App business models are also changing and you need to gage your app business model accurately

A device consuming servicesI read an interesting article today from eWeek with the heading: “Mobile App Developers Should Keep Their Apps Free: 10 Reasons Why.” The app market is evolving and there is also quite a bit of confusion of the definition of the app market. In my books, it is a change in architectural models and a new way to consume information. An example is the app model for SharePoint 2013 and how Microsoft suggests new generation SharePoint apps should be built. In Microsoft world, app development can be more than just developing apps for Windows 8 and Windows Phone 8, it could be apps that are consumed from Windows Azure using SDKs (Software Development Kits) which have native support for iPhone, Android and Windows Phone 8. The user experience is delivered to different devices from the same service using consumable APIs; the service needs to be consistently delivered across any device.

It is also interesting is that a successful app store is not always the best for developers, as your solution can’t really shine among the 50 others occupying the same space. eWeek states that Apple’s App Store has become saturated as there are 1 million apps and each day there are new apps developed, both good and bad. This saturation has also led to app developers to design free apps  and then revenue generation with in-app (IAPs) purchases. According to a recent Distimo report, 76% of all US Apple Store revenue is generated from IAPs.

The ten recommendations for App development:

  1. Single Payments Do Not Produce Returning Revenue
  2. If you build it, they will pay later (in-app purchases)
  3. If your app isn’t free, another one will be
  4. An initial fee creates a barrier between you and your customer (many do not even look at paid apps anymore)
  5. Paid apps give too much away (do you really want to give free updates for the rest of the life for the user?)
  6. Mobile users try before they buy
  7. Revenues from a one-and-done price model is hard to gauge
  8. Value-based revenue is even harder to gauge (what is too cheap and what is too expensive?)
  9. Mobile users also buy as they try (based on usage-based pricing)
  10. Free apps simply reach more people. According to App Annie’s recent list of top grossing iPhone apps in the US, nine out of 100 apps exist as purely paid apps and 91 of the top 100 apps are free to download and generate revenue using other methods.)

We conclude that app developers should really focus on what type of business model they want to apply in every individual case. I would also want to encourage app developers to look for new ways to gain more exposure and one of them is to build for App stores where they will enjoy more visibility.


photo by: jacilluch

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