(MENAFN- Gulf Times) Apple Inc has persuaded developers in China to write apps for the iPhone, helping make that country the largest market for downloads last quarter. The challenge now is getting Chinese users to pay for software.
While downloads of mobile applications in China outpaced those in the US in the recent period, the US still led in revenue, according to App Annie, a website that tracks mobile software. China € now the No. 1 market for iPhones € ranked No 3 by revenue after Japan.
Chief executive officer Tim Cook will have the chance to encourage Chinese programmers and other software builders from around the world as more than 5,000 people gather next week at the company's annual developer conference in San FrancisCo. Getting users to pay for apps generates revenue both for Apple and the developers, who are in turn more likely to build programmes for regions where sales are robust.
"You can't just turn on the faucet and expect 1,000 flowers to bloom € you've got to get them hooked into the idea of what an app is, what it does and why it has value and meaning to you," Ramon Llamas, an analyst at IDC, said. "Once you set off on that course, that's when you can switch gears and say, 'OK, how do we bring in more revenue from this?'" The rise of China's interest in developing software for Apple's platform underscores the changing economics of the company's ecosystem. 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.
"It's going to be tricky just because the buying of apps is not as big there," said Ben Bajarin, an analyst at Creative Strategies. "It's hard to say that overnight all of a sudden people are going to start spending on apps." Sales of the new larger-screened iPhones helped boost revenue in China by more than 70% last quarter and unit sales of the phone outpaced the US for the first time.
"The Chinese developers are coming on in significant numbers," Cook said in April. "You can see this enormous momentum building in the developer community there as well." Apple app developers were paid $10bn last year and $25bn since the App Store was introduced, the company said in January. Chinese app developers, which have created 221,000 apps worldwide, have been paid $3.4bn, with more than half of that occurring in the past 12 months, Apple said this week.
Apple estimates that 1.5mn jobs have been created in China because of iOS apps.
"Apple's strategy has primarily focused on how to boost demand for iOS apps," said Neil Cybart, an independent analyst and founder of the website Above Avalon, which covers Apple's business. "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." For Xiamen Meitu Technology Co, whose MakeupPlus app ranked as the top photo app in China in April and reached No 1 for all apps in the country last month, the high-quality camera of the iPhone has been a boon for business in the country.
Apple's suite of development tools has also made it easier for Meitu to offer more advanced functions and integrate them into the operating system, said Chen Jie, vice president of Meitu, which is sending at least two people to Apple's Worldwide Developer Conference for the first time.
"Apple phone users are an important of the China market," Chen wrote in an e-mail. "Apple's camera phone is better than average, and since domestic users are quite savvy, this is an important feature for imaging apps like ours." Meitu's suite of about 10 apps has helped it become China's sixth-largest iOS developer by downloads, according to App Annie data.
Apple, based in Cupertino, California, has beefed up its developer-relations team in China since 2011 to help apps get approval there, and the company has worked to smooth the app-buying process. In November, for example, the company announced a deal with China's UnionPay, the country's most popular payment card, so users could buy apps in the App Store similar to the way it's done in the US. "By supporting a payment method, by making it frictionless for them to have an account to use the App Store, these are all critical elements that they put in place in order to have the software ecosystem blossom," Creative Strategies' Bajarin said.
Still, for some app developers, such as China's Cheetah Mobile, Apple's tight control and longer approval time compared with Google's Play store makes iOS a less compelling option.
Cheetah's Clean Master app has reached the top spot in the Google Play store for 11 countries. Its visit to the Apple developer conference would be as much about assessing how many resources to expend on future iOS development as it is about learning Apple's new tools and technologies, said Jill Shih, senior director of user experience at the Beijing-based company.
About 90% of Cheetah's development team works on Google's Android platform, she said.
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