Squeezing Cash from China's Billion Phone App Market
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Squeezing Cash from China's Billion Phone App Market

At some point in the past few months, China’s billionth mobile phone customer switched on his or her handset for the first time.

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Chinese app developers are thinking of ways to cash in from the growing smartphone market. (Photo credit: ShutterStock)

The mobile network growth here has been remarkable, with some 80 million new subscribers coming online every year for the past decade.

But in some ways the real communications revolution has only just begun.

This year, China will overtake America as the world’s biggest smartphone market.

And for many Chinese, the smartphone offers them their first personal route to access the internet – by some estimates 40% of those connecting to the web in China now do so solely via a mobile phone.

That offers IT developers, and mobile phone app makers in particular, an extraordinary opportunity.

‘No better place’

In a small Shanghai office, with a few dozen employees beavering away at their computer screens, Guanxi.me is one startup company joining the gold rush.

“There’s no better place to be than China,” chief executive Alvin Wang tells me.

“There’ll be an extra 200 million new smartphone users in the next 12 months. We want to be on those phones.”

The app Alvin is developing allows users to build social networks and then, using geo-location data, track and meet those contacts in the real world.

“People are social animals but today’s technology is more geared to replacing face-to-face contact. We want to enhance and increase face-to-face contact,” Alvin says.

Guanxi.me is free to download, and that’s important in China.

Here, smartphone users are much less likely to pay to download an app than their Western counterparts.

Cheryl Wu is typical of many young smartphone users in China.

She has a job in real estate and spends her evenings meeting and socialising with friends; posting, tweeting and messaging her way through her nights out using a series of apps on her smartphone.

All of those apps, though, have been downloaded free of charge.

She particularly likes the Weishin voicemail app she tells me, because it’s fun, convenient and free.

‘In-app’ sales

So how, then, do you make money as an app developer in China?

One way is to try to target “in-app” sales; give away the app for free, get users hooked, and then sell them the chance to enhance their experience for a small fee.

It’s a model used most successfully by the bigger developers of mobile games technology and the idea is simple.

Although users in China may be willing only to pay a few cents for the enhanced service, when you’re talking millions of users, that can soon add up to a lot of money.

Article by John Sudworth. Continue reading at BBC News.