Middle East app-writing competition promotes shrinking opportunities

Winner of the Arab Mobile App Challenge will receive a US$25,000 prize.

The world’s largest competition to build the next killer app is heading to the Middle East – even as novice app manufacturers are finding it harder than ever to survive.

The winner of the Arab Mobile App Challenge, a preliminary round of which will be held in Dubai, will receive a US$25,000 prize, as a consortium of companies including Ooredoo and Pearson bid to encourage young people to embrace coding.

They will then have the opportunity to compete against app-makers from across the world at the Mobile World Congress next year in Barcelona.

But winners will not enter a market brimming over with opportunities. A glut of apps, and an increasingly competitive marketplace, means that even talented coders must compete against tech giants with the financial muscle to divert audience attention away from their peers.

While Apple has enjoyed exponential download growth at the App Store, with just under 80 million cumulative downloads projected for the end of this year, this has not trickled down to profitability for small app makers.

Twenty four per cent of app developers make a loss, while 39 per cent find themselves either breaking even or recording only nominal profits, said a report from the tech research consultancy VisionMobile.

The Middle East and North Africa has about 86,000 app developers and is growing at 23 per cent annually, VisionMobile said.

But fewer than 37 per cent of app makers in the Middle East made a profit last year.

Some analysts have expressed scepticism about optimistic valuations for a procession of app-based start-ups as more and more money chases worse business models.

Yo, an app that allows people to send messages to one another consisting only of the word “yo”, received $1.5 million in funding in a deal that valued it at $5m to $10m.

Vessyl, an electronic beaker that can identify the liquid you are drinking even as you are drinking it and tracks your consumption with an app, has won $1m of pre-orders and retails for $200.

“I think Silicon Valley as we know it may be coming to an end,” David Sacks, the former chief operating officer of PayPal, wrote on his Facebook page in 2012.

“To create a successful new company, you have to find an idea that has escaped the attention of the major internet companies, which are better run than ever before ... and is protectable from the onslaught of those big companies once they figure out what you’re on to,” he said.

“How many ideas like that are left?”

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