EU app developers should re-evaluate commercial strategies

Many EU app developers are missing a big potential opportunity. While many companies making mobile or social apps aimed at EU markets are trying to charge for apps or monetize them through advertising, most aren’t doing contract development. And that’s where the real money is.
As part of the Eurapp project we’re doing for the European Commission, Gigaom Research surveyed both independent developers and in-house developers building apps in support of their company’s main business in retail, financial services, media, etc. According to our survey of the independents, 44 percent of them are charging for their apps, while 42 percent do work-for-hire.
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Source: Gigaom Research EU independent developers survey, 4Q 2013 n = 199
Yet see how well the independents think they’re succeeding compared with the in-house developers. Over half of the independents said they were “satisfied” or “very satisfied” with the adoption or usage of their apps, and just over half felt that way for their revenue or business objectives. Only 16 percent said they were “very satisfied” with revenue. The independents told us they were frustrated with low prices, free products, and barely emerging ad revenue. Meanwhile, the in-house developers said they were more successful overall.
[dataset id=”216904″]
Source: Gigaom Research EU independent developers survey, 4Q 21013, n = 193, Gigaom Research EU in-house developers survey 3Q 2013 n = 517
So consider this. Half of the enterprises that did their own in-house development also used third-party developers. Yet fewer than half of the independent developers said they were offering services for hire. That’s a potentially untapped market for startup developers.
We built a forecast model of the revenue EU developers can expect to collect from paid apps, in-app purchasing, and advertising, as well as contract labor fees. You might be surprised at how big the potential is for that contract work. Stay tuned, we’ll be releasing that report later this week.
The research behind this post was underwritten by the European Commission.