‘App economy’ could be worth €63bn in 5 years

Businesses and individuals developing and selling smartphone and computer apps in the EU earned €17.5bn last year, a figure that could rise to €63bn in just five years.

However, while the developer workforce could grow from 1m to 2.8m by 2018, when additional support and marketing staff are included, jobs supported by the “app economy” could increase from 1.8m to 4.8m in the same five-year period.

The figures emerge from research for the EU Commission, as part of the Eurapp project run by John Breslin of NUI Galway’s Insight Centre for Data Analytics and Giagom Research.

While €6bn of last year’s estimated €17.5bn revenue came from app sales, in-app spending for virtual goods and advertising, the other almost two thirds was spent on contract labour. Much of this “developer-for-hire business” is for companies using apps to support and market their mainstream offerings.

“Much of the economic activity is driven by independent developers, including start-ups and hobbyists, as well as big companies like Angry Birds creator Rovio and enterprise software supplier SAP,” said the report. “But you might be surprised how big a role is played by companies whose primary business isn’t apps: companies in financial services, retail, packaged goods, media, and so on.”

Based on surveys with smaller independent developers, and with in-house departments designing apps for their company’s main business, the research identified opportunities and bottlenecks for potential growth. The development of apps for others is the strategy of 42% of independents, and the report suggests this is a more promising avenue than charging for apps or in-app features — practices mostly found in gaming and subscription music services.

“At the same time, the app advertising market is fragmented across a number of ad networks, and Google and Facebook currently dominate global mobile ad revenues,” said the analysis by Giagom’s Mark Mulligan and David Card.

It also emerged that half of in-house developers also use third-party developers, an area that shows potential for growth.

Mr Breslin said that some Irish success stories include music discovery app Soundwave — whose founders include two east Cork developers — and Galway-based Pocket Anatomy, which has a number of popular medical education apps. There is also, he said, potential for the market to be exploited here with the right supports in place.

“There’s a lack of app development courses, both mobile and web app development,” said Mr Breslin. “But there are some mobile app development modules and people are seeing the importance of it, and there is also the informal route of supporting initiatives like CoderDojo.”

Kicking on

Haris Khan’s love of sport and computer games have helped him become one of the world’s youngest app developers.

Super Soccer Kicks works on Apple’s iPhone, iPad, and iPod Touch, and was launched last Friday — just days before Haris’s 11th birthday.

He has seen nearly 400 downloads of the free app in the last week, but is already working on a number of new games. His aptitude for computers is probably in the blood, as mum Kiran is a graphic designer and dad Mubarak works for Apple.

The Pakistani couple met and married in Germany and moved to Ireland in 2008, soon after Haris’s sister Simra was born. They said our excellent schools were key for moving to Ireland.

Haris’s principal at Scoil Eoin in Ballincollig, Co Cork, Gobnait Uí Nuanáin, said it is a fantastic achievement for Haris, who she said is an excellent student as well as a keen computer enthusiast.