While Apple Inc. has been working with developers in China who write apps for the iPhone, there are still challenges.
China is a huge market, and in fact mobile app downloads there outpaced the U.S. However, the U.S. leads in revenue, according to research firm App Annie, with Japan in the number two spot and China ranked number three.
According to Bloomberg News, getting users to pay for apps generates the kind of revenue (for developers as well as Apple) that grows the marketplace exponentially.
“The rise of China’s interest in developing software for Apple’s platform underscores the changing economics of the company’s ecosystem,” notes Bloomberg. “(Apple CEO Tim) Cook says it’s only a matter of time before China is the company’s largest overall market and he’s rushing to double the number of retail stores there by mid-2016 after introducing larger-screened iPhones last year that appeal more to local tastes.”
But there are roadblocks.
“It’s going to be tricky just because the buying of apps is not as big there,” explained Ben Bajarin, an analyst at Creative Strategies LLC. “It’s hard to say that overnight all of a sudden people are going to start spending on apps.”
Increasing the demand side of the equation is part of Apple’s strategy, according to Neil Cybart, an independent analyst who founded the website Above Avalon, which covers Apple’s business.
“Apple’s strategy has primarily focused on how to boost demand for iOS apps,” said Cybart. “The theory being it would be a lot easier to entice developers when you have a large user base of highly engaged users ready to pay for your apps. You are seeing careful and deliberate infrastructure build-out in order to put the iPhone in front of more people in China.”
Enticing app developers in China is also part of the strategy. And it appears to be working.
“If Web traffic is any indication, interest from Chinese developers has grown stronger since last year,” the report concludes. “In the past four weeks, traffic coming from China to Apple’s developer Web page for the conference has risen to about 19 percent of the total, compared with 3.9 percent during the same period a year ago.”