industry survey report on hong kong mobile apps industry
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Industry Survey ReportonHong KongMobile Apps Industry
OverviewBackgroundMethodologyIndustry LandscapeTechnologyMarket AnalysisBusiness Model Analysis
Background» The 1st mobile apps industry
survey in Hong Kong
» Present an up-to-date picture of the Hong Kong mobile apps industry
» 100 companies in the mobile apps industry participated in the survey
Methodology
1/ Focus Group 2/ Survey Content Design
3/ Survey Implementation 4/ Survey Report
INDUSTRY LANDSCAPE
Years a Company has been in Business
Over half (55%) of the companies were newly established (1-3 years). Overall, 81% of the companies have been established less than 10 years. The popularity of Smartphone apps facilitated the growth of a new industry.
55%
18%
8%
9%
10%
1-3 years4-6 years7-9 years10-12 years>12 years
Number of Employees
89.9% of the interviewed companies had below 50 staffs. It shows most of the Apps Development Companies are SMEs.
17.2%
42.4%
19.2%
11.1%
3.0%7.1%
1-34-1011-2021-5051-100>100
Person(s)
Yearly Revenue
Over 50% of the companies’ yearly revenue were less than HK$1million, showing that those companies were small business. Meanwhile, there were companies having over HK$20 million yearly revenue, making it a big business.
33.3%
17.8%18.9%
11.1%
5.6%
4.4% 8.9%
<HK$500,000HK$500,000-1,000,000HK$1,000,001-2,000,000HK$2,000,001-5,000,000HK$50,000,001-10,000,000HK$10,000,000-20,000,000>=HK$20,000,000
Mobile Apps Revenue Streams
Pay Per
Download
In-app Purch
ase
Freem
ium
Subscr
iption Fee
Advertisin
g
Commission
Client P
rojec
t/ Contra
ct Deve
lopment
0%
10%
20%
30%
40%
50%
7%
22%
9% 7%13%
6%
41%
012345
Least Important
MostImportant
Reasons for Turning Down a Deal
Lack of manpower (developers) (59%), pricing (72%) and customers’ requirements (49%) were the main reasons for the companies to turn down a deal.
Lack
of Manpower (
Developers)
Lack
of Manpower (
Project Managers)
Pricing
Lack
of Tech
nological S
upport
Legal Is
sues
Customer
Politica
l Issues
0%
20%
40%
60%
80%59.0%
23.0%
72.0%
23.0%9.0%
49.0%
5.0%
Reasons for the Founder to Start a Business
Most of the founders formed their new companies with the goal to own their brands / products (41%). They also incline to enjoy the freedom (36%) obtained in their own business.
Freedom
Higher Inco
me
Government S
upport fot S
tartups
Own brand/products
Low Entry
Barriers
0%
10%
20%
30%
40%
50%
36.0%
18.0% 17.0%
41.0%
16.0%
Funding Source
Over half (58%) of the interviewed companies were self-funded at the beginning of the business.
11.6%
58.1%
11.6%
3.5%
15.1%
Angel/Venture CapitalSelfFamily/FriendsBank FinancingGovernment Schemes
How old was the Founder?
87.3% of the founders were aged below 40, showing that this industry was in the hand of the young people.
3.6%
16.4%
32.7%
34.5%
12.7%
<2021-2425-2930-39>=40
Age
Company Expenses8.5%
4.3%
13.8%
12.8%60.6%
Staff Costs
11-20%21-30%31-40%41-50%>50%
61% of the companies spent over half of the revenue on staff. The costs of staff occupied a significant part of the company’s expenses.
Company Expenses
14.1%
30.4%
28.3%
14.1%
9.8%
1.1%2.2%
Rent
13.5%
64.0%
14.6%
4.5% 1.1% 2.2%
Utilities & Equipment
0%1-10%11-20%21-30%31-40%41-50%>50%
As some of the interviewed companies joined the incubation programs offered by different organizations, many of them had relatively less burden on rental and utilities & equipment.
Company Expenses5.4%
46.2%
23.7%
11.8%
6.5%5.4% 1.1%
Promotion & Marketing
0%1-10%11-20%21-30%31-40%41-50%>50%
Unlike other industries, the interviewed companies spent relatively low portion of their revenue on promotion and marketing. It may due to the nature and ecosystem of the business.
TECHNOLOGY
Technologies Used in Mobile Apps Last Year
Mobile Apps Companies in HK made use of a wide range of technologies on the Apps they developed. Among them, LBS, BLE and AR are the most popular ones.
Near Field Communica
tion (NFC
)
Bluetooth Low Energy (
BLE)
Ultrasound
Augmented Reality (A
R)
Loca
tion-based Servi
ces (
LBS)
0%
20%
40%
60%
80%
23%31%
14%
32%
58%
Product Development Time
Half of the interviewed developers took only 1-3 months for developing an app.
4%
50%39%
7%
1-4 weeks1-3 months4-12 months>1 year
Development Platforms / Tools in Use
Antenna Mobility Platform (AMP)Dojo Mobile
KonyMobileSmith
MoSyncJoyent
StackMobVerivo
Ansca Mobile Corona SDKAppcelerator Titanium
HerokuIBM Worklight
ParseRackspaceappMobi
Windows AzureRed Hat
PhoneGapUnity
Google App EnginejQuery Mobile
Amazon Web Services
1.0%1.0%1.0%1.0%1.0%
2.0%2.0%2.0%
3.0%4.0%4.0%4.0%
6.0%8.0%
10.0%12.0%
13.0%18.0%
27.0%31.0%
35.0%47.0%
Third-party APIs Used in Mobile Apps
Developers made use of thirty-party APIs to make the mobile apps more functional. In the survey, 67% interviewees connected their apps to analytics & 62% connected to social media.
Analytics
Geo/
Points-of-In
terest (POI)
Monetization
(ads, in-app purch
ases etc.
)
Payments
Push/SMS
Socia
l0%
20%
40%
60%
80%67%
32% 32%
52% 48%
62%
MARKET ANALYSIS
Most Popular App Platform
The current app market in Hong Kong was almost equally shared by iOS and Android mobile platforms while in the expected future the app market on Android would keep its share but that on iOS would be taken by other platforms such as HTML5.
38%
43%
2%1% 17%
Expected Future
iOS
Android
Windows Phone
BlackBerry
HTML5
46%
42%
1%2%
10%
Current
Geographical Focus of the Companies
Most of the interviewed companies focused on developing the market in Hong Kong.Not much resources was put to develop the market in mainland China and overseas; but it could be seen that developers were more inclined to work on the overseas market instead of the mainland China one.
Hong Kong Mainland China Overseas0%
10%
20%
30%
40%
50%
0%1-20%21-40%41-60%61-80%81-100%
Attempts to Enter Domestic Market of Mainland China
With the growth of Mainland market, 28% of interviewees had entered the domestic market and 24% of them were still in operation. Besides, 34% interviewees were planning to enter the domestic market.
24.2%
4.0%
34.3%
37.4%Yes, still in operation
Yes, operation terminated
No, but planning to
No, with no plans yet
Problems Encountered in the Domestic Market of Mainland China
Among the companies which had made attempts in entering the domestic market of mainland China, over 45% of them were worried about the plagiarism issues. Meanwhile, they also faced difficulties in applying for licenses and found IP protection insufficient.
Paymen
t Dela
ys
Difficu
lties in Applyi
ng for V
arious L
icenses
Plagiar
ism
Certificati
on Problems
Insufficie
nt IP Protec
tion0%
10%20%30%40%50%
28.6%
42.9% 46.4%
17.9%
42.9%
RECOMMENDATIONS
Areas for More Government Support
Policy
Funding for starting businesses
Education
Funding for training
Funding for entering international awards/competitions
Promotion
0.0% 10.0% 20.0% 30.0% 40.0% 50.0%
54321
Sufficient
Insufficient
Recommendations
Policies Education
Talents Capital Branding/Promotion
RecommendationsKey Findings Majority of the companies focuses business on
Client Projects Product Development
Recommendations Develop business partners to widen the
customer base Enter the market of mainland China WTIA’s “Made in Hong Kong” Smartphone App
Gallery
“Made in Hong Kong”Smartphone App Gallery
“Made in Hong Kong” Smartphone Application Gallery 500 local developed app will be recruited Showcase outstanding local apps
Hold seminars and Join ICT Expos in China Promote the platform in both Hong Kong and China
Organize business networking sessions Help Hong Kong app developers meet with potential partners in
mainland China
Conduct training courses Equip app developers with knowledge of the Mainland market
Produce guidelines Accessible for the public
End of Report
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