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Copyright Lisa Clarke

There has been a lot of chatter on the Internets about unbundling of mobile apps. Tech media’s interest has been piqued by some larger brands jumping onto this bandwagon – examples include Microsoft, Twitter and Foursquare.

It’s not a new strategy. Featurephone apps companies used this for a long time.  Several smartphone app publishers have had an owned & operated network of apps right from the beginning – examples include Zynga, King, Supercell, Smule and Outfit7.  Incumbent media companies like CBS, News Corp, Viacom, Time Warner, Walt Disney and (in India) Times Internet have also had these networks for a while.  Established Internet companies like Facebook and Google have had networks, built organically and through acquisition.

I think unbundling is a strategy that has not yet been applied with vigor in the emerging markets on smartphones. I think there are potentially disproportionate advantages to be had by unbundling in countries like India, in the short- to medium-term. Why is this? Because low device memory limits (typically less than 16 Gb), low bandwidth limits (mostly 2G) and relatively high bandwidth prices result in dramatic drops in conversion rates, download success rates and retention rates as app size increases. Also, in my opinion, discovery on the app stores is easier when there is a single focused value prop (kind of the approach that Whatsapp has taken with a singular focus on messaging).

Conversion rates drop with package size.  Below is data from a global mobile analytics and advertising vendor. Data is global and is an average across all advertising products.

App Size Conversion rate
0-5MB 1.00%
5-50MB 0.80%
50MB+ 0.42%

 

Download success rate is nowhere near 100% (even on Android). The graph below is from China. I would imagine that the drop-off in India is steeper, given the greater prevalence of 2G and higher proportion of lower-end phones.

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Retention rates drop with larger file size. Large apps are 33% less likely to be retained after 1 month although iOS users are 12% more likely to retain an app than Android users, according to Flurry.

App sizes vary by app type and platform. Below is some data I gathered from the iOS and Play stores. Basic utilities are 1-10MBs. Communications and social media apps are 20-30MB. Most casual games are 40-50MB. Most mid-core games are 300-800MB.  From my not-so-scientific sample list below, Android apps are on average 37% smaller in package size than the iOS app from the same publisher.

chart

So, what is an ideal app size, especially in markets like India with challenged infrastructure?

The ideal size is 10-15MB globally. Idea size for an app for tier 2/3 countries (like India) is below 5MB.  500MB+ is a non-starter. At 50MB+ the conversion rates fall off dramatically.  On Android and iOS, conversion rates dip by 50% in tier 1 nations for non-game apps above 50MB.  In tier 2 and tier 3 nations, conversion rates dip by 50% for games above 15MB.

To lower the cost of loyal customer acquisition (a function of conversion rate, download success rate and retention rate), unbundling in emerging markets makes positioning more clear and therefore discovery is easier, in my opinion.  Unbundling also decreases the hits-driven nature of mobile apps businesses.  And finally, cross-promotion within an owned & operated network of apps also dramatically reduces the cost of introducing a new app into the app network.

There is a cost to this strategy though.  The engineering and products team now need to maintain multiple code-bases and roadmaps.  Initially building out the network may required multiple marketing pushes and already strained marketing budgets may not be enough to get apps into into the high ranks on the app stores.  Unpopular functionality, separated out into an app, will not get downloaded/used.

Some things to keep in mind if you are thinking about going down this route: You need to maintain a strong brand identity across all apps in the network to build company value and cross-promotion ability.  Also need a common ID system to build and leverage customer data across multiple apps. And a good cross-promotion engine is needed. Tapjoy and Flurry are leaders in this category but there are lots of other options.  To reduce app package size, you will need to rationalize your third-party SDKs, remove most heavy media files and reduce functionality dramatically.

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