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A hundred million devices isn’t cool.
You know what’s cool? Five billion devices.
Okay, I borrowed most of that line from The Social Network. But just as a fictionalized Sean Parker was urging Mark Zuckerberg to think way bigger, I think app developers are setting their sights too low when imagining the markets they can serve.
Last year, a tiny subset of world’s population — the early adopters, gadget-hounds — bought 100 million smartphones. These smartphones excite developers, because they carry data plans. Data plans are a wonderful conduit through which developers can serve their content, letting them make big bucks.
But in the U.S., an early adopter market, the virgin land-grab might be nearing an end. In the U.S., an estimated 60 percent of subscribers will have a data plan by 2013, and that’s nearing saturation, at least relative to other places on the globe.
There are more than 5 billion mobile subscribers in the world, according to a study by Chetan Sharma. Which market should app developers be thinking about?
True, most of those 5 billion subscribers are using basic phones that can barely handle text messages, let alone sophisticated apps. But that’s changing. Growth rates for data usage in developing markets are far higher than in the U.S.
So now it’s time for developers to go global.
It’s a historical aberration that the latest mobile revolution started in the U.S. in the first place. Before the iPhone era, America was hopelessly behind in mobile. Pre-iPhone, Silicon Valley was seen as mostly irrelevant to the mobile sector — a bunch of nerds who didn’t know the tricks of catering to carriers. You had to travel to places like Seoul or tour the markets of Akihabara in Tokyo to see the latest, greatest devices. But first Apple, and then Google, reenergized Silicon Valley’s entrepreneurial set around mobile (the Wall Street Journal even reported recently that Google is specifically trying to recruit app developers to add to its braintrust).
The U.S. mobile resurgence was an amazing turnaround that helped entrepreneurs in Silicon Valley get in on the action: It’s far easier to build software on hardware you can purchase at the local Best Buy and that your friends can download. For developers, familiarity breeds not contempt but enthusiasm. It doesn’t hurt that investors, too, can easily check out the action.
That was fine, as long as the easy growth was located in the U.S. But the pendulum is swinging back. The huge, fast-growth markets abroad will push creators of new mobile experiences to take their ideas global. Sure, there will be pain, from figuring out how to internationalize your user interface, to figuring out local regulations to dealing with multiple payments regimes. Platforms, too, require a rethink, because the cutting-edge smartphones we prefer in the U.S. are often too expensive for consumers in developing markets. The trade-off from dealing with those issues is that you get to tap a far bigger market.
This article is the first in a series called “Conversations on the Global App Economy.” We’re pleased to have Nokia, which has long thought globally about the mobile business, as a sponsor for this series. While VentureBeat will maintain its usual high standards of editorial objectivity, our partnership means we’ll have access to Nokia executives and other experts who can contribute to the conversation, and we think that’s a plus for readers. (Interestingly, this week, Nokia is celebrating its move to a new complex in Sunnyvale, Calif., in the heart of Silicon Valley, which I take as another sign that they want to be in the thick of things here.)
How mobile goes global is a theme we’ll explore in that series, in our regular MobileBeat coverage, and two upcoming events: VentureBeat’s first-ever Mobile Summit in April (more on that later; we haven’t announced it yet), and our fourth annual MobileBeat conference in July. Join in and find out how you can get your piece of that five-billion-user market.
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