How platforms
shape participation in
the app economy
Bryan Pon
Caribou Digital
AAG: March 23, 2015
Rise of smartphones
Now: 2 billion handsets > PCs
2020: 6 billion connections, 80% in
developing world (GSMA)
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Opportunity?
Completely digital
Production can be anywhere
Lower barriers to entry
Unprecedented distribution
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=
?
Software platforms
Ecosystems of interdependent firms (Cusumano, Gawer)
Network effects and winner take all (Katz and Shapiro)
Two-sided markets (Rochet and Tirole)
Developers
End-users
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App stores
Virtual marketplace for each platform
Disintermediates value chain
Platform takes 30% of revenue
National level stores, but global reach
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Data
10 markets
iOS + Android
Top 500 “grossing”
Top 100 “downloaded”
Manual search to
find headquarters
United States
1. Candy Crush
2. Facebook
3. What’s App
4. Hay Day
China
1. 淘宝
2. Tencent
3. 360手机卫士
4. WeChat
12,000 apps
5,277 unique apps
2,988 unique devs
France
1. Hay Day
2. Messenger
3. Boom Beach
4. Farm Heroes
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2,688 devs with
location
Top developers
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U.S. and East Asia dominate
Rank
iOS
Android
1
United States
356
United States
287
2
China
308
China
248
3
Japan
197
South Korea
205
4
South Korea
190
Japan
192
5
United Kingdom
128
United Kingdom
89
6
Germany
99
Russia
86
7
Russia
91
Germany
84
8
France
88
France
66
9
Canada
44
Australia
34
10
Australia
34
Canada
32
n = 2,688
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Agglomeration at city level
Rank
1
2
3
4
5
6
7
8
9
10
City
Seoul
Beijing
Tokyo
SF Bay Area
Shanghai
Moscow
London
Paris
New York
Shenzhen
Country
South Korea
China
Japan
United States
China
Russia
United Kingdom
France
United States
China
n = 2,688
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Developers
318
252
250
162
88
81
78
69
51
49
37%
Top developers
2 from Africa
3 from Brazil
19 from India
Exclusion at the state level
China bans Google services from mainland
Google merchant accounts unavailable in 90 countries
e.g., Bangladesh, Guatemala, Cambodia, SSAfrica
“…favorable market conditions, support from the developer
community, regulatory considerations, etc.”
- Joshua Cruz, Google PR
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App store structure
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Preliminary takeaways
• Digital production of apps is concentrated in U.S.
and major cities of East Asia, very little in Global
South
• Platform owner (or government) determines
inclusion/exclusion at state scale
• National app stores aren’t mitigating national
reflexivity and winner-take-all global market
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Thank you
[email protected]
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