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IDC analyst: APIs are new trading currency for mobile marketers

NEW YORK ? An International Data Corporation analyst at Mobile Commerce Daily's Mobile Research Summit: Data & Insights 2015 said that APIs are becoming a new form of trading currency, and urged marketers to ensure their strategies are up to par as the application market grows more saturated.

During the ?IDC: Customer Reach and Relations in the Next-Gen Mobile App Era? session, the executive shared statistics pertaining to app monetization and the amount of apps currently available for iOS and Android platforms. He also predicated a new wave of innovation to crest soon, thanks to device-to-device technologies such as LTE Direct.

?I do think the epicenter of value creation in mobile moves up into the app environment,? said John Jackson, program vice president for mobility research at IDC, Framingham, MA. ?APIs are a new form of trading currency. 

?Have an API strategy," he said. There?s another wave of innovation poised to be unleashed at the end of the network as a consequence of technologies like LTE Direct.?

Mobility?s influence
The executive revealed that IDC projects 150 billion app downloads to take place this year, with the number expected to jump to 196 billion in the coming years. While not all apps may be effective at boosting customer engagement, their influence on the mobile sector is indisputable.

Mr. Jackson referred to apps as essentially being the default mechanism for interaction with smartphones.

?We have likened apps to the new face of the Internet,? he said. ?Mobility is a core part of our lives.

?We all know when we walk down the street, we don?t look at each other anymore; we look through our phones, down at our shoes, for better or worse.?

This year, 2.9 million apps are available across all platforms, up from 2.3 million last year. The sheer amount of options indicates not all brands can find success on consumers? prime real estate on personal devices, although monetization is very possible when approached correctly.

On average, consumers are downloading and installing approximately 45 apps per year for each device. For iOS devices, the direct revenue clocks in at around 25 dollars per device, while Android claims 7 dollars, respectively.

However, 83 percent of apps live on the Google Play and iTunes App stores that are intended to monetize use the freemium model, which typically offers a complementary download and then tries to upsell upgrades or additional features to users.

In fact, 70 percent of transactions within apps are driven by about five percent of active users.

?This suggests to me that the freemium model is successful,? Mr. Jackson said. ?It?s relatively mature, it?s relatively established.?

Hyperconnectivity prevalence
The popularity of social networks on mobile, as well as the growing market for mobile search, has contributed to the hyperconnectivity that consumers are constantly living in. This notion certainly benefits social networks, but can also be leveraged by marketers.

?Apps are becoming hyper-connected,? Mr. Jackson said. ?In some ways, it?s analogous to what happened in the HTTP domain.

?Eighty-three percent of the top-grossing apps on Google Play and iOS in the U.S., according to Facebook, use Facebook Log In. It's about multiplying network effects.?

He also predicted that a new wave of innovation will occur as potential rises for apps to talk to each other without hitting a server. Technologies such as LTE Direct will be able to facilitate this.

Lastly, the smartwatch is a device which will undoubtedly cement itself into consumers? lives, although it may take some more time to fully assimilate.

?I was of the opinion that the wrist-born screen had the potential to easily be the world?s most prolifically glanced-at device,? Mr. Jackson said. ?The smartphone lives in a pocket or purse.

?This thing is immediately available to you. Can it tell you what you want to know??

Final Take
Alex Samuely is an editorial assistant on Mobile Marketer, New York