Where The Big Money Will Be Made In Mobile (And How You Can Get Your Share)

Shortly after Nokia announced its intention to build smartphones running Windows Phone, Microsoft invited me and a few of my colleagues to a private meeting with three Windows Phone developers who were among the first to build apps for the platform. We could ask them anything; no topics would be off-limits.

What stood out to me about that meeting was how wrong I was about an assumption I had been carrying around: that developers built apps with the ambition of one day striking it rich.

One of them dashed that notion when he expressed something which I think is much closer to the truth for most developers. He explained “I just want to be able to quit my day job.” This guy loved to design and build games in his free time, but I recall that he worked for a bank’s IT department to pay the bills.

To all the developers reading this: why do you do what you do? What gets you excited about this business? Are you doing the things that you imagined you’d be doing when you made the decision to pursue your career? Are you investing in the markets that are generating revenue?

It’s worth thinking about what mobile business models are likely to make the most money over the next several years. In 2014, Digi-Capital published a research report that estimates by 2017, the mobile economy will reach $700 billion.

Mobile commerce will make up the biggest portion of this pie by far, driving over $500 billion. According to a research analyst I contacted recently, many of the highest-growth e-commerce platforms were built on old technology. Their owners are retro-fitting mobile web themes and occasionally adding wrapper apps for web stores, but there isn’t much happening to create real mobile native solutions that are designed for mobile devices from the ground up. That sounds like an opportunity for the right developers.

In the grand scheme of things, mobile commerce remains small. The US Chamber of Commerce reports that the total US retail industry rang up over $4.8 trillion in sales in 2012. Since 1993, the total US retail industry has averaged 5 percent growth per year. If that rate of growth continues, by 2017 it will total just over $6 trillion. That means mobile will tally just over 2 percent of total US retail revenue. E-commerce margins are also relatively small because of the ultra-competitive marketplaces in which many businesses operate.

Still, mobile developers can use reports like the Chamber of Commerce’s and Digi-Capital’s to plot which markets they want to tackle. For example, the auto industry represents the largest retail segment in the US. I doubt that many customers will buy cars directly on their smartphones, but they’ll certainly expect to be able to browse inventory, check prices, fuel economy and reviews, and maybe schedule a test drive when their preferred make and model is available. If the automotive market speaks to you and if you’ve got relevant experience, the data suggests that a lot of money will flow into this segment. Maybe some of it can flow your way.

Cars, of course, make up just one portion of the retail industry. Each has its own brew of consumer demographics, pathways to purchase, and appetite for innovation. The point is this: more money will be made in mobile commerce than any other monetization option, so mapping your company’s talents and interests to the retail segments that power commerce likely is a productive way to grab your piece of mobile’s rapidly growing economy.

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