Developers struggling to find revenue model for local iPhone apps

The bus guide SG Buses is a very popular Singapore-specific iPhone app, with about 27,000 downloads so far since its release in September. Today, it gets about 200 downloads a day. This useful bus guide, which is free but ad supported, serves about 10,000 page views a day or 300,000 page views a month.

However, while this might sound like a lot, the ad revenue from SG Buses is very low, according to Muh Hon Cheng, the developer. He does not want to reveal figures but speaking from his experience, says: “The market here is too small to generate substantial revenue from ads (through ad networks) such as AdMob.” 

If the developer of SG Buses is pessimistic about the advertising model, this is bad news for other developers because SG Buses is probably Singapore’s most popular local iPhone app.

In theory, another possible revenue model is to get people to pay for the apps. Unfortunately, paid apps are not popular. One developer described sales of his paid Singapore-focussed app as ‘abysmal’. According to another developer, just 10 downloads a day are enough to get on the top 20 list on the Singapore app store. 

Going global instead

If developers cannot get decent returns from their efforts, the future does not bode well for apps that focus on the Singapore market. Without sufficient revenue, developers will not bother to develop innovative apps tailored for iPhone users here.

This is already happening. Currently, Hon Cheng’s focus is on developing apps for the global market. “I’m only doing local apps if I know I can finish it in a day or two. SG Trains and SG ERP both only took one or two days to complete.”

The potential returns from targetting a global market can be seen in the experience of iPhone developer Joseph Wee. Joseph has released two Singapore-focussed free apps on the App Store  — Locacity, a location-based service and Trafficam SG, which shows feeds from local traffic cameras. On December 9, he released Freesaurus, a free thesaurus. According to Joseph, the two local apps are tapering off at about 16,000 downloads while Freesaurus, which was released later, is catching up with the first two, and shows no signs of slowing down. The ad revenue from Freesaurus are also more consistent, says Joseph.

Whither local apps?

Fortunately, even though the Singapore market is small, it does not mean that Singapore-focussed apps will dry up. There will be developers who create simple apps just so that they can learn about developing for the iPhone, the way Joseph Wee did for Locacity and Trafficam SG. 

And some developers are making apps almost as a hobby rather than as a business proposition. These developers will continue to create apps for the local market, even though the returns are not there. Ong Jun Da, who developed the gambling-related trio of SG Pools, SG 4D and SG Toto, complains about the poor returns from the AdMob network (his most popular app is SG 4D with more than 12,000 downloads so far), but plans to continue to develop Singapore-focussed apps anyway. 

Singapore users will also see iPhone apps that help local companies to extend their reach. OCBC Bank, the Today newspaper, Golden Village cinemas and callback operator Teliwave lead the way with OCBC Bank, iTODAY,  iGV and Hoiio respectively.

And finally, some apps will be created by developers who see Singapore as a testbed, a way to try out new businesses and new revenue models that can later be rolled out to other markets. The local restaurant guide buUuk, for instance, is doing just that. 

However, since advertising is the most popular revenue model for iPhone developers, there will, undoubtedly, be apps that never see light of day simply because the Singapore market is too small. And that's a shame.