Socio-Economic Condition






Innovation
Penetration
Affordability
Fragmentation
M-Payment & Spectrum Efficiency
Usage
For more details on the above, please read the report! 
Bottom Line
Mobiles for Entertainment  Mobiles for Development
India can do better & apps can help.
M4D per million unique mobile subscribers
Source: GSMA Intelligence Country Overview: Sri Lanka
Data: MDI Products and Services tracker, MDI Analysis
But All Stakeholders Will Need to Contribute as shown in 3D
framework.
The Way Forward & Conclusion

Focus will be on urban market till saturated – low-hanging fruit.

Cater to the domestic market by focussing on localised content.

Aim for international competitiveness through innovation:




The ability to search for in-app content without downloading the app.
Apps that allow for a new degree of device customisation.
Apps that replace previously paid-for-services.
The app economy must be strengthened by increasing consumer
awareness, enabling the growth of local app distribution platforms and
incentivizing app developers to create locally relevant content so that
apps can penetrate new regions. These initiatives will only be successful if
network coverage and capability increase as well.
One Small Presentation is Not Enough



Contact us for more information!
Rajat Kathuria: rkathuria@icrier.res.in
Sugandha Srivastav: ssrivastav@icrier.res.in
Thank you!