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Where’s the Money in Mobile Apps? Not in China. Expert Advice Says Focus Internationally.

Want to make money in apps? Focus on the international market, says App Annie CEO Bertrand Schmitt. That was the takeaway message from Schmitt’s talk at today’s Mobile Game Summit Beijing 2012, hosted by CHAIN (China America Innovation Network) and Happy Elements. The conference, held at the Beijing International Conference Center, focused on bringing developers, service providers, and business professionals together from across Asia and around the world.

App Annie offers app store analytics for iOS, Mac, and Google Play Android App stores.

So, where did Schmitt say the money was? Games. And iPads.

Despite having the largest Internet population in the world, China (and Asia in general) does not bring in the most revenue for mobile applications. Schmitt highlighted data in the difference between downloads and revenue. Chinese users are more likely to use a free mobile app, whereas western audiences are more likely to plunk down money for an app, or during their gaming experience.

The Asian-Pacific region (APAC) accounted for 36% of app downloads worldwide, while only contributing 26% to revenue overall. The US ranks first worldwide in both revenue and downloads, and while China ranks second for downloads, it only ranks eighth for revenue.

So, what’s a developer to do? How do you penetrate China’s mobile space?

Wide app distribution and usage.

According to Schmitt, the current iOS China strategy for most major players is to get users from iOS in China, focusing on widening distribution and a user base, but not to monetize directly from iOS in China. Best bets on actually monetizing in China are done outside the app store with other products and promotions.

Google Play is not very successful in China, because it’s not offered as a default on devices. Also, Google does not offer direct monetization through Google Play in China.

And what about the iPad?

“There’s a high opportunity to monetize, if focused on the iPad,” Schmitt said.

And user experience is the key. While there are fewer overall application downloads with the iPad, the user base is loyal, willing to spend a little extra on quality apps, and generally spends extra time on the device.

Michael Lee of Kabam Games added in a later session that iPad gamers have longer sessions, “The iPad is very big for us; it’s a smaller percentage of users, but they provide a higher percentage of revenue.”

It seems the bigger the screen, the longer the session time, and the greater the gaming experience.

Schmitt also added in a later discussion that interest and use of the Kindle Fire in the US is growing.

Gaming still provides the highest revenue opportunities. The top two categories for revenue on iOS in China were strategy games, followed by role-playing games. In the US, simulation games, followed by role-playing ranked first and second.

However, despite gaining a successful Chinese following, publishers still need to search elsewhere for revenue. Out of the Top 10 Worldwide publishers in China, 90% of their revenue comes from outside China.

It seems, despite having a large user base, in order to keep the money and games coming on mobile, developers need a diverse, international user base. And may find success expanding into the tablet experience.

Ginny Tonkin is a blogger and digital communications professional, most previously as a digital content producer for GoErie.com. She is passionate about exploring Asia and social media, and anytime those two intersect.

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