Why app developers are thriving in the UAE

Published July 31st, 2014 - 07:22 GMT
The proliferation of smartphones and tablets has had a huge impact on app consumption in the UAE.
The proliferation of smartphones and tablets has had a huge impact on app consumption in the UAE.

App stores run by Apple and Google now offer more than 1.2 million apps each. With so many apps to choose from, not every app ends up being a success globally.

The proliferation of smartphones and tablets has had a huge impact on app consumption in the UAE.

“UAE is the most sophisticated market in the region. Companies that drive the content are based in Dubai but Saudi Arabia, Egypt and Jordan are leading the consumption due to high population,” said Mohammad Johami, founder and CEO of Mobibus, creator of the first bilingual (Arabic and English) do-it-yourself cloud-based mobile app — Mobibus.

So far, the start-up has developed apps for Majid Al Futtaim, Aldar Properties and Dubai Word Trade Centre, and designed the Ministry of Interior app.

There are three types of applications – content, social and cloud.

In the UAE, the trend is more towards social rather than content. The social segment is controlled by giants like Facebook, Tweeter and Instagram.

In the region, most of the apps are in the content arena by companies and enterprises. They are pushing the apps to the people. The Dubai Government has more than 80 mobile apps.

Even though UAE controls 60 per cent of mobile phone applications development in the Middle East but consumption wise, Jordan and Saudi Arabia top the list.

The UAE, however, seems to be very strong when it comes to the push for corporate and government apps.

“There is great potential for mobile apps in the region, particularly those targeted to smartphones. The UAE has one of the highest smartphone penetration rates in the world, but there are few apps created in the region and for the region,” said Morrad Irsane CEO of Melltoo, developer of Melltoo Marketplace, a social network for buying and selling with a built-in chat platform.

Smartphone users in the UAE don’t have many local apps to choose from and mostly just use international apps. However, Irsane said that there are a growing number of start-ups in Dubai who have recognised this gap and have created innovative apps to fill it.

“Less than one per cent of apps are financially successful, but if I were running a company, which actually I am, I would not be worried about that number, because when you create a quality product that solves an issue, educates or entertains people - it will definitely get its audience,” Alibek Issaev, Chairman of Multillect, developer of Harakat, an app that automatically places diacritics in Arabic text according to the rules of grammar, syntax, morphology.

Harakat was ranked number one on the AppStore in Education section in several countries and got over 100,000 downloads so far.

“There a few good developers in the UAE, but unfortunately they prefer to go to the US or Korea to earn more,” Johami said.

While the UAE may seem a relatively small market there is still a lot of opportunity for app developers, said Alexander Rauser, CEO of Prototype, who has developed over 40 apps including apps for The Entertainer, Tecom Suggest and Tecom Direct, Shahid.net, Emirates 24/7, Aramex, etc.

He said there are apps that either caters to the UAE or the region. In general, users spend more and more time consuming media and information on mobile screens and this can be seen by looking at data from local websites where the mobile traffic keeps constantly increasing. However, mobile optimized content in form of apps or websites is still rare.

Monetizing and making money is “subjective” because there are no social apps developed in the UAE, Johami said.

In the first 10 per cent of the mobile app development lifecycle, he said companies need more developers. When the app is developed, they need testers.

“When the testing is done and launched it on the app stores, they need less developers and more business sales and marketing staff to maintain it or to enhance it, he said.

Normally, he said that companies in the region hire many freelancers first and maybe keep one or two as in-house developers or continue outsourcing it.

He said the scene is entirely different in the West. They will have full-time developers as they have the funds available. “It is difficult to raise funds or to get investors to the mobile world in the region,” he said.

San Francisco-based car service company - Uber - raised $1.2 billion without a website. The company builds smartphone apps to connect passengers and drivers.

Johami said that it is difficult to raise funds or to get investors to the mobile world.

Issaev said, for example, when creating “Harakat”, there were iOS and Android developer teams and linguistics department involved in one project and they had to work in tight cooperation. On the other hand, it’s pretty costly to maintain your own in-house team in UAE.

“Making money from apps becomes increasingly difficult. The fact is that this is already difficult in larger markets and getting featured on app stores is very hard. This is an opportunity for local apps, as there are less apps available and thus the chances of getting featured are higher if you develop a good app. In contrast the user base is much smaller here,” said Rauser.

That’s why when developing an app the “developers should either cater to a large user base or it needs to be part or a bigger digital strategy to create brand value or ROI,” he said.

In the UAE, Apple iOS has more traction but in Oman and Saudi Arabia, Android is more popular.

The widely used apps in the Arab World are social [WhatsApp, Instagran, Facebook and Tweeter]. In the content space, there is no clear winner.

Even though mobile apps are becoming a key factor to do business in the US, Europe, Korea and China, it is not an “important factor” in the region. But within two years’ time, Johami said that it will become important and the trend is moving towards that.

“Within a year or so, people will go the app stores to check how strong they are. The new trend is the mobile commerce where customers can make commerce via mobile devices only,” Johami said.

In the UAE, e-commerce is still the trend.

Rauser said that mobile apps and mobile websites are quite essential these days. Recent research from Google Analytics has shown that users that visit a mobile optimised website are more likely to come back to the same website and online transactions are increasing.

The same applies for mobile apps which have another advantage which is the “stickiness on the users’ device” after installing an app. However, it is important for companies to understand that a mobile strategy is an ongoing investment.

Unfortunately, Rauser said that a lot of apps are produced just to tick a box and are a result of a “me too” decision. This may have a short impact or allow a company to run a marketing campaign around it, but downloads usually drop fast if apps don’t get updated or enhanced.

But Issaev said that it depends on the type of business you do, and, especially, how much of your target audience uses mobile devices. But then again, having an app for your business is always a good idea, especially if you want to work closer with your customers and engage them in social activities.

He said the so-called in-app purchases and advertising are considered to be the most common ways to monetise free apps.

 
 

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