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14 July 2017

Australian app economy booms but games may have peaked: report

TASMANIAN illustrator James Cuda didn’t set out to influence Silicon Valley investors or represent Australia’s “app economy”.

He just wanted to make art easier to create on Apple’s new tablet.

But since its 2011 launch, the Procreate iPad app has attracted millions of users, attention from top film studios, and sits in second spot on Apple’s paid entertainment apps chart, making Cuda’s creation one of Australia’s digital success stories.

Savage Interactive chief executive officer and co-founder James Cuda with the Apple Design Award given to his company’s Procreate app.

Savage Interactive chief executive officer and co-founder James Cuda with the Apple Design Award given to his company’s Procreate app.Source:News Corp Australia

“We created it for the professional market and we just built it so we would love it,” he says.

“Now we’re getting used by Disney and Pixar and getting great requests coming in from movie studios, but we still measure (the app and new features) by whether we’d like to use them.”

Savage Interactive, which he and wife Alanna began in a spare bedroom, now boasts a dedicated office, 11 workers, “can’t hire people fast enough,” and is planning a significant update for later this year.

READ MORE: Melbourne schoolboy’s app impresses Apple CEO Tim Cook

The Hobart-based firm is also inspiring other Australian app enthusiasts seeking similar success, with a new report showing more people are joining the app market at all levels.

American think-tank, the Progressive Policy Institute, found Australia’s app economy has grown 11 per cent since 2014, and now employs more workers per capita than in Europe.

More than 113,000 Australians now work in apps, according to the report, from those who write code to others who market, administrate, and manage the businesses behind them.

“The app economy has unleashed an important source of employment and economic growth in Australia, especially in the wake of the Great Recession,” author and PPI chief economic strategist Dr Michael Mandel says.

“And, as this sector continues to expand around the globe, Australia could become an exporter of apps and app-related services.”

Artwork ‘Stargazer’ created by Patipat Avasavena using the Procreate app.

Artwork ‘Stargazer’ created by Patipat Avasavena using the Procreate app.Source:Supplied

While Dr Mandel admits mobile games and e-commerce apps are “probably close to their peak,” he says there are still plenty of opportunities to create successful apps in new areas, with connected home appliances the next big thing.

PPI found the app industry employed almost one per cent of Australian workers — at 0.9 per cent — putting the country ahead of Europe (0.8 per cent) but just behind the United States (1.1 per cent).

New South Wales bests the US for app-making, however, at 1.5 per cent, and leads the rest of the country with 56,100 workers involved in making and supporting apps. Victoria and Queensland follow, with 29,000 and 14,500 respectively.

The Rise of the Australian App Economy report also has potentially salient advice for new app makers: Apple apps make more money. The tech giant recently revealed it has paid $US70 billion to developers since 2008.

The Progressive Policy Institute report found there was more competition, but also more money to be had, in creating apps for Apple’s iOS platform.

The Progressive Policy Institute report found there was more competition, but also more money to be had, in creating apps for Apple’s iOS platform.Source:News Corp Australia

“From a policy perspective, the iOS ecosystem is likely to have a larger impact on entrepreneurship and the economy in Australia,” Dr Mandel wrote. “That’s because iPhone owners in Australia typically have higher incomes and iOS apps tend to generate higher revenues for developers.”

There is more competition to make the next hit iPhone or iPad app, however. The report found 86 per cent of app economy workers were involved in making Apple apps, while 77 per cent produced apps for Google Android gadgets.

And Cuda advises potential app makers to put aside considerations of how much money they might make or devising a “clever” angle, and instead focus on what they’re passionate about and how they can help users achieve goals.

“Do it for the love of it and the money will come,” he says.

“We worked for four years without any funding. You have to have a lot of tenacity to break through in this market because there’s a lot of noise.”

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