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What Mary Meeker’s 2017 Internet Trends Mean For Mobile App Development

 

On May 31, Mary Meeker, Kleiner Perkins Caufield & Byers partner, delivered an annual rapid-fire Internet Trends report at the Code Conference in California. According to recode, one of the highlights of the report was the decline in global smartphone growth. The technology news website points out that the smartphone shipments have grown only “3% year over year last year”, compared to the 10% growth witnessed prior to the year before. This likely stems from saturation in developed markets and the fact that emerging markets have yet to show significant growth.

 

Enterprise Mobility Report

 

eMarketer, however, predicts that despite this slump in smartphone growth, “the number of mobile phone users will climb to 4.78 billion in 2020”. At 78.7% of smartphone users in 2016, North America leads the rest of the world in the smartphone growth movement, with Western Europe closely trailing behind at 71.7%. The former is poised to grow up to 87.1% and the latter to 82.7%, by 2020. eMarketer also predicts that other regions- comprising of Central and Eastern Europe, the Middle East, Africa, and Asia-Pacific- will also boost their growth rates, although at a much lower pace (low to mid teens) than their North American and European counterparts.

 

What Does All This Mean for the Mobile App Development Industry?

Where is mobile app development going in the future? We’ve highlighted some key takeaways so you can gain a better understanding of the evolving mobile app market.

 

Stacy Golmack of Smashing Magazine writes,

Hybrid monetization models, such as in-app ads and in-app purchases, are quickly gaining popularity in the business world. Most studies show that in-app advertising is set to be a key driver of mobile growth over the coming years […].

 

Further, the App Annie report, cited by Golmack, reveals that in 2015 alone, the mobile app industry generated $41.1 billion in gross income revenue. This figure may increase up to $50.9 billion, and by 2020, it will be worth $189 billion. Golmack further says that with “only 46% of the world’s population […owning] smartphones by the end of 2016, […] the much-discussed mobile revolution is just starting.”

 

Apps that can curate content from different sources on the web and streamline them into an easy-to-follow, non-fussy interface will be on the rise. Known as the aggregator apps, these apps are quickly gaining popularity as they are meant for individuals who either do not have time or the desire to sift through various websites or download a bunch of apps. These aggregator apps, Golmack writes, “tend to become user favorites when they are convenient or enhance the shopping experience.” In an increasingly time-constrained world, it is easy to see why aggregator apps are gaining and maintaining popularity.

 

Google, along with Android and Apple continue to dominate the mobile app industry, with Android smartphones taking 87.8% sold worldwide. Apple’s iOS has about 11.25% share in the market. The difference in the market share between Android and iOS is likely due to the fact that iOS is associated more with the high-end, wealthier users, as opposed to Android remaining popular with the larger population. Windows bleakly follows them with 0.4% of smartphones sales. Similarly, due to the availability of powerful graphics, fast internet connection, high-performing CPUs, smartphones have increasingly become gaming devices. However, non-gaming apps have been witnessing a higher user engagement, as of late 2015.

 

Golmack cites Flurry Analytics Blog in her article and points out certain trends in mobile app usage:

  • Customization Apps- Icons, wallpapers, lockscreen and other device-customization apps saw “a staggering 332% rise in session usage”
  • Digital versions of newspapers and magazines that are compatible with the Mobile View surged at 135%
  • Productivity tools and apps such as Pocket, Wunderlist, Letterspace and Google Keep etc. witnessed a 125% boost
  • Lifestyle and shopping apps and solutions like Amazon, Canopy, and JackThreads ranked fourth at 81% growth rate. Other shopping solutions like the digital coupon-providing apps like Giftagram, for example, which provides individuals with the gifting service living in either side of the United States and Canada border became popular. The users are provided with a particular list of global and lifestyle products to choose from. Specific to these two countries, the user just has to pick the present to be gifted, and the app takes care of all the logistics for them
  • Travel, sports, health and fitness utilities, as well as messenger and social apps increased from 53% to 54%
  • Engagement with the gaming apps declined by 1%

 

Even though there’s an increasing amount of competition in the mobile app development space, developers continue to experiment with and apply new approaches to monetization models. While these models do show varying degrees of success, none of them should be written off as ineffective.

Trends in Mobile App Development:

Despite the slowing of global smartphone growth highlighted in Mary Meeker’s annual address, there has been no signs of slowing for the mobile app development industry. With consumers demanding more and more from their apps, Gartner predicts that over 268 billion mobile downloads will generate an income of $77 billion in 2017”.

 

Recommended Reading: 7 Mobile App Development Trends to Watch Out For in 2017

 

So what should mobile app developers do with this information? They should pay attention to the following trends, as they are most in-demand right now, and will likely continue to be in the future:

 

1. Enterprise Mobile App Development: Due to the fact that the Millennials continue to be the largest users of apps, and are engaged in the workforce, majority of businesses are realizing or have realized, that they need to organize their business operations and offer superior employee engagement on the go. However, these enterprises do have the choice of either building their own custom app or use an existing third party app to handle their logistics. Gartner predicts companies will choose to invest in micro-apps development to allow employees to enjoy specific features of the enterprise solution (such as to-do list apps.)”

 

2. AR & VR Application Development: Both AR & VR are in their nascent form at present, but won’t be for much longer. While PokémonGo may have made companies aware of potential and of the fact that the consumers are prepared (and maybe even excited) for the cross screen-reality interaction, this trend will likely be adopted in other industries. Particularly, the retail landscape is expected to go through an AR revolution, with as many as 100 million consumers expected to shop in augmented reality by 2020.

 

A Goldman Sachs Global Investment Research revealed:

 

3. Beacons & Location-Based App Development: While one can argue that location-based app development has been around for some time, it has not reached its full potential. There will be focus on personalization and signals such as movement, each customized according to the user. That being said, mobile app developers should be aware that companies will want to exploit AR integration in their apps to the hilt. According to Beaconstac, The revenue from Location-based services market is expected to reach $43.3 billion by 2019.”

 

4. Artificial Intelligence & Machine Learning App Development: Although Google Now and Prisma gained popularity in 2016, it is likely that there will be over 300% increase in investments in cognitive computing in 2017 alone. There is a vast territory that is yet to be explored in AI and Machine Learning-based app development. Mobile app developers need to be prepared for a surge in demand for such apps.

 

5. Android Instant Apps: Imagine Facebook instant articles, but instead of articles, they are apps. That’s right. It’s been predicted that mobile app streaming services will be on the rise, letting users access the said app directly from the Google Play store, removing the need to download it on their device first. Rather than just developing these instant apps, the developers will be required to use the same API and the same project and source code to add functionality to the apps.

 

6. Use of Swift for iOS: Owing to its brand presence, Apple sets the trends and the rest of the mobile app development industry follows it. Moreover, Swift has been received well by developers as a result of its new features and capabilities. With Apple putting its efforts behind the programming language, Swift will continue to grow and expand in 2017 and beyond. Android may or may not follow suit. There have certainly been speculations about it.

 

Recommended Reading: 8 Advantages of Using Swift for iOS Development

 

7. Cloud-Based App Development: Despite maintaining the same user experience and data across various devices, cloud-based apps don’t take up as much space as non-cloud-based apps. For the user, it means efficiency.

 

8. IoT-Based Mobile App Development: The demand to develop apps for smartphones that are required to aid most Internet of Things solutions will continue to grow. Some IoT-based solutions include smart homes, smart cities, connected cars, smart healthcare, and transportation systems. Equally important will be the IoT security apps, as privacy will likely become a concern for both the end user, as well as the companies who will provide these apps.

 

9. Mobile App Security: As mentioned above, the demand for the development of apps that guarantee security and safety for both developers and business owners with apps will be higher than ever. As an attempt to combat the potential risks, the mobile app development industry is likely to have high demand for authentication algorithms, such as two-step user authentication. Take a look at our article, How Biometric Authentication is Shaping the Future of Mobile Banking to learn how companies are using complex authentication algorithms for better security. 

User Behaviors Are Changing

On-Demand Services: Meeker addressed the growing on-demand economy that is driven by companies such as Uber and Lyft. Freelancers make up a significant part of the worker population, and now comprise 34% of the U.S. workforce. Many freelancers are using services like Airbnb, Lyft, and Uber to make money because of the flexible lifestyle they are afforded. Many of these freelance on-demand workers (about 25%) work for not just one service, but for multiple. As workers desire a more flexible lifestyle and consumers expect immediate products and services, this will result in a surge of on-demand service apps.

 

User-Generated Content: Facebook, Snapchat, and Instagram have paved the way for users to create their own content. Meeker states that this trend is only going to incline, and is already gaining popularity in areas like consumer reviews.

 

Mobile Messaging Apps:  Messaging apps have skyrocketed in popularity as these platforms are enabling brands to connect directly with their users, providing an all-encompassing experience. For example, users can now use messaging to engage with brands (via chatbot or a direct chat), watch videos, pay friends and family directly through messaging, receive customer support, etc. As companies recognize where the user is, they’re able to reap the benefits of messaging for business transactions and services.

 

The messaging apps such as WhatsApp, and Facebook Messenger, are growing at a significant pace and will eventually evolve into global communication hubs, Meeker stated. Asian messaging apps such as China’s WeChat, and Japan’s Line, are currently setting new standards, adding features like commerce, games, delivery, and more. We definitely expect U.S. apps to leverage this strategy to grow their platforms.

 

Mobile is on the radar of nearly every company right now as there’s a new sense of urgency to deeply engage with their consumers. With over 315 slides in Meeker’s data-packed Internet Trend report, it’s apparent that opportunity is much more significant for those that find new ways to leverage technology to innovate and increase efficiency for both consumers and companies. Companies that embrace these trends will be the ones to experience the most success in the app market, as Meeker states, “There are few companies that will win- but those who do will win big.”

 

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Britt Armour
Britt Armour

Digital Marketing Specialist