What are the key opportunities and challenges facing the European app economy? Can the rise of mobile and social media platforms jump-start job growth and infuse European Union countries with much-needed startup juice? Gigaom Research wants to find out.
We’ve just launched a web-based survey of independent developers. We are asking about staffing and strategies around apps development, support, monetization, and measures of success. The objective is to understand the opportunities and challenges, particularly in job creation, afforded by the European app economy. We encourage developers who are targeting EU markets to take the survey and give us feedback.
That feedback will be a key input into analysis we’re doing for the European Commission. We’re in the middle of the year-long Eurapp project to identify and characterize the potential for job-creation driven by the European app economy. In partnership with the Digital Enterprise Research Institute at NUI Galway, Gigaom Research will be building profiles of, and a forecast model for the jobs and revenues generated in the app economy aftermarket. We’ve already done extensive interviews of companies in the ecosystem, hosted a workshop in Brussels, and run two crowdsourced challenge exercises seeking insights into how the EC can help build up this marketplace.
What we’ve learned so far
The base of European app platforms (mobile, social, and smart TV) is large and growing fast, which will create a ripe market for new apps:
- Gigaom Research projects Western European shipments of over 130 million smartphones in 2013, with the market growing at an 8% rate, compounded annually.
- Facebook alone has a base of over 250 million users in Europe.
- Smart TVs are a smaller market – fewer than 50 million in Europe today – but shipments are growing at over 35% yearly.
Source: Smith’s Point Analytics/Gigaom Research
Estimates based on job postings figure that 450,000 to 500,000 jobs have been created in the US app economy since 2007. That figure includes platform originators lie Apple and Facebook, and some generous aftermarket assumptions. We are unlikely to see similar scale at European platform operations. While the EU job opportunity is smaller than that of the US, it’s still substantial. The growth will be in the aftermarket, at apps developers of all types:
- Large, independent software companies
- Small “cottage industry” developers
- Small and medium sized contractors, and ad agencies developing apps for brands
- In-house development at banks, retailers, media companies, etc.
The net result will be thousands of small app developer companies with 2-3 employees and substantial job creation and retention at larger independents and internal technology departments.
Developer and ecosystem needs
We’ve also heard at the workshops and through 1:1 interviews that developers need more support on things like business development, marketing, monetization, and company scaling than they need in classical tech resources like SDKs, inexpensive or free dev tools, shareable code modules, and support forums:
- Developers think revenue opportunities in direct fees seem more desirable than advertising
- Promotion and discovery remain a key challenge, including search advertising and other marketing
- Developers need assistance expanding into new national and regional markets; they are often baffled by the inherently smaller and more fragmented EU markets than the more concentrated opportunity in the US and Asia
Last year, with the help of the Application Developers Alliance, GIgaom Research profiled cottage-industry apps developers and their business models. That analysis uncovered some key challenges for would-be EU businesses, including an overall pay rate significantly lower than that of the US or Asia. We’re working with the Developers Alliance again, as well as the Mobile Marketing Association, MobileGroove, the App Promotion Summit, All Amber, and others.
We invite you to participate in our survey, which should take about 15 minutes to complete, to share your views and ensure your voice is heard in this critical debate. The findings will be incorporated in a workshop later this year and a major report scheduled for early 2014. As a way of thanking you for your input, we will be happy to share survey findings with you. Survey respondents can also register to win a free iPad.
At the same time, we’re surveying in-house IT developers – make that “ICT developers” – through a more traditional panel-based approach. Those two techniques will be valuable inputs into our market model, and into the recommendations we’ll be making to the EC.