Should Automakers Build App Stores?
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- 1. APPS 4 CARS GENIVI All Members MeetingApril 25, 2012 Ludovic Privat1
2. AutomotiveWirelessConsumer Electronics 2 3. Automotive AutomotiveAppsWireless 3 4. Topics of the day App Store economics What App Strategy for Car Makers? Should you build an app store? If not what to do?4 5. App Store EconomicsChoice Volume Price (low)5 6. Choice NB ofdownloads NB of Apps550,000+ Applications on Apple App Store 6 7. Volume7 8. Low price Current average app price: $2.02 Current average game price: $1.02 Current average overall price: $1.88Apple App store - April 2012Source: 148apps.biz 8 9. Low price Free $0.99 $1.99 $2.99 $3.99 $4.99 $5.99 & up46.43% 25.77 %10.73 % 5.15 % 2.59 % 2.93 %6.4 %Percentage of app in each price category Apple App Store (April 2011)Source: 148apps.biz9 10. Low price U.S. consumers who have never paid more than $1 for an app: iPhone owners: 45% Android owners: 62% Blackberry owners: 63%TeleNav survey - 1,000 respondents (Aug 2011)10 11. Auto appsHow much would they pay (US)?11 12. Auto appsHow much would they pay (UK)?12 13. Auto appsHow much would they pay (Ger)?13 14. App Stores Revenue Apple app store 550,00 Apps available, 25 Billion Apps downloaded until March 2012 $4 Billion paid to developers (to date); $2.1Billion paid in 2011 Average revenue: $0.16 / app Google app store 400,000 Apps available, 10 Billion Apps downloaded (Dec. 2011) Google Play (Android Market) is said to be 23% of iOS revenue peractive user. In-app advertising Estimated at around $200-$300 million in 2011 14 15. App Stores Revenue2011$4B15 16. App Store failuresHandset MakerOperator16 17. Long term model? One closed garden replaces another From wireless operators lock-upto Apple/Google Lock-up New forces: Competing stores on Android(Amazon, GetJar & others) HTML 5 apps, mobile payment 17 18. In-car Apps 18 19. In-car App avoursBuilt-in Beamed-in Brought-in 19 20. Are Car ManufacturersApp stores sustainable? 20 21. Mobile industry480 Million smartphones sold in 20112 dominant platforms: iOS & Android Large addressable marketConsumer interestdeveloper interestChoice Developers are21 the real currency 22. Car industry60 Million passenger cars sold in 2011 large fragmentation per brand Small addressable marketLittle developerNo consumer interest interest Little Choice22 23. Wireless innovationspeed Smartphone & tablets are becomingpowerhouses: CPU, GPU, Sensors Product & innovation cycles are extremelyfast, driven by intense market competition In contrast car life cycle remains prettystable23 24. Consumer interest for in-dash app stores? Likely to be seen as duplication of theirsmartphone apps High cost of ownership (connectivity cost) limited success of connected PND (25-30%of subscription renewal) demonstratesdrivers unwillingness to pay for anothersubscription 24 25. Built-in app store? 25 26. App opportunities for car makers26 27. Which apps? Lifestyle apps: Internet radio, Twitter,Facebook, etc.? Driver apps: navigation, trafc, weather,etc.? Vehicle apps: eco-driving, remote dooropening, tracking, monitoring, etc.?27 28. Key opportunities Focus on core competency: vehicle centric value-addedservices Piggyback on driver data plan when possible Big data opportunity about car knowledge (parts, etc...) Big data opportunity on driver knowledge (driverbehaviour analytics) Extended customer relationship over the full lifecycleof the car B2B monetization opportunities with third parties:insurance companies, car part suppliers, etc...28 29. Key takeaways App market is tough business Dont ght a lost battle against wirelessindustry giants Monetize opportunities based on vehicle-centric core competencies29 30. Thank [email protected]+33 6 22 05 61 38 Twitter: @gpsbusinessnewshttp://www.gpsbusinessnews.com 30