The mobile industry is booming and many are thinking of ways to create profit from a mobile app. Creating mobile apps is just one aspect of Sweb Developments capabilities, but we often get calls from individuals that have great ideas and the dream to make lots of money. We hear things like, “If only “X” amount of people buy my app, I’ll be set,” or “There’s billions of people around the world, I just need “X” percentage to buy the app and it’ll be great.” If only things were that easy.
Free apps still dominate the majority of apps on the market. There’s a fair share of paid apps that bring a great amount of value to users, but most will seek out a free alternative before opening their wallet. One of the things we advise our clients on is the importace of value to the user. The value of an app and the information within needs to be something users in a particular market need and cannot get anywhere else. More often than not, with the expanse of the internet growing daily, that’s becoming a harder thing to do. Are there alternatives?
Freemium over Premium
In the past few years we’ve seen freemium models crop up. The freemium model establishes a foundation with access to a free app with content inside that users find interesting. The idea is to give a little and then rely on in-app purchases to increase the value of the app over time to the user. Game apps provide excellent freemium models, but more serious apps are also taking notice. Say for example you’re a public speaker or an instructor of some sort. Your app has value as a stand alone free app for those seeking the information you’re providing, but for a little extra charge they can download videos of your engagements, documents, or components of the app that increase the value and interest of the user.
According to a Mobile Entertainment article, In-app Purchases Will Be 64% of all Market Value by 2015, they quote IHS Screen Digest in stating that “in-app purchases contributed 39 percent of all app revenue in 2011, with a total haul of $970 million.” That’s a hefty number that’s close to being half of the mobile market revenue. What’s more interesting is that with the going trend of in-app purchases, 2015 is going to be a big year for in-app purchases across all markets.
To further support the in-app purchase strategy, IHS Screen Digest encourages app owners that “best way to make money in the smartphone apps market is to give the apps away for free-and and then generate revenue on subsequent sales of in-app purchases,” from an article in Mobile Marketing Watch. Of note though, the path to riches is not always the same, so when as your app is being developed, make sure you work with the team closely and be sure you’ve done the research.
So while a mobile app may be the path to the riches you seek, take some time to think of the value you provide and if the users in your target market would pay for the continuing updates that in-app purchases would require.