Going east: China iOS app dev companies and potential market

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(Update 05-10-2014) I saw the IPO of China based Cheetah Mobile in the news, not too impressed or confident of their apps though, although I know they make money. Cheetah was a subsidiary of Kingsoft (and King still has a big stake after IPO). I also noticed the WSJ article about China app market. I know a lot has changed since I last wrote about this, which is 3 years ago. From my personal observations, smartphone especially iPhone is saturated.

(Original 05-29-2011) I prepared the following summary for 360 iDev conference this fall at Denver. The talk did not make into the agenda, but I think it may be interesting to some western iOS (mobile) developers. After all, the market has great potentials.

Some background
iPhone officially came to China late 2009, but iPhone 1G came to China shortly after the US launch in Summer 2007. The first Apple store opened in Beijing July 2008. According to Steve Jobs Sept 2010 music event and Apple Q4 2010 earning report, greater China is the fastest growing market. Chinese costumers are snapping up iPod, iPhone, iPad and Macs quickly. How about apps? In this talk, we will discuss the China iOS app development companies (some have their apps featured by Apple), the current status of China iOS apps and the potential of iOS app markets (both consumer and enterprises).

Xujiahui

Some notable China based iOS development companies
139.me (Its Colorful Aquarium app was featured by Apple).
Rye Studio (featured article on San Jose Mercury News here).

Those two are based in Beijing. Btw, Beijing is probably the Silicon Valley of China in terms of Mobile App.

There are other players such as NotionInMotion which is based in Wuxi (north of Shanghai).

Like western counter parts, Chinese companies derive revenue from developing their own apps (own IP), and doing contract work for clients (understandably some are western clients).

The app market

The market it self is insignificant, I saw one number says iTunes China App store sales would go from $1 m in 2009 to $6 m 2010. The piracy is a concern (crack apps are very common), but the growth itself is also quite amazing. From Hardware side, we already saw the craziness around iPhone 4 and iPad 2 launch in China. Keep in mind iTunes only supports credit card payment, which is not the most popular online payment method in China. From developers’ point of view, dingsding wrote a nice article in Chinese. Basically his main points is be patient.

Personally, I think it’s more likely Chinese youngsters will get used to pay for the little apps, because some of them are growing up playing online games (and used to pay for playing or for virtual items). This is very different from the general unwillingness to pay for Microsoft products (much more expensive and used to be “free”).

Software piracy
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Traditionally Chinese consumers are not used to pay for software. Per Steve Ballmer (during China President US visit early this year), 1 out of 10 copies of Windows is paid. Keep in mind an authentic copy of Windows cost more than $200 in China (1/5 of an experienced software engineer’s monthly salary). He re-iterated his view on WSJ lately.
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