Economy, Business And Markets

Domestic Mobile App Market: Uncharted Territory

Domestic Mobile App Market: Uncharted TerritoryDomestic Mobile App Market: Uncharted Territory

M obile applications or in other words “mobile apps” have become so integrated in the day to day lives of smartphone and tablet computer users that it’s becoming increasingly difficult to imagine life without them. Mobile apps were originally offered for general productivity and information retrieval, including email, calendar, contacts, stock market and weather information. However, public demand and the availability of developer tools have rapidly expanded into other categories, such as games, social networking, education, utilities and travel.

The mobile apps market is regarded as one of the fastest growing markets worldwide. In July 2013, Google’s Android market passed 50 billion app downloads and featured over 1 million apps available in the Google Play Store. Apple, during its WorldWide Developer Conference in 2014, talked about 1.25 million apps in the App Store accounting for 50 billion downloads and $5 billion paid to developers. By 2017, it is expected that over 268 billion downloads will generate $77 billion worth of revenue.

The main trigger behind rocketing mobile app usage is the growing sales of tablets, smartphones and other mobile devices. In 2015, 1 billion smartphones will be sold, which is twice as many as the number of personal computers, according to an infographic generated by the University of Alabama at Birmingham’s Online Masters in Management Information Systems.

 Iran’s Mobile App Market

The vast market for mobile apps has encouraged many young and enthusiastic software engineering graduates and entrepreneurs in Iran to enter the world of application developing over the past few years. Café Bazaar, the biggest Android app store in Iran, currently features about 26,000 applications, nearly half of which are developed by Iranians.

Café Bazaar, which was recently ranked by the World Startup Report as Iran’s third biggest startup company valuated at $20 million, currently has more than 10 million users in Iran, according to co-founder Hessam Armandehi in an interview with Tejarat Farda economic magazine. That’s about one eighth of the country’s total population.

Apps are usually available through application distribution platform, which began appearing in 2008 and are typically operated by the owner of the mobile operating system, such as the Apple App Store, Google Play, Windows Phone Store, and BlackBerry App World. While some apps charge the customers certain amounts for each download, many apps are offered free of charge. Revenues for the free apps are generated mainly through in-app purchases and in-app advertisements. For apps with a price, generally a percentage between 20 and 30 percent, goes to the distribution provider, and the rest goes to the producer of the app.

Iranian technology entrepreneurs say sanctions and restrictions on western companies have helped them grow by reducing competition from established foreign players. American technology firms so far have had limited or no access to the market because of bans on their content or restrictions on foreign companies setting up in Iran.

 Not All Good News

But it isn’t all good news for the mobile application developers in Iran. Given the lack of proper protective laws, the app developers are often faced with the risk of their application being duplicated or finding out about a similar parallel work carried out by another team. This is particularly significant knowing that it takes an average 6-7 months to develop a mobile application such as a simple game application.

Lack of mentorship is another difficulty in Iran’s app market. While a number of entrepreneurship enthusiasts have initiated their own tech-based projects in the area of mobile games and apps, they often find themselves treading the unbeaten path due to lack of training and a suitable environment to share experiences. Events such as startup weekends are currently among the few such gatherings that allow tech entrepreneurs to share ideas and cooperate to realize these ideas.  

Most Iranian applications developed so far also fall short of due creativity and quality as they are often made with low budgets and as side-jobs while the developers have to resort to alternate sources of income. In an interview with Persian economic daily Donya-e Eghetsad, Mohamamd-Reza Asayesh, founder of Sanjaqak application design and development company says his company has to offer different programming services to customers in addition to designing applications in order to generate sufficient revenues.

Irrespective of the current limitations, the large youth population and wide mobile penetration in Iran, in addition to the growing speed of internet connectivity promise a bright future for Iran’s application industry. Large enterprises worldwide are increasingly realizing the importance of developing applications for their companies to better reach clients. The trend is picking up in Iran with most Iranian banks currently offering customized mobile applications to customers. As is evident from Café Bazaar’s list of top application downloads, locally themed mobile games developed by Iranian developers are gaining in popularity, while applications in general are rapidly finding their way to new areas of daily life.