By Tamara Pupic
Is the regional mobile app market a tough nut to crack? Locally-based mobile apps creators open up on their motivation, ideas, funding challenges, and more.
Although hardly 40 years old, Ayham Gorani, founder of Alpha Apps, an Abu Dhabi-based mobile apps developer, is already somewhat a veteran of the UAE’s mobile app industry.
“Before in the app market it was more about the content. If you had great content, you could win,” he says. “Now it is getting harder. There are a few developers who get lucky and make a lot of money. But for all other successful apps, they [developers] need more than luck. They now need good content, good marketing and a budget behind it to get in the App Store.”
The booming mobile app sector, with global revenue of $8.3 billion in 2015, has become one of the toughest markets to break into, unless a developer can bring something new and unique to the fore.
A Syrian, born and raised in Germany, Gorani brought the wealth of his experience in managing scalable app projects to the region when he set up AlphaApps in Abu Dhabi in 2011. The goal, he says, has been to bring forward the Arabic apps industry to an internationally competitive level by developing high quality smart device apps - locally.
It is a mission, however, shared by many young Arabs and/or Muslims around the world, who have lately been developing a great number of innovative businesses - from Arabic edutainment apps to Ramadan apps or various lifestyle apps that cater to Muslims’ daily needs.
Many of these innovations are, of course, sparked by frustration with the status quo. “I know for a fact that teaching our or any other, different language and culture in the West is much harder than doing it here in the Middle East. There is a lack of resources,” Gorani says describing the dissatisfaction of his many peers, who are not willing to give up on their own culture and Muslim values, with what Western apps have to offer.
Last Ramadan, Gorani launched The Sira App, the first mobile application that introduces children to the life and teachings of Prophet Muhammad (PBUH). “When we started working on The Sira App we said that our main target audience would be Arabs or people interested in this culture abroad more than people here,” Gorani adds. “Another reason is that everything related to Arabic language and culture here is of modest quality. You cannot compare it with the apps developed in the West or for Western culture and its languages.
“We wanted to develop something that is very high quality and that comes from this region.”
Similarly, Rashed Al Harmoodi, the creator and executive producer of Mansour, conceptualised this Emirati cartoon in 2011 with the support of Mubadala, an Abu Dhabi-based investment and development company, as an effective means of communication to educate Emiratis aged 6 to 12 years about healthy lifestyles, careers in knowledge-based industries, and Emirati culture.
“All cartoons are imported from abroad. We understand the language, but that doesn’t mean that we have the same culture,” Al Harmoodi says. “We wanted to create local content, relevant to our culture, and export it to the world rather than just continue importing.”
Mansour began airing in March 2014 on the Cartoon Network Arabic Channel. One particular episode, featuring an Emirati boy running away from a diabetes monster, successfully conveyed a message of the importance of keeping a healthy lifestyle to children.
“We decided to create an app because we had one of the highest viewership on this specific episode,” Al Harmoodi says “We created the app [Mansour Run App] and most downloads came from kids in Saudi Arabia, then Egypt, Iraq, and the UAE.”
The award-winning Mansour Run mobile app has received more that 1.3 million downloads globally since launching in 2014.
“To be honest, we’ve got a lot of interest,” he adds. “We also realised that we need to introduce a character from Saudi Arabia in Season 2 because we learnt through the app that we had a huge fan base in Saudi.”
Helal Al Yammahi, founder of Shaheen app - launched as part of twofour54’s Creative Lab initiative - which allows players to control a virtual falcon, agrees that apps have proved to be a powerful medium for educating younger generations. “I really feel that the apps industry is the future,” he says. “Now if you want to pass a message, if you want to announce something, you should better announce it through an app rather than TV or radio or newspaper. The focus nowadays is on apps.”
Both Al Harmoodi and Al Yammahi have tapped into the fast growing mobile gaming sector - the industry’s annual revenues are expected to increase from $8.8 billion in 2012 to $14.4 billion in 2017, according to PwC’s annual Global Entertainment and Media Outlook 2013-2017.
In addition to satisfying consumers who increasingly turn to smartphones for entertainment, Al Yammahi explains that his app is aimed at presenting falconry, which is not only one of the oldest and most popular sports in the region, but is also considered as part of the Arabic culture and tradition, to the world.
“Most games have a character who is a stranger to us and our environment,” Al Yammahi says. “We are playing the games of others. So I noticed that we had to do something related to us and our environment. I chose to focus on falcons because falconry is our traditional sport.
“I chose Abu Dhabi landmarks for the first version. Apps are the future and I selected different tourism areas in Abu Dhabi because I know that many people will ask where it is, and similar. In the second version I will present Dubai.”
Young Emirati engineer Alya Al Shamsi also opted to combine her passions for falconry and technology to enhance falconers’ experiences and take the traditional sport to the next level. Working with Marshall Radio Telemetry, Al Shamsi developed Aerovision, the first iOS only app for falcon tracking.
Prior to launching on the Apple App Store, the Aerovision app, which is considered by professional falconers as a game-changer for the sport, was tested by more than 300 falconers in the UK, Germany, Spain, the US and the UAE. They are now able to track distance, speed, climb rates, altitudes, temperatures, and record a live 3D flight path of falcons on their iPads and iPhones.
A different experience is what Irfan Ahmad, founder and CEO of Irhal, a web- and app-based halal travel platform, strived for during his many travels when he was able to source all the information usually needed by a tourist, but not also by a practising Muslim.
Before long he launched Irhal, an Arabic and English website and mobile application with city guides that include information on Halal restaurants, mosques and prayer timings.
“The main differentiator is the information on Halal restaurants, mosque locations, prayer timings and Qibla direction,” Ahmad says. “All these points of interest are visible on a GPS enabled map. So, if you are near the Louvre or near the Sydney Opera House, and you are hungry, all you need to do is to look at the app and discover the nearest Halal restaurant.”
The Islamic travel sector is the fastest growing segment of the travel industry, with 150 million Muslims forecast to spend $238 billion by 2020, Ahmad says, adding that it has become saturated and not a niche sector anymore due to the increased demand.
“We are now razor focused,” Ahmad further explains. “Our initial market is the Middle Eastern traveller. Our users are mainly from the GCC, predominantly Arabs and mostly from Saudi Arabia. This GCC traveller spends 31 percent of the total amount that is spent by Muslim travellers each year.”
“But we do have users from Malaysia and Indonesia as well as users from the US and Europe.”
The Irhal website has over 1.5 million unique visitors, while the Irhal app, which currently offers more than 90 city guides for free, has been downloaded around 35,000 times. Ahmad plans to continue allowing the free download of the app for the next two years after which the users will be requested to pay $1.99 for every additional city downloaded.
This will help the Irhal team to monetise the app which is currently generating only advertising revenues. “We made some mistakes at the beginning, but we are now a ‘lean mean fighting machine’,” Ahmad says about the experience of bootstrapping his business. “We started with three people and quickly grew into a team of 10.
“And then I realised that my pockets were not as deep as I imagined them to be. We then decided to outsource most of the work.”
In June 2015 Irhal was the only MENA-based start-up selected from over 2,200 applicants to take part in MassChallenge, a Boston-based no equity and not-for-profit start-up accelerator. Furthermore, Irhal was also the only regional start-up selected for the first global travel start-up programme by Google for Entrepreneurs and Astrolabs Dubai.
However, cracking the regional mobile app industry has not proved to be an easy task mainly due to the lack of funding. “Last year I started exploring funding opportunities as we needed money to scale,“ Ahmad says. “Most people in the Middle East are willing to invest $20,000 to $30,000 and take 20 percent equity in the company. We are looking for over $1 million in funding. For this kind of funding local investors want us to show revenue. They are risk averse.”
“We are a content app and need volume before we can generate substantial advertising revenue. So, it has been difficult to raise funds. We did get an offer of $100,000 from a Dubai government entity, but turned it down as it was not enough to help us reach our milestones.”
Judging by recent findings, the risk aversion of local investors is unjustified.
Mobile device users installed nearly 156 billion mobile applications worldwide in 2015, generating $34.2 billion in direct (non-advertising) revenue, according to a new forecast from International Data Corporation (IDC).
Apple’s App Store outperformed Google Play in terms of revenue generation, capturing nearly 58 percent of global direct app revenue in 2015. Google Play, which captured nearly 36 percent of direct revenue, ensured a greater overall number of installs, capturing about 60 percent of install volume in 2015.
IDC states that both ecosystems are more than sufficiently established to sustainably attract developers, estimating that the industry will reach more than 210 billion installs and nearly $57 billion in direct revenue in 2020.
Gorani self-funded AlphaApps at the beginning and opted not to seek external funding. In addition to the Sira App generating revenue, the Alpha Apps team develops customised apps for businesses, including CNN, Tadawul, twofour54, and more.
Speaking about the struggles of content creators in the region, he says: “The main challenge relating to Islamic target audience is the lack of willingness to pay for content. In the past, it was always expected that content was for free. So if you now want to monetise content, people do not always accept that. In general, people in the region don’t like to pay for content.
“I think there are different reasons for that and one is that online credit card payment was an issue. Also, a few years ago the App Store or the Google Play Store were not localised. You could pay only in US dollars, whereas now you can use local currency.
“Also, a lot of the laws here do not really protect intellectual property and people are not aware of piracy and that it is legally or ethically forbidden to get music for free or any content which is payable for free. The laws here are less strict than in Europe or the US.
“The third reason is that because they are not used to paying, they just don’t pay. It is because there is nothing tangible. You are selling something digital and if it is not tangible, people don’t feel that they are buying something that has value.”
The UAE leadership has taken various steps to support innovators, including mobile app developers, in the country. Last year Sheikh Mohammed bin Rashid Al Maktoum, the UAE’s Vice President and Prime Minister and Ruler of Dubai, launched The Sheikh Mohammed bin Rashid Al Maktoum Fund To Finance Innovation worth AED2 billion ($544 million).
Among the country’s many smart city initiatives, the Telecommunications Regulatory Authority (TRA) is to host the second edition of the Arab League Educational, Cultural and Scientific Organisation (ALECSO) Apps Award, an annual competition for applications in the educational, cultural, scientific and educational games sectors in the Arab world, in November.
The private sector players have also been active in supporting local mobile app developers. One example is Emirates Islamic’s El Apathy competition, a 24-hour challenge for the UAE-based students and professionals to develop innovative fintech apps.
The question that remains is how can a locally-developed app compete on the international market. “I think you have to choose your target audience very well, and you have to be able to target your marketing channel very well. If you can reach these two things, and you have great content, you can win,” Gorani concludes.
“However, if you are too broad and you don’t have high quality, then you can’t compete with big publishers. Without really experiencing the market and knowing how to monitor it, it is going to be a challenge.”