China Set to Overtake America’s App Market

What’s the Latest Development?

China’s economy is much more than state-built housing and widgets made with cheap labor, or at least it could be. Mobile technology has been booming in China–analysts say the one billionth Chinese mobile customer recently switched on his or her new cellphone–and the trend is set to continue. In the next 12 months, over 200 million new smartphone users will enter the mobile market and app developers want to be on those phones. As Chinese customers are less willing to pay for apps, developers use ‘in-app’ marketing, giving the app away but charging customers for enhancements, such as new levels for games. 

What’s the Big Idea?

While the ‘in-app’ strategy will net just a couple cents per sale, multiplying that by millions of potential users quickly adds up. July Cheng, for example, developed a flashcard app to teach her young children new vocabulary. The app, which is free, has been downloaded more than 10,000 times and Cheng now collects about $1,000 a month from pop-up adds connected to the education tool. Given China’s notoriously loose protection of intellectual property, however, all is not rosy in the eyes of professional app developers. They say the only way to survive in the Chinese market is to partner with a big firm before releasing an app, lest it be quickly copied. Businesses are currently pressing the government for stronger copyright protections. 

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