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Consumer spending on mobile apps increases 30% in 2020

Naushad K. Cherrayil
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Consumer spending on mobile apps increases 30% in 2020
  • 2020 was a record-setting year for mobile games and non-game apps on the apps stores.
  • Spending on the App Store reaches $72.3b and $38.6b on Google Play.
  • Zoom saw the highest number of first-time installs in 2020 on the App Store, growing 1,686% year on year to 212.5m installs.
  • WhatsApp saw the most installs on Google’s platform, reaching more than 598 million installs.

Consumers spending on in-app purchases, subscriptions, and premium apps on Apple’s App Store and Google Play soared to nearly $111 billion globally, registering a 30.2 per cent year-over-year growth from 2019’s $85.2 billion.

According to Sensor Tower data, 2020 was a record-setting year for mobile games and non-game apps on the apps stores.

Faced with antitrust allegations and the wrath of (some) app makers, Apple extended an olive branch to its developer community in November by introducing the App Store Small Business Program, which reduces the company’s app store commission from 30 to 15 per cent for developers earning less than $1 million a year.

Ever since the App Store was launched in 2008, Apple has taken a 30-per cent cut on app sales, in-app purchases of digital content and subscriptions made via iOS apps (the latter dropping to 15 per cent after the first year), which has lately drawn the attention of competition watchdogs, especially in cases where Apple competes with third-party app makers (e.g. Apple Music vs. Spotify).

Globally, consumer spending on the App Store reached $72.3 billion, up 30.3 per cent year on year from $55.5 billion in 2019. As in previous years, this exceeded the amount users spent on Google Play, which grew 30 per cent year on year from $29.7 billion in 2019 to $38.6 billion.

The App Store generated 87.3 per cent more in consumer spending than the Play store, and both platforms experienced roughly the same year-on-year growth.

The spending gap between the platforms remained relatively flat compared to 2019.

Aside from games, entertainment category apps saw the most user spending on the App Store, growing 29.3 per cent year on year to $5.3 billion.

On Google Play, social was the highest-earning category, climbing 71.4 per cent year on year to $1.2 billion last year from $700 million in 2019.

The non-game app that generated the most revenue globally on the App Store in 2020 was TikTok, including Douyin on iOS in China, growing more than 600 per cent year on year to $1.2 billion on that marketplace.

On Android devices, Google One generated the most revenue last year, climbing 41.9 per cent year on year to $444 million on Google Play in 2020.

Zoom saw the highest number of first-time installs in 2020 on the App Store, growing 1,686 per cent year on year to 212.5 million installs on that platform.

On Google’s platform, WhatsApp saw the most installs last year, reaching more than 598 million installs on that marketplace.

A record of five mobile games earned more than $1 billion in 2020. The category as a whole also reached new heights, generating $79.5 billion last year across both app stores globally. This is up 26 per cent from slightly more than $63 billion in 2019 and represents 71.7 per cent of all in-app spending for the year.

Games represent majority of spending

Although mobile games generated more revenue this year, its share of overall consumer spending declined approximately two percentage points from 2019, reflecting the growth of categories such as Entertainment in the wake of the Covid-19 pandemic.

However, games still represented the majority of spending on both stores, accounting for 65.8 per cent of iOS revenue and 82.6 per cent of revenue on Google Play.

On the App Store, users spent $47.6 billion globally, up 25.3 per cent year on year from $38 billion in 2019.

Games on Google Play saw nearly $32 billion in worldwide consumer spending in 2020, up 27 per cent year on year from a little more than $25 billion in the previous year.

Games were downloaded approximately 10.1 billion times globally on the App Store in 2020, up 9.8 per cent year on year.

Egypt’s biggest healttech startup raises second $1m round

Naushad K. Cherrayil
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Egypt’s biggest healttech startup raises second $1m round
  • Startup has plans to expand out of pharmaceuticals to food, agriculture, and petrochemical industries.

The onset of Covid-19 has accelerated digital transformation in the healthcare space in the Middle East region and has seen a boost in the funding activity in a number of remote telehealth and online booking platforms, illustrating the shift from face-to-face services to the truly digital world we are now living in.

Egyptian-based healthtech startup – Nawah Scientific – has closed a second “Pre-Series A” fundraise of $1 million in a combined equity and debt capital round, thereby, raising its total funding to $2 million and maintains its position as the most funded life science venture in Middle East and North Africa.

The startup has plans to close a significant “Series A round” later this year. 

Egypt had surpassed the UAE in 2019 in the number of deals and has ranked number one by the number of deals in the first half of 2020 (25 per cent) and number by total funding (19 per cent).

The funding was funded by Egypt Ventures and joined by the Alexandria Fund, Cairo Angels, Alex Angels, HULT Alumni Angels, and several international angel investors.

Empowering scientific research

“Our work has significantly empowered the scientific society in Egypt and we are expanding next year to surrounding countries with an aggressive plan to cover MENA and Africa in the foreseeable future,” Dr. Omar Sakr, Founder of Nawah, said.

Moreover, Nawah is now an integral part of the Pharma industry in Egypt with hundreds of samples flowing for analysis, routine check or formulations requiring improvement by Nawah pharmaceutical formulation team.

Founded in 2015, Nawah has analysed over 50,000 samples from more than 3,000 clients in nine countries.

 “We have a clear mandate to support exceptional Egyptian startups bringing actual value to the Egyptian community. We have witnessed Nawah firsthand and we have seen how they deliver on their promise to empower scientific research in the entire MEA region and we are thrilled to be part of their journey as they scale their offerings,” Ahmed Gomaa, Egypt Ventures CEO, said.

Nawah has future plans of expanding out of pharmaceuticals to food, agriculture, and petrochemical industries – which are all known to depend heavily on quality control tests.

Employer behaviour and a better work-life balance force IT professionals looking for a career move

Naushad K. Cherrayil
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Employer behaviour and a better work-life balance force IT professionals looking for a career move
  • Nearly a third wants a career change and to move sectors.
  • Unemployed say being unsure what to do and the cost of training is preventing them from upskilling or reskilling.

IT professionals are looking for a career move despite fears of mass unemployment at the end of furlough due to employer behaviour and for a better work-life balance.

According to research released by recruiters REED, 36 per cent of IT professionals are currently looking for a new job compared to 27 per cent before lockdown.

Employees stated employer behaviour (38 per cent), work-life balance (38 per cent) and lockdown causing priorities to be re-evaluated as the main reasons for movement in the market.

Chris Adcock, Director of Reed Technology, said that the health and financial impact of coronavirus has been devastating to many but in the technology, the industry has been slightly better suited and in some cases ideally placed to make the most of this situation.

Professionals played a key role during Covid

High numbers of unemployed are adding to the competition, with 31 per cent already looking for three or more months and almost a quarter (23 per cent) have applied for at least 50 jobs since becoming unemployed, with mental health stresses (37 per cent), lack of jobs (36 per cent), low confidence in ability (29 per cent), and being underqualified for roles (22 per cent) the biggest hurdles to overcome when finding a job.

“Many businesses will have turned to their IT and technology professionals to help them set up and cope throughout this pandemic. For instance, without IT teams the overnight switch to working from home would have not been possible – these professionals have been vital parts of keeping the economy going,” Adcock said.

However, he said that many employees know their value or feel that they have been poorly treated at this time – perhaps in part to clocking long hours as transitional periods continue.

In the IT industry, he said that it has never been truer to say that there are some highly talented people looking to jump jobs, or who have been made redundant as a result to the current climate.

The report said that more than a third (36 per cent) of people in work has completed training in the last six months, a figure that rises to 47 per cent in those aged 18-24.

With digital skills (35 per cent), wellbeing training (31 per cent) and management training (25 per cent) among the most likely to be undertaken.

Enhancing skillsets

The unemployed are also enhancing their skillsets, Adcock said but 77 per cent have not undertaken any training since losing their job.

“This could put job seekers at a disadvantage in a competitive market with being unsure what training to do (36 per cent) and not being able to afford training (23 per cent) top reasons for not doing training despite much free training being available on many websites,” Adcock said.

In a survey of almost 500 business leaders, REED found that before lockdown businesses were most likely to look for teamwork and leadership skills (61 per cent) and communication skills (52 per cent), ahead of financial skills (40 per cent), grasp of technology (33 per cent), and ability to work alone (32 per cent).

In a locked-down world, teamwork and leadership (58 per cent) and communication (49 per cent) are still important, but businesses are significantly more likely to seek the ability to work alone (44 per cent).

Adcock said that it is important that whether in or out of work people continue to hone their skills.

For those in work, he said that progress must be continued but for many out of work at this time reskilling is something to consider moving into new sectors where there are more jobs.

Ideal time to strengthen teams

 “Whatever the sector, wellbeing will be a key part of attracting talent. If tech companies can show mental health support, appreciation of their work, or providing clear lines for career progression despite an inability to give pay rises. These measures can be very attractive to the wealth of talented professionals looking for new jobs.

 “It is a difficult period for everyone, but good businesses know that this is the ideal time to strengthen teams to aid their recovery from the recession if they can. Our research tells us that 36 per cent see growing their organisation a priority and 33 per cent see business transformation as a leading strategy in the current climate,” he said.

Currently, he said that there’s a need for businesses to recruit for success and for candidates to upskill, or reskill, to give them a fighting chance.

If both sides of the recruitment coin can achieve these things then, he said that it won’t be just companies and individuals that benefit, but the economy as well.

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Samsung to ship 30% fewer units of S21 smartphone than S10

Naushad K. Cherrayil
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Samsung to ship 30% fewer units of S21 smartphone than S10
  • Korean giant to launch three Galaxy S21 variants next week, one month earlier than expected.
  • Stellar iPhone 12 performance is taking the wind out of competitors’ sails by dominating promotions, shelf space and the online space.

Samsung’s upcoming smartphone launch – Galaxy S21 – is expected to perform slightly better than last year’s S20 but to fall significantly short of the S10 due to intensifying competition and uncertain 2021.

The world’s largest smartphone vendor will launch its S21 series smartphone on January 14, one month earlier than expected at the company’s Galaxy Unpacked 2021 press conference.

Leaks indicate three new phones will be introduced – the S21, S21 Plus and S21 Ultra and show the new devices as refreshes of the S20, with improvements including faster performance via Qualcomm’s Snapdragon 888 chip, enhanced camera set up, a sleeker design and the possibility of an S Pen.

Counterpoint Research estimates that the S21 will ship almost 30 per cent fewer units over four quarters than 2019’s Galaxy S10.

Several factors have led to this year’s more muted forecasts including extended replacement cycles, uncertainty around pricing, a more crowded competitive environment and proximity to the iPhone 12 launch.

 “Galaxy launch dates over the past two years have crept closer to the iPhone but prices have not. Last year’s delay from Apple coupled with an accelerated launch from Samsung puts the S21 within 12 weeks of the iPhone 12 launch – this is not ideal from a price comparison standpoint,” Sujeong Lim, Research Analyst at Counterpoint Research, said.

Better specifications do put the Galaxy S21 at a higher price point but Lim believes Samsung is likely feeling pressure to keep prices as low as possible.

S21 prices leaked

“The iPhone 12 is hitting a massive sweet spot with its $749 entry price. Furthermore, we are now in mid-winter, with the impact of Covid-19 only intensifying across key markets. Pricing will need to improve from S20 levels for Samsung to avoid disappointment,” she said.

Belgian carrier Voo had accidentally leaked the prices before removing it. Voo listed the base variant of the Samsung Galaxy S21 at EUR 849 ($1,040), the Galaxy S21+ at EUR 1,049 ($1,285) and the Galaxy S21 Ultra at EUR 1,399 ($1,714).

Jeff Fieldhack, Counterpoint Research’s Director of US Mobile Devices and Carrier Strategies, highlighted the potential impact of releasing too close to Apple’s launch in key markets like the US.

 “Stellar iPhone 12 performance is not only helping Apple have its best iPhone year ever, it is taking the wind out of competitors’ sails by dominating promotions, shelf space and the online space. Also, in the North America market, there is a post-holiday lull of flagship sales in January and February, making it a challenging time to make a significant product launch.”

An early Galaxy S21 launch is likely a tactic to capitalise on Huawei woes, with Samsung looking to fill the vacuum. “However, the smartphone space has become very crowded across all segments,” Lim said.

“Not only are Chinese vendors introducing many mid-to-low end devices with competitive specs, but they are also releasing more super-premium devices. The S10 was competing with around 48 ‘$800-plus’ models in 2018, but the S21 will have to contend with over 65.”

How businesses can minimise cost of a data breach?

Naushad K. Cherrayil
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How businesses can minimise cost of a data breach?
  • Timely software updates can cut business data breach costs in half. 
  • Outdated technology needs to be addressed as a cybersecurity risk.

Enterprises with outdated technology can lose 16 per cent more money in the Middle East, Africa and Turkey region when they suffer a data breach compared to those who update everything on time. 

For small and medium-sized businesses, according to Kaspersky report, the difference is even starker – up to 54 per cent.

The problem of obsolete and unpatched software is quite common and important for businesses to address, since nearly half of organisations (55 per cent) use at least some form of out-of-date technology in their infrastructure.

Sergey Martsynkyan, Head of B2B Product Marketing at Kaspersky, said that any additional costs for business are of course critical, especially now.

“The global economic situation is unstable because of the pandemic and investments in IT and IT security are predicted to decrease. Even if it is impossible to get rid of it overnight, there are still some measures to mitigate the risk. Companies can not only save money but also avoid other potential consequences – which is crucial for any business,” he said.

Outdated technology carries cybersecurity risks for businesses, as proven by several successful attacks over the last few years. The infamous WannaCry ransomware attack in 2017 impacted global enterprises such as FedEx and Telefonica, as well as UK hospitals. It led to Microsoft issuing a rare security patch for its previous outdated XP operating system to ensure organisations still running this old OS were protected.

Kaspersky’s survey shows that organisations should prioritise renewing software and be prepared to invest because doing so could save them money in the long-term.

“While vulnerabilities are inevitable in any software, regular patching and updates can minimise the risk of exploitation. That’s why users are always advised to install the latest software versions as soon as they are available, even if these updates can sometimes be difficult or a time-consuming task for organisations,” the report said.

Breach costs in 2020

If a data breach happens, enterprises with any form of outdated technology, including unpatched operating systems, old software and unsupported mobile devices, can suffer an additional $158,000 in financial damage, taking losses to a total of $1.15 million, which is 16 per cent more than the cost for companies with completely updated technologies ($994,000).

As for small and medium-sized businesses, they can lose an additional $33,000. The total cost rises to $122,000 – 36 per cent more compared to $89,000 for businesses with all required updates installed.

As of 2020, on average, a breach costs an enterprise $1.09 million and a small to medium-sized business (SMB) $101,000, compared to $1.41 million and $108,000 respectively in 2019.

The survey revealed that financial losses were 32 per cent lower in enterprises that could detect a breach almost instantly, compared to those that did so in a week or longer and, at the same time, SMBs also benefit from earlier breach detection, with losses on average being 17 per cent lower.

Identifying a breach early gives businesses a much better chance of avoiding public disclosure. 29 per cent of SMBs that take over a week to discover a breach will see it exposed in the press, compared to nearly half of that (15 per cent) if the breach is detected almost immediately.

It is a similar case for enterprises, with these figures standing at 32 per cent and 19 per cent respectively.

Right resources needed

“The pressure on speed, when it comes to data breach discovery and reaction, therefore impacts both costs and reputational damage caused by public disclosure. To reduce the chances of their losses increasing, organisations can take control of the situation and make it publicly known that a breach has happened. This enables them to construct and lead any messages related to the incident and swiftly respond to any negative information that could be in the press,” the report said.

However, making updates can be an afterthought or too costly without the right resources. It takes a large, concerted effort to change a significant amount of software and/or hardware. Organisations should prioritise updates and be prepared to invest because doing so could save them money in the long-term.

Businesses with outdated technology are much more likely to have suffered a data breach (65 per cent) than those that keep theirs updated (29 per cent). This number increases to 77 per cent in businesses that have suffered a breach and still have the C-suite using outdated technology.

Surprisingly, the main reason given for not updating technology is employee convenience.

As shown in the chart below, nearly half (48 per cent) of organisations reported to some extent that employees refuse to work with new versions.

The same number of companies simply cannot upgrade their devices or operating systems because they use legacy software.

Meanwhile, a third (34 per cent) say the company’s outdated technology is used by C-level staff and is excluded from their update plan.

Both enterprises and SMBs urged to mitigate cyberattacks and potentially reduce costs if they suffer a data breach.

Key steps to follow:

  • Ensure the organisation is using the latest version of its chosen operating systems and applications, with auto-update features enabled so that the software is always up to date. 
  • If it is not possible to update software then organizations are advised to address this attack vector through the smart separation of vulnerable nodes from the rest of the network, along with other measures. 
  • Enable the vulnerability assessment and patch management feature in an endpoint protection solution. This can automatically eliminate vulnerabilities in infrastructure software, proactively patch them and download essential software updates. 
  • It is important to boost security awareness and practical cybersecurity skills for IT managers, as they are at the frontline of IT infrastructure updates. Dedicated security for IT online training course can help. 
  • For critical IT or operational technology systems, it is important to always be protected regardless of any available software updates. This means they should only enable activity that is predetermined by the purpose of the systems. 

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Warburg pumps $100m into India’s top audio brand boAt

Naushad K. Cherrayil
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Warburg pumps $100m into India’s top audio brand boAt
  • Investment is expected to widen its R&D capabilities, ramp up its manufacturing and global supply chain.
  • boAt’s aim is to establish India as a global supplier in hearable and wearable space.

An affiliate of New York-based private equity firm Warburg Pincus has pumped $100 million into India’s number one earwear audio brand – boAt.

In December 2020, boAt has overtaken brands like Xiaomi, Realme, JBL, Apple amongst others to rise to the top, according to the research firm Counterpoint Research, and has become the fifth-biggest wearable brand in the world, according to International Data Corporation, in the third quarter this year.

“The investment is a vote of confidence for our business model and growth prospects. The investment is great news for not only the company but for the entire direct-to-consumer (D2C) sector. The investment has come at the right time as we make efforts to ramp up our manufacturing and global supply chain,” Aman Gupta, Co-Founder of boAt, said.

The investment by Warburg Pincus is expected to enable the company to further fortify its leading market position, widen its R&D capabilities and product portfolio, and build on boAt’s efforts to create and support a manufacturing ecosystem under the “Make-in-India “initiative.

Next phase of growth

As boAt enters the next phase of growth and innovation, Sameer Mehta, Co-Founder, boAt, said that they look forward to benefitting from Warburg’s pedigree, collective experience and resources in helping us scale.

“Going forward, with the Government’s support, we will focus on building capabilities in domestic R&D and undertake vertical integration across both the hearable and wearable space to establish India as a global supplier,” he said.

Avendus Capital acted as the exclusive financial advisor to boAt and its shareholders on the transaction.

Vishal Mahadevia, Managing Director and Head of Warburg Pincus India, said that they see a compelling growth story in boAt and believes the company is well-poised to build upon the strong leadership position it has carved out within the industry and stands to benefit from the secular tailwinds of e-commerce growth in India.

And Kanwaljit Singh, an early investor in boAt, Founder and Managing Partner at Fireside Ventures, expects that boAt has grown to become the market leader in the lifestyle accessories segment.

“It’s the perfect example of a consumer brand built successfully on quality, consumer insights, smart pricing, and focused marketing. Given our interest in the consumer brand category, we spotted and saw the prospects of a high-growth consumer start-up addressing the audio needs of millennial and Gen Z,” he said.

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