Vision 2014: New adventures in apps

Looking ahead to 2014, the landscape around apps across Asia will continue to be dynamic and fast-evolving. As ever-greater numbers of people become connected, and growth in the base of smartphones and tablets continues, the apps market opportunity will grow. Faster connections and broader 3G (and elsewhere 4G) coverage will ensure that better apps and connected service experiences can be (and are) delivered.

But 2014 will also bring greater innovation from app developers and OTT service providers in how they aim to monetize their offerings. The freemium model will continue to dominate, but there will be greater exploration of in-app advertising, sponsored content models and B2B partnerships to deliver offerings to consumers without directly charging them.

Very few operators will continue to try and offer full app store experiences, but operators will be anxious to retain relevance in the apps space. Instead, more will look to deliver app discovery portals or curated recommendations, alongside their own suite of apps, and agree to operator-billing relationships with leading app store providers.

They also have a real opportunity, through savvy strategic partnerships, to add genuine value to their customers through the free or discounted provision of popular apps and content - 2014 will see an increase in these activities. Access to premium music streaming or video-on-demand services and popular games will be among content bundled with mobile tariffs and data plans. If managed astutely, these will add value to consumers, encouraging loyalty while provoking the use of - and therefore need for - data services.

However, as a sizeable new audience of consumers from tier 3 cities and beyond, in markets such as China and India, become connected for the first time, they come with no exposure to the mobile apps and app store paradigm. If they find their needs catered to by web-based experiences and web-apps, 2014 could see the relevance of native app experiences reduced, as web-apps become increasingly versatile, capable and popular.

This would be by increment and evolution, not by revolution. But looking ahead, we could see popular local brands and internet services in key Asian markets start to look seriously at mobile strategies that are not centered around native apps.

Tim Shepard is a senior analyst at Canalys

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This article first published in Telecom Asia Vision 2014 Supplement

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