Why Europe is losing its luster as mobile powerhouse (TechRepublic)

By Matt Asay                August 8, 2014
Europe's influence on the mobile economy has been fading, which means European developers need to focus where the money is: Asia-Pacific. 

Europe, once the center of the mobile universe, is in serious decline. While European Union countries accounted for 25% of the app economy in 2012, that number plummeted to 19% in 2014, according to a new report from VisionMobile. As China and India increasingly drive smartphone growth, it looks unlikely that Europe will ever recover its mobile joie de vivre.

Europe takes a backseat

To be clear: Europe's app economy (defined as revenues from smartphones, apps, and mobile services) continues to grow. It's just that its growth lags everywhere else.

As VisionMobile finds, app production in the European Union will reach $16.5 billion in 2014, compared to $13 billion in 2012, equivalent to a 12% annual growth rate. This compares with a global app economy growth rate of 27%, more than double that of the EU.

And while Europe accounted for nearly a quarter of the global app economy in 2012, that number has declined to 19% in 2014.

Why is Europe so slow?

At least some of the reason for this slide is bandwidth. Europe, once the leader in high(er)-speed mobile broadband, has become a backwater, as Analysys Mason research on LTE penetration uncovers. Modern mobile applications assume hefty broadband access, something that Europe doesn't deliver.

But part of the problem isn't so much that Europe is slow: it's that Asia-Pacific is so fast.

Global smartphone growth has shifted into overdrive in Asia-Pacific, with India and China alone expected to add over 400 million new smartphone users in 2014, as VisionMobile reports.

In 2013, Asia accounted for approximately 3x the smartphone sales volume of Europe, with a large share of sales to new users. Importantly, Asia-Pacific isn't turning to North America or Western Europe for its apps: demand is partly -- and significantly -- fulfilled through local supply of apps and app development services.

At least part of the reason for this is supply: Evans Data finds that Asia-Pacific has 46% more mobile developers than Europe. While some of this is a natural result of having a much bigger market for which to develop apps, some is simply a failing on European developers' part to follow the money.

Go East, young developer!

Which brings us to a conundrum for European developers and, indeed, developers everywhere: given that Asia-Pacific is the world's hottest mobile market, how can North American and European developers get in on the gold rush?

VisionMobile estimates that there are 406,000 mobile developers working in the European app economy. (Evans Data, by contrast,goes even bigger, saying there are 8.7 million mobile developers globally.)

That VisionMobile number climbs even higher (adding 255,000 developers) if hobbyist-type developers are considered (and they should be, given that it was hobbyist Nguyễn Hà Đông that created Flappy Bird).

Those developers -- whether professional or hobbyist -- need to look beyond Europe to Asia-Pacific. That's where the new money is. Given that 31% of European mobile developers already make their living selling contract services, it's time to for Europe to both grow its developer population and to shift their focus to Asia-Pacific.

Matt Asay is a veteran technology columnist who has written for CNET, ReadWrite, and other tech media. In his day job, he is the vice president of business development and marketing at MongoDB. He was previously chief operating officer at Canonical,