Low cost of emerging market apps offers benefits to developed world

Emerging markets are fuelling growth in the mobile phone market, but for app developers this presents big challenges. Almost 80 per cent of the 1.8bn people expected to acquire handsets in 2018, according to the International Data Corporation, live in areas where network coverage is patchy, budgets are tight and smartphones are relatively rare.

App developers need to take into account the smaller screen size and reduced capability of low-cost phones in emerging markets, says India-based Neha Dharia, a senior analyst at Ovum, a telecoms consultancy.

To be popular in these areas, mobile apps also need to overcome the cultural barriers of language, literacy and local content, Ms Dharia says. “They have to be more intuitive and easy to operate, with fewer interactions required. And they need to minimise battery usage.”

Emerging markets are not just catching up with established ones, says Serpil Timuray, chief executive, Africa, Middle East and Asia-Pacific region for Vodafone. “In some ways, they are leapfrogging them.”

Take the example of the tablet-based mobile app developed by Vodafone for tea farmers in Turkey, which digitises soil audit procedures and has led to a significant reduction in costs. The app replaces a day-long manual audit with real-time data collection, which is faster and more accurate, Ms Timuray says.

Not surprisingly, given the huge opportunity, mobile app designers are rising to the challenge. And because mobile technology does not rely on infrastructure such as fixed lines, computer hardware and good electricity supplies, it can be introduced quickly and cheaply.

In advanced economies, mobile payment for goods and services is in its infancy, says Ms Timuray, but in east Africa, millions of people use the M-Pesa mobile payment service launched in Kenya in March 2007 by Safaricom, a Vodafone affiliate.

Meanwhile, some 14,000 small-scale cocoa farmers in Ivory Coast are using a mobile phone app to access farming advice, details of training sessions and real-time information on market prices. They can also record their usage of fertilisers, check their cash flow, and gain an accurate measurement of their farm’s size by walking the perimeter.

The service is run by Olam International, an agricultural business that supports smallholders in 14 emerging markets. The aim is to reach more than 500,000 farmers by 2017, and to expand to include growers of coffee, cashew nuts and cotton.

Chris Brett, head of corporate responsibility and sustainability at Olam, says. “We want to make [these small farmers] more stable, because the supply chain is highly fragmented and inefficient, with the risk that farmers will stop growing staple crops.”

The app is free, easy to use, in the local language and has symbols rather than words where possible.

“Restricting the options helps makes it accessible, and reduces the opportunity for error,” Mr Brett says. “It’s much easier to teach someone to use a mobile phone app than to cope with the complexities of a PC.”

Coping with the developing world’s constraints has led to a branch of engineering known as “frugal innovation”, says Abhijit Kabra, global lead in mobile applications at Accenture Mobility.

He adds: “Emerging markets are breaking new ground in creating apps that can capture video content when network traffic is at its lightest and store it to play back late.”

This avoids buffering and losing connectivity and can also be used in developed markets to improve customer satisfaction and make use of networks at quieter times.

Another problem with the large scale of app rollouts in developing countries, and the diversity and fragmentation of handsets, is that it is hard to develop secure apps that remain up to date, says Mr Kabra.

In response, app developers are using crowdsourcing — inviting computer enthusiasts to help test and enhance computer systems. These techniques will lead to the creation of more robust applications in the developed world too, Mr Kabra says.

Emerging markets are also using apps from developed markets. “WeChat, the successful China-based competitor to WhatsApp [a messaging service that does not use up data time on phone contracts], is becoming more than a platform for chatting,” says Mr Kabra.

He adds: “It has moved into gaming, shopping and banking, allowing its 500m users to send digital cash and make purchases.”

However, one of the toughest challenges facing mobile app developers, particularly in emerging markets, is making money. “Emerging markets are very price-sensitive,” says Stephen Kennedy, chief executive of Magpie, which identifies apps suitable for use in China, Mexico and India.

To take off, services need to cost less than $10 a year, Mr Kennedy says. But at such low prices — which will spread to the developed world — it will be hard for app providers to reap big profits.