Chinese mobile app developer Sungy Mobile saw an 8% year-on-year decline in revenues from mobile apps in the fourth quarter of 2014. Revenues from mobile apps have barely grown since the fourth quarter of 2013, though the company has reported stable growth in user numbers. Two factors may explain the stagnation of revenue growth: (1) a failure to convert free users into paying customers of its own or third-party offerings, and (2) Chinese competitors entered the market aggressively in 2014.

Sungy Mobile was one of the first if not the first Chinese mobile service developer with the majority of its users from overseas that went to IPO in the U.S. Before it went public in late 2013, Go Launcher, its flagship Android app, and several personalization apps for Android had had a total of 325 million installs, 70% of which were from outside China.

Sungy Mobile’s Android launcher business was regarded as a success in applying a proven Chinese business model to overseas markets: gaining a large user base with a free and user-friendly internet product and then monetizing it by offering advertising inventory or taking revenue cuts from businesses who are allowed to sell goods, physical or virtual, to its users. At the time of listing, its revenue sources included mobile advertising, paid app downloads and in-app offerings.

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Tracey Xiang

Tracey Xiang is Beijing, China-based tech writer. Reach her at traceyxiang@gmail.com