With over €1bn paid out in the last decade, the mobile app economy has become one of Ireland’s biggest digital industries. Adrian Weckler talks to some of the country’s most successful developers
One billion dollars – or €850m in our terms. It’s a lot of money. But this is how much Ireland’s app developers have earned from Apple’s App Store over the last decade, according to recent figures.
That’s more than almost any other single component of the digital economy here. And that’s not even counting revenue from other app stores, such as those for Android, Windows or for the Mac. So is it time we attributed more weight to the app industry?
Ask a passer-by and they might think of an app developer as a side-job or something casual. Yet with some 17,000 jobs attached to the activity, Ireland is the 12th-largest ‘app economy’ country in Europe in terms of app jobs as percentage of all jobs, recent figures from Apple showed.
And while it’s true that Ireland doesn’t yet have a Rovio (Angry Birds), Epic Games (Fortnite) or King (Candy Crush), it does have some homegrown world-leading app companies.
Dublin-based 3D4Medical has risen to become one of the top medical app developers in the world.
Its anatomy apps, including the flagship ‘Complete Anatomy’ app, are used by over 200 universities in the world as official teaching aids.
They are now the top-grossing, top free medical apps in the world.
Every major college from Harvard, Yale and Stanford to Cambridge, Edinburgh and a host of other European campuses now refers to the Irish company’s painstakingly intricate medical apps.
“We still think we’ve only barely scratched the surface,” says John Moore, co-founder of the company, which employs 80 people.
“There are some 45,000 universities worldwide. In the US alone, there are two million students who need medical texts. It’s a $1.4bn market in the US.”
Moore’s company is growing at breakneck speed, doubling its revenue from €5m in 2015 to over €10m last year.
It has been helped somewhat by recognition from Apple, which has repeatedly showcased 3D4Medical as an example of what can be achieved with apps.
In 2015, the firm’s head designer, Irene Walsh, was one of the keynote presenters at Apple’s prestigious Worldwide Developer Conference (WWDC).
And 3D4Medical’s apps have appeared in five separate Apple ads.
“Obviously we wouldn’t be here if it wasn’t for Apple,” Moore says. “That’s really where it started for us. This ability to connect with millions of people through the App Store. It’s been amazing.”
3D4Medical, which has recently added full courses and subscription services to its offering, also sells through Google’s Play Store and on Windows and Apple Macintosh.
But it is Apple’s App Store that still accounts for the vast bulk of its downloads, Moore says. And the vast majority of its revenue is earned outside Ireland.
But it’s not just colleges that use the technology. Down the road at Dublin’s Beacon Hospital, Dr Maurice Neligan has taken to using some of 3D4Medical’s apps to help explain and consult with patients on treatments.
“It’s far easier to show them an animation of what we’re going to do or how the procedure might work than the old ways,” he says.
“I also find that it helps patients communicate to me what they think the problem might be. This is making things much better. I’m a huge advocate.”
The success of 3D4Medical’s across the world may be a sign that app development has become a mature, permanent part of ecommerce.
In total, European app developers have garnered around €20bn from App Store apps, according to recent Apple figures.
Some 1.5million jobs are attributable to apps and app development, the tech giant estimates.
“The industry is massive,” says Dermot Daly, co-founder and chief executive of Tapadoo, a Dublin-based app development company. “You only have to look at the figures that Apple state they have paid out to iOS developers alone. At the beginning of this year’s World Wide Developer Conference, Tim Cook stated that Apple has paid out over $100bn to developers since the App Store began.
“In any language that is a large industry. Bear in mind that this doesn’t take into account the Android App Store market, and it is in industry that didn’t exist prior to 2008.”
Daly is one of the longest-serving app developers in the Irish market, having adopted the platform as soon as Apple came out with it.
“The concept of the App Store economy, to some extent, ignores the many businesses that simply wouldn’t have existed without it,” he says.
“There are plenty of businesses that are not charging for their apps, but are operating on an ‘app first’ or ‘mobile first’ basis. I’d argue that these are also part of the App Store Economy. Today we pay for our parking using Parking Tag, or we bank on our mobile only and we pay for goods using Apple Pay or Google wallet. All of this is made possible by apps.”
Daly also argues that the ‘gig economy’ wouldn’t be possible without apps. “While many people question the gig economy, services such as Deliveroo, and Lyft wouldn’t exist without apps,” he says.
Can the app economy continue to grow?
“Yes and no,” says Vinny Coyne, another of Ireland’s first batch of app developers. Coyne’s popular Eirtext app was one of the original hits of the Irish App Store.
“The app economy has grown in a much different direction than had been originally envisioned,” he says.”
“In the early days of the App Store, the economy was mainly focused on selling software directly to consumers but that has changed drastically over the years.
“In that regard, growth has slowed and it has become much harder for independent developers to survive in the market. That said, services like Netflix and Spotify, that sell access to high-quality content, are thriving, so there’s still considerable growth to be found, just not from selling the software itself.”
Coyne says that for independent app developers, paid apps have made way for ‘freemium’ apps. Subscription-based apps, he says are regarded as the holy grail for some developers.
“The main lesson to learn is that different apps require different monetisation models and a lot of experimentation is required to find out what works best,” says Coyne.
“In the early days of the App Store, you could sell an app for €9.99 and make a living. Freemium became really popular once developers were given access to in-app purchase APIs and it has proven very successful in mobile games in particular.
“A lot of developers have been experimenting with subscription pricing lately and it has worked quite well for businesses that provide access to hosted content or services. It’s still a hard-sell for utility-type apps, however. Developers either have to try sell up-front, or go the route of giving away the app for free and making up the revenue via in-app advertising or up-selling features via in-app purchases.”
Tapadoo’s Daly sees consistent, predictable growth in the app economy to come.
“I believe there is a maturing of the market which is natural and expected,” he says. “Many people often try to suggest that this is a stagnation but this simply isn’t true. The maturing of the market is leading to less of a gold rush feel to it, and more considered approaches to how apps can benefit businesses. There’s still plenty of room for growth.
“Big business tends to be cautious and slower to adopt new technology and our view is that most large companies are still behind the curve. We’re seeing new and innovative ideas coming from mature industries who are finally looking to how they can utilise apps.”
Making it big is no easier than in any other economic pursuit, Daly says.
“Building an app tends to cost more than people expect,” he says. “There isn’t a case of ‘if you build it, they will come’. There often needs to be a big marketing campaign put behind an app to build awareness of its existence, let alone persuading people to download or pay for the app.
“It still surprises me that we get approaches by people who believe they are about to disrupt an entire global industry, and they think they’ll do that for the cost of a second-hand car. That’s simply never the case.”
As for 3D4Medical, it is now continuing to expand its focus to nurses, chiropractors and other disciplines it believes are underserved by innovative digital texts and aids.
“We’re only getting going,” says founder John Moore. “We’ve got some big things lined up in the coming months.”