distimo publication june 2012

7/31/2019 Distimo Publication June 2012

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Distimo was founded to solve the challenges created by a widely fragmented app store marketplace filled

with equally fragmented information and statistics.

Distimo was launched shortly after the introduction of the first app store. App stores have clearly shown

since that time that they are the way forward for content distribution. The app store model offers an

enormous opportunity for developers to get their content out and dramatically improves content discovery

by consumers. However, the mobile market has long been characterized by fragmentation, which is

also displayed in the wide range of mobile application stores that were launched from 2009 on.

Distimo is a privately held company based in Utrecht, The Netherlands. Learn more: www.distimo.com

Emerging App Markets: Russia, Brazil, Mexico and Turkey

By Hendrik Koekkoek, Analyst at Distimo

Distimo 2012, some rights reserved

Apple App Store for iPad

Apple App Store for iPhone

Google Play


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Distimo Publication - June 2012

Distimo 2012, some rights reserved.All trademarks are the property of their respective owners.

Exactly one year ago we wrote a publication about the rise of the application market in a

number of East Asian countries. Over the course of the past year the application market

in those same East Asian countries continued to grow at a high pace, while at the sametime other markets also started to adopt smartphones. We analyzed the application

market in the top 30 countries over the course of the past year in terms of revenue, and

found four emerging countries to be especially interesting: Brazil, Mexico, Russia and

Turkey. All developers that develop for multiple markets should keep an eye on these

countries, as they showed strong growth during the past year, and are likely to continue

or even accelerate their growth.

This report covers four of the top growth markets for applications: Brazil, Mexico,

Russia and Turkey. All revenue data in this report covers the revenues generated by the

top 200 highest grossing applications, unless otherwise noted. The analysis is limited

to the 30 countries that have generated the most revenue during May 2012.1

The major findings are:

Excluding the East Asian countries, Russia, Brazil, Mexico and Turkey are the fastest

growing markets in terms of revenues generated in the Apple App Store for iPhone

with yearly growth rates that range between 54% and 115%.

The growth in app revenue in Russia, Brazil, Mexico and Turkey since September

2011 ranges between 76% and 91% in the Apple App Store for iPad. For Russia, the

growth in revenue in Google Play is 250% - more than twice the growth rate of the

US.

Only 4% of all apps in the Apple App Store for iPhone are available in Russian,

however, 70% of the revenue from the 200 top grossing apps is generated by apps

that are translated into Russian.

Since games became available in April 2012 in the Apple App Store for iPhone in

Brazil, the revenues increased by more than 80% in one month alone, making Brazil

the single largest app market in Latin America.

The preferences for types of apps differ largely per country. In Russia, the Books

category is a top four category in terms of generated revenue. In Brazil and Turkey,

the Books category ranks among the least successful type of applications.

Paid apps are not popular in Turkey: only 2 paid apps are downloaded for every 100

downloaded free apps.

More than half of the revenue is generated by free apps with in-app purchases in

Turkey and Russia. Alternatively, in Mexico and Brazil, paid apps without in-app

purchases is the most successful business model. purchases is the most successful

business model.

NEW AND NOTEWORTHY

1 Australia, Austria, Belgium, Brazil, Canada, China, Denmark, France, Germany, Hong Kong, Italy, Japan,

Korea, Kuwait, Malaysia, Mexico, Netherlands, New Zealand, Norway, Russia, Singapore, Spain, Sweden,

Switzerland, Taiwan, Thailand, Turkey, United Arab Emirates, United Kingdom, United States


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GROWTH RATEs YEAR-ON-YEAR

Since May 2011, the total overall revenue generated by the top 200 highest grossing

apps in every country increased by 67% in the Apple App Store for iPhone. In the Apple

App Store for iPad, this growth was even higher at 76%.

We analyzed the top 30 countries in terms of generated revenue in the Apple App Store

for iPhone in order to find the most compelling growth markets. We examined the top

30 countries only, in order to filter out the less relevant countries in terms of revenue.

The top ten countries in terms of yearly growth in revenue are presented in the table

below.

The rise of the Asian countries we identified one year ago has not yet ceased or showed

signs of slowing. Five out of the ten fastest growing markets in the world are still

countries in East Asia. Besides these East Asian countries, Russia, Brazil, Mexico and

Turkey are among some of the more compelling emerging app store markets. All of

these four countries showed a higher year-on-year growth in revenue than the US. The

U.S. itself ranks as the thirteenth fastest growing county at 44%. The countries featured

in this months report are the four fastest growing countries outside of East Asia.

Two years ago, the total overall revenue generated in the Apple App Store was

predominantly generated by the United States. Looking at the revenues generated by

the top 200 highest grossing apps per country in June 2010, the US was responsible for

45% of this revenue in the Apple App Store for iPhone.

The current state of the Apple App Store for iPhone shows that the top 200 highest

grossing applications in the U.S. generate 31% of the top 200 highest grossing

applications of all countries combined. In other words, the share of revenue generated

outside the US increased significantly over the past two years. This shows that the app

industry is truly becoming more and more of a global phenomenon.

One year ago, we wrote about the rise of Asia in the app market. In that report, our

research revealed that China was the second largest app market in terms of downloads.

The U.S. was no longer the only market to focus on when publishing applications in the

Apple App Store.

This report will focus on the current state of the app markets. We will identify some of

the growing markets in terms of revenue in the app stores. We will also analyze how the

markets differ from each other and what factors developers should keep in mind when

developing for these markets. As a comparison, we will also benchmark these emerging

app market countries against the U.S.


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Combined, the top 200 highest grossing applications in the Apple App Store for iPhone

in these four countries generated $160K every day during May 2012. In order to examine

the similarities and differences are between these four fast growing app markets, we

must first look at the month-on-month growth for each of these markets. The graph

below shows the monthly revenue per month. Revenues generated in May 2011 are set

to an index of 100 for all countries in the graph. The U.S. is added in the graph as a

point of reference.

Top Fatet Growing Countrie In Term Of Revenue In The Appe App store for iPhoneBased on revenue of top 200 highest grossing apps, top 30 countries are analyzed, May 2011 - May 2012

Japan

Russia

China

Taiwan

Thailand

Brazil

Mexico

Korea

Turkey

Canada

1

2

3

4

5

6

7

8

9

10

560%

115%

109%

101%

84%

83%

63%

59%

54%

47%

Ran Country Year-on-year growth

Index Of Daiy Revenue Per Month In The Appe App store for iPhoneMay 2011 = 100, top 200 highest grossing apps

0

50

100

150

200

250

United States

RussiaBrazil

Mexico

Turkey


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One of the most remarkable observations from this graph is the high growth of revenue

in Brazil during April 2012. The most important reason for this is that there were no

games available in the Apple App Store in Brazil before April 2012. When games became

available in this country, the generated revenues jumped by more than 80%. Brazil is

now the top revenue generating app store market in Latin America.

Mexico, one of the largest growth markets as well, is the second largest market in Latin

America in terms of revenue. Revenues generated in Mexico during the last year moved

almost exactly in line with the U.S. However, in May 2012, when almost all of the app

store markets worldwide experienced a decline in revenues, the revenues in the U.S.

dropped significantly more than in Mexico.

Turkey and Russia showed the most consistent growth of these four countries. Since

September 2011, the app store revenues generated from these countries grew almost

continuously month-on-month, while in the other countries there have been months

where revenues dropped significantly during the same period.

The numbers above reveal that these four markets are all high potential markets for

success in the Apple App Store for iPhone. However, the potential is not limited to the

Apple App Store for iPhone. App revenues surged as well in the Apple App Store for iPad

and Google Play in most of these countries as well.

When we look at the iPad, the results for the four emerging countries are even more

remarkable. We looked only at the growth rates since September 2011, as the Apple

App Store for iPad was not available in all countries (e.g. Turkey) prior to that month.

The four emerging iPhone countries are also among the seven fastest growing iPadcountries in terms of revenue, together with South Korea, Australia and Canada. Growth

rates for the four countries range between 76% (Russia) and 91% (Brazil). Therefore,

the growth rates in these countries are larger than the U.S. and all of the East Asian

countries, with South Korea being the only exception. Russia is now the seventh largest

country for the iPad in terms of generated revenues.

We have also analyzed the revenues for the US and Russia in Google Play. For these

countries, revenues have increased even faster than in the Apple App Store for iPhone

and iPad. The revenue from Google Play in the U.S. has increased by 124% since August

2011 (Note: this is the first month that Distimo has revenue data for Google Play),however the revenues in Russia increased by 250% in the same period. Revenues from

Google Play in Russia are now 38% of those generated in the Apple App Store for iPhone

in Russia.


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The story outlined above shows that these countries have tremendous potential. For

developers who want to start publishing apps in these markets, it is interesting to see

whether the markets are different from each other and different from the largest market

for apps, the U.S.

Over the course of the past year, in-app purchases have become the main source of

income for many developers. In the U.S., 66% of the revenue from the top 200 highest

grossing apps is generated by free apps with in-app purchases (freemium apps), and

only 13% of the revenue is generated by paid applications that dont have any in-app

purchases. The US. is ahead of the other countries in terms of the success of in- app

purchases and freemium apps, however, freemium apps generate more than 50% of the

revenue of the top grossing apps as well in Russia and Turkey. In the two Latin American

countries, Brazil and Mexico, freemium apps are less successful. Around 40% of therevenue is generated by paid applications without in-app purchases in these countries.

This shows the differences in monetization strategies per country. Developers should

keep this in mind when focusing on one of these growth markets.

DIFFERENCEs AND sIMIlARITIEs bETWEEN THE MARkETs

Revenue share Per buine Mode In The Appe App store For iPhoneTop 200 highest grossing applications, May 2012

0% 100%

Turkey

Russia

Mexico

Brazil

Paid Applications Paid Applications With In-App Purchases Free Applications With In-App Purchases

The findings above are also reflected in the download volumes. We calculated the ratio

of downloads generated by the top 200 free compared versus downloads generated by

the top 200 paid applications. The free-to-paid ratio is higher in favor of paid apps inMexico among these four countries. For every 100 downloaded top 200 free apps, six

top 200 paid apps are downloaded. It is the most difficult to sell apps in Turkey: for

every 100 free apps only two paid apps are downloaded. Even though freemium apps

are successful in the U.S., the free-to-paid ratio is most favorable to paid apps in the U.S.

compared to the other four countries.

Numer Of Downoaded Paid App For Every 100 Downoaded Free App

5.4brazi 5.0Ruia 2.2Turey5.9Mexico 7.5U.s.

Based on top 200 paid applications and top 200 free applications in the Apple App Store for iPhone, May 2012


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It is not just the success of the various business models that are different across these

four countries. We analyzed the top 200 highest grossing applications in May 2012

per country, and discovered that consumer preferences are largely different in thesecountries. The graph below shows the proportion of the 200 highest grossing apps

in these countries that are among the 200 highest grossing applications in the U.S.

as well. It shows that only a small proportion of the most successful applications in a

country are also successful in the U.S. Mexico is the market that is most similar to the

U.S. where 43% of the 200 highest grossing applications in Mexico are also among the

200 highest grossing applications in the U.S. This proportion is much lower in Turkey

with only 28%, which reveals the strong local preferences of this country. A successful

app in the U.S. will not automatically be a successful app in one of these countries. To

illustrate the local preferences of consumers in these countries, the most popular free

and paid applications per country that are locally popular only is presented at the endof this report for the Apple App Store and Google Play.

lOCAl PREFERENCEs

Proportion of top 200 highet groing app per country that i among top 200 highet groing app

in the Us a weMay 2012, Apple App Store for iPhone

0%

100%

Brazil Mexico Russia Turkey

We assessed the revenue generated by the top 100 highest grossing applications

per category to further analyze the local preferences per country. We have ordered

the categories by amount of revenue generated. The graph below shows the revenue

generated by the top 100 highest grossing apps in a category as a proportion of the

revenue generated by the top 100 most grossing apps in all categories combined (forthe top categories).

In all of the countries, Games is the category that generates the most revenue.

Interestingly, games have only been available in the Brazilian App Store since April

2012, but the proportion of revenue generated by the Games category is relatively small

compared to other countries. In all countries, Entertainment is a top category as well.

In Brazil, the Navigation category is the second highest revenue generation category

with 12%. The Navigation category comes in at the ninth spot with only 3% in Mexico.

Another remarkable difference is the success of the Books category in Russia. In Turkey

and Brazil, the Books category is the second least and fourth least successful category,

respectively. Hence, publishing a book might be a good idea in Russia, but you might

want to rethink your strategy if you want to publish a book in the App Store for iPhone

in Brazil or Turkey.


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When publishing an app in countries other than the United States, it is important toremember that consumers like to use apps that are available in their own language.

The graph shows the proportion of revenue generated by applications in the main local

language of that country in the Apple App Store for iPhone. For example, in Russia

more than 70% of the revenue is generated by applications in Russian. In Turkey, the

proportion of revenue generated by applications in Turkish is only 30%. This might

seem low, however, it should be noted that less than 2% of all apps in the Apple App

Store for iPhone are available in Turkish (red columns). When comparing the proportion

of revenue generated by apps in the local language with the availability of apps in

their local language, it shows that consumers are keen to download the apps that are

available in their local language.

0% 30% 60%

Entertainment

Social Networking

Navigation

All Games

0% 30% 60%

Photography

Productivity

Entertainment

All Games

0% 30% 60%

Books

Entertainment

Navigation

All Games

0% 30% 60%

Entertainment

Social Networking

Navigation

All Games

Top Categorie Per Country In The Appe App store For iPhone, May 2012Revenue generated by the top 100 highest grossing apps per category as a proportion of the sum of the

revenue generated by the top 100 highest grossing apps per category

brazi Ruia

TureyMexico

lANGUAGEs

0% 40% 80%

Brazil (Portugese)

Mexico (Spanish)

Russia (Russian)

Turkey (Turkish)

Proportion Of Revenue Generated by Appication Avaiae In The loca language And Proportion Of

App Avaiae In loca languageTop 200 most grossing applications, Apple App Store for iPhone, May 2012

Proportion of Revenue Generated By Apps In Local Language Proportion Of All iPhone Apps Available In Local Language


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This report analyzed four of the most compelling new growth markets in the app store

landscape. Brazil, Mexico, Russia and Turkey are all markets that showed a higher yearly

growth in terms of revenue than the United States did. The high growth makes these

markets interesting for developers. We also mentioned several differences in consumer

preferences in this report that developers should take into account when entering these

markets. Success in the U.S. wont necessarily guarantee success in these markets.

Customers always prefer apps that are translated in their own language. It is important

to review your business models or the type of app if you aim for success in a specific

country as well.

RECAP


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MOsT sUCCEssFUl lOCAllY POPUlAR FREE AND PAID APPlICATIONAPPlE APP sTORE FOR IPHONE - MAY 2012

Rank Application Category Price

Brazil For our joy by Asnis Apps Entertainment free

BrazilDicas e Truques - Segredos do iPhoneby Intelligenti Ltd

Education $0.99

MexicoApp Del Dia - Descarga gratis unaaplicacin al da ! by GuillaumeSZTEJN-BERG

Lifestyle free

Mexico TV Mexico App by Enimafix Software Entertainment $0.88

Russia Waterbalance by WaterbalanceHealthcare & Fit-ness

free

Russia TV Russia Premium by IOS Premium Entertainment $0.99

TurkeyGaranti Cep Subesi by T. GarantiBankasi A.S.

Finance free

Turkey Zil Sesleri by UGR TEKNOLOJI Entertainment $0.99


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MOsT sUCCEssFUl lOCAllY POPUlAR FREE AND PAID APPlICATIONAPPlE APP sTORE FOR IPAD - MAY 2012


BrazilAppGrtis para iPad - 1 app grtis paraiPad todo dia by iMediapp

Entertainment free

Brazil Jogo das Bolinhas by Renato PessanhaEntertainment,Games-Kids,Games-Puzzle

$0.99

Mexico Cinpolis by IA interactive Entertainment free

MexicoEl Chavo. A Carnival in the Apart-

ments. by Televisa

Games-Arcade,

Games-Kids$0.88

Russia Stream by Stream, LLC (Russia) Entertainment free

Russia TV Russia Premium by IOS Premium Entertainment $0.99

TurkeyMilliyet Gazete by Milliyet GazetecilikYayincilik Anonim Sirketi

News free

TurkeyFilm Dizi izle - Pop Corn Player byFatih Dursun

Entertainment $0.99


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MOsT sUCCEssFUl lOCAllY POPUlAR FREE AND PAID APPlICATIONGOOGlE PlAY - MAY 2012


Brazil Palco MP3 Music & Audio free

Brazil SVOX Br. Portug. Luciana Voice Communication $2.99

Mexico Descargar Musica MP3 Media & Video free

Mexico Deep Space LWP!Live Wallpaper,

Personalization$0.99

Russia VKontakte Social, Widgets free

Russia Dr.Web Anti-virus Tools, Widgets $4.99

Turkey OkeyGames-Cards &Casino

free

Turkey S-Banking Finance $0.85


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Di ti 2012 i ht d

DIsTIMO CUsTOM REPORTs

CONTACT Us

AbOUT DIsTIMO

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of providing specific mobile application store analytics that are relevant to your

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that Distimo can provide, please visit our Report product page.

For sales inquiries, please contact Remco van den Elzen, VP Business Development at

[email protected] or call +31 30 82 00 567. For press inquiries please contactMindy M. Hull at [email protected] or call +31 62 504 7680 (EU) or

+1 415 889 9977 (USA).

Distimo is the innovative app store analytics company built to solve the challenges

created by a widely fragmented app store marketplace filled with equally fragmented

information and statistics.

Distimo Report provides in-depth customized reports for carriers and operators andoffers valuable insight into important trends happening within different application

stores around the world. Custom reports are currently available for the Apple App Store

for iPhone, Apple App Store for iPad, Apple Mac App Store, Amazon Appstore, BlackBerry

App World, GetJar, Google Android Market, Nokia Ovi Store, Palm App Catalog, and

Windows Phone 7 Marketplace.

Distimo Monitor is a free, cross-platform, app monitoring tool for developers that

enables them to monitor their own and competitive applications across all app stores,

without any adjustments needed to their applications code. AppLink is a first-of-its-

kind, easy-to-use, cross-platform app distribution service within Distimo Monitor that

provides developers with detailed insight into their app distribution analytics and their

app sales funnel.

Founded in 2009, Distimo is a privately held company based in Utrecht, The Netherlands.

Follow us on Twitter, read our blog or learn more at http://www.distimo.com.

Disclaimer

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distimo publication june 2012

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