The app and device battlegrounds are rife with established players and newbies fighting it out to provide the emerging markets with new handsets, alternative app stores and fresh mobile content. New moves include Nokia’s alliance with Android with new releases including the Nokia X, Apple covertly re-releasing the iPhone 4 in India and Samsung set to launch the Galaxy S5 in the UAE.
However, none of the major mobile players have quite cracked the code to success in emerging markets. Competing factors include price point, brand popularity, localised content and viable payment options, but no one has yet found the winning combination.
This is largely because mobile players, particularly in the West, don’t understand consumer preferences throughout these different regions. Our recent research highlighted which factors were key to making a purchase decision in Brazil, China, India, Vietnam and Nigeria as well as showing that the brands these consumers desire are not that dissimilar to those coveted in the West. Out in front is Apple (32%), followed closely by Samsung (29%) and Nokia comes in third (13%). Interestingly though, it is functionality which persuades consumers to buy particular handsets (Brazil: 44%, Nigeria: 47%, Vietnam: 48%, China: 46% and India: 48%). For Brazilian consumers trust in the brand comes next (22%), but brand aspiration is the factor that cements the deal for Nigerian (23%), Indian (26%), Chinese (21%) and Vietnamese (29%) consumers.
It is the Android operating system that continues to dominate, currently providing consumers across the world with the best value for money, which explains why 40% of consumers use Google Play. Looking at how other popular app stores fare, Apple comes a distant second with 28% using the App store and faces competition not only from Google Play but also from unlikely players in the app wars, mobile operators, whose own app stores are used by 26% of emerging market consumers.
The reason mobile operators’ own offerings are so popular is not only because of the relationship they have with their customers but also the local and culturally relevant content they provide. Although entertainment and music apps top the app charts for emerging market consumers like they do in the West, apps on education, health and travel information come a very close second. With the major app stores not creating these different niches of content, a large opportunity is presented for those that can get there first.
Amazon’s Kindle has proven that users will choose a device that offers specialist content, in this case books, as long as they can also access apps like Facebook and Snapchat. Nokia’s decision to build its own app store using Android technology could therefore turn out to be a wise move as it can create content in response to consumer demand rather than being tied to Google Play, yet it is has the Android functionality that consumers prefer.
For now, it is the mobile operators that stand to win the race because they have leapt more hurdles than most – the first being payment options. Many smartphone users don’t have banking facilities, so being able to pay via their pay as you go plan is the only way that they can pay for content.
This is a major stumbling block for companies like Apple since the App Store currently shuts out those consumers that don’t have credit or debit card details. Coupled with providing feasible payment options, operators have loyal relationships with both their customers and the top brands, so can provide access to the latest handsets and develop their own mobile content which meets the needs and wants of their own customers.
We do tend to link app stores with the operating systems of our smartphones but this is one structure that may be overturned as mobile operators usurp handset manufacturers. The emerging markets continue to push mobile companies to adapt and evolve as smartphone and feature phone penetration increases. For now the app wars wage on, so keep your eyes on this space.
Vasileios Tziokas is marketing manager of Upstream