Israeli applications guru Ori Segal recalls that pivotal moment at the 2007 Consumer Electronics Show (CES) in Las Vegas, when a friend showed him “some weird device called the iPhone” and explained he could order a pizza by touching some icons on the screen.
Less than a decade later, of course, millions of people are using millions of smartphone apps to order pizza and do a whole lot more. Seeing the potential, in 2008 Segal established one of the first teams in Israel dedicated to mobile app development.
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Today, iApps Technologies of Herzliya and New York has developed and launched more than 600 iPhone and Android applications and recently spun off a startup in the music apps space.
Israelis are among the world leaders in app development, says the iApps CEO, who hosts TV and radio shows and writes columns for Israeli media on the topic.
“If 20 years ago Israel was all about Internet and dot.coms, in the last three or four years it’s all about apps, ” Segal tells ISRAEL21c.
Aleph VC partner Eden Shochat says that Israeli prominence in the mobile app space wasn’t a given.
In fact, he tells ISRAEL21c, “The deep engineering and data-orientation capability of the Israeli ecosystem was initially a hindrance, as this isn’t a culture that celebrates ease of use and great user experience. As UI/UX [user interface/user experience] talent improved dramatically through expats coming back from Facebook, Yahoo and Google tenures, this reversed.”
“If 20 years ago Israel was all about Internet and dot.coms, in the last three or four years it’s all about apps.”
Consequently, Shochat continues, “Israeli engineers and growth hackers solve the biggest challenges for application developers: being discovered, growing the user base and monetization. The combination of (newly) great app user interface, rock-solid back-end and data-driven user acquisition are the drivers of the success of the Israeli app developers.”
Segal says Israel has become one of the four main centers of app development along with India, Russia and the United States. “The app will cost less and be of better quality here in Israel. Most of the world knows that Israeli developers are the best.”
The Israel Export Institute’s StartApp Nation hub has an online list of 116 Israeli mobile app companies, while IVC Research Center has a list of 1, 040 Israeli app companies created with original technologies. Neither list is exhaustive.
It’s also significant that 65 Israeli companies sent representatives to the ISRAEL: StartAppNation pavilion at the 2016 Mobile World Congress in Barcelona.
Israeli startup adviser and tech blogger Hillel Fuld says mobile apps are driving Israel’s transition from the “startup nation” to the “scale-up nation.”
“There are more entrepreneurs per capita in Israel than in any other country, and rarely is someone starting a company that’s not mobile, ” Fuld tells ISRAEL21c.
“We’re seeing fast-growing mobile companies in Israel like Moovit and Onavo, but even companies releasing platforms for the web also have a mobile component. In consumer startups, you have to have a mobile element to have any chance of success.”
Smartphone ownership is extraordinarily widespread, with an estimated 2.6 billion devices in use across the planet.
Fuld points out that “you could open the App Store every day and see endless new ones developed in Israel. Some of these companies don’t get much press but have an insane amount of downloads.
“For example, Fitness22 [in Petah Tikva] has a whole portfolio of apps — many of them paid even though 93 percent of app downloads are free — and they have over 30 million downloads. Contacts+ [in Tel Aviv] is at the top of GooglePlay with over 20 million downloads. It’s one of the biggest contacts databases in the world.”
5 areas where Israel shines
Segal pinpoints the following niches in the mobile space where Israel stands out and can be expected to become even more prominent in coming years:
- Internet of Things (IoT)
Mobile apps provide the interface for Internet-connected device-to-device communication, a field that is rapidly growing. By the year 2020, an estimated 25 million apps will connect with devices, Segal says. “Now there are about 1.5 million apps in each app store, so we’re talking about a very big jump.”
One example is Samsung SleepSense, an under-the-mattress device that tracks sleep habits, sends tips for better sleep to the user’s smartphone, and adjusts devices such as air conditioners and televisions that may be interfering with sleep. SleepSense’s contact-free sensor technology was developed by EarlySense of Ramat Gan, and its companion app by iApps. The product won a 2016 CES Innovation Award in the smart home category.
Mobile health (mHealth)
Leading VCs from Germany, Japan, Hong Kong, the UK, US and other countries came to Tel Aviv last February for the mHealth Israel conference organized by mHealth Israel, a nonprofit for healthcare innovation entrepreneurs.
“Mobile health is huge, ” says Segal. “Many products for analyzing health parameters all want to connect with smartphones.”
For example, Dyson’s Pure Cool Link air purifier and GE’s smart-cities energy startup Current use air-quality analysis software developed by Israel’s BreezoMeter. Both rely on smartphone apps to send real-time respiratory health alerts and allow for remote setting.
There’s no need to wait for a teller or queue up at an ATM now that we have mobile apps for banking tasks such as check-scanning, depositing, money transfer, mobile payments, loans, fundraising and asset management.
According to one study, Israel has 430 fintech companies.
Jerusalem-based OurCrowd global equity crowdfunding platform introduced a social investor app at Finovate Spring 2016 in San Jose, giving investors the ability to make investment decisions ranging from $10, 000 to $10 million on their mobile phone in consultation with their social networks.
“Fintech is primarily about deep data science, an area that is particularly strong in Israel as it has strong military applications across areas such as security, computer vision, NLP and many others, ” Check Point Software cofounder Shlomo Kaufman recently told TechCrunch.
“Four years ago we set up the innovation lab and it has grown exponentially. Israel is an incredible hub, ” Citi Israel CCO Neil Corney told i24 News. “We’ve doubled our employees every single year and it looks like we’re continuing to grow. This is really the place to be for financial technology.”
Israel was one of the pioneers of apps that aggregate passive or active input from other users (crowd wisdom) to help people do everything from catching a bus or train (Moovit) and avoiding traffic (Waze) to finding better deals on airline tickets (FairFly) and identifying possible skin cancer (DermaCompare).
“We’re seeing more and more crowd-based ventures in Israel, ” says Segal.
It’s not for nothing that the international Casual Games Association (CGA) chose Tel Aviv to host the 2015 Casual Connect event, one of the biggest gaming conferences in the world. Herzliya-based international social games developer Playtika partnered with the CGA to organize the event.
“We’ve been following the Israeli gaming industry for a while and there is no doubt that Israel has become a global powerhouse in the category, ” said Casual Games Association managing director Jessica Tams.