The app market is booming and each day brings forth a potential game changer. This is due to the fact that mobile platforms are growing rapidly, and reaching ever greater heights. In 2014, the mobile internet usage has managed to surpass the desktop one, and smartphone owners are also seasoned internet surfers. These are impressive numbers, but you are most interested in figures in your bank account, are you not? Here are some major strategies for hitting big on the app market and maximizing the profit.
On the money
For some people, creating apps is a lot of fun, but above all else, it is a serious business. Making sleek, versatile software takes a lot of time and effort, and naturally, you would like this to pay off. However, quality app does not automatically translate into high revenue. You must get a hold of the numbers game, and identify the best way to spur financial success. There is a plethora of options for monetization, and choices matter a great deal.
It is clear that innovative ideas are not worth the paper they are written on if you do not know how to make money off them. The first thing to get straight is whether your app concept really solves the problem for the potential customers and whether they are prepared to pay for it. Therefore, you need to take your time when picking a platform for the app design, because they have varying penetration potential as well as popularity.
Apple’s iOS is the king, with one quarter of developers earning at least $5,000 per month. Now, this is not to say that this iOS is a no-brainer. Android market is also prominent, and 16% of developers make $5,000 monthly. Also, it is regarded to be “top heavy”, meaning that the most successful developers enjoy much of the current revenues, while the Apple market is more spread-out, where newcomers have better chances to secure a piece of the pie.
Doing the Math
Bear in mind that both business owners and individuals can take advantage of established financial consultants and other individuals proffering their impeccable expertise. This is a way to grasp all the legal, economic and financial aspects of your efforts. Building an app all while anticipating changes in the industry and dealing with tax evasion and piles of paperwork all by yourself is not a recipe for success. Hiring an outside financial service consultant to help you with all your tax problems and anticipating income will save you a great deal of stress and money. What helps you get through the financial tunnel is the light lit at the end of it— a decision on the monetization model.
So, let us narrow down the choice, and present three major pricing models that hold water. First off all, the evidence suggest that in-app revenue coming from free software brings hefty profit. On the second place, lagging far behind, are paid revenues, followed by in-app revenues for paid products. This is the holy trinity of monetization, so I advise you to look no further when musing on the appropriate model for your app.
Pay to Play?
When it comes to the freemium strategy, many people do not know that this is a real cash machine. This may seem counterintuitive, but products like Clash of Clans or Spotify Music account for the 76% of all revenue made on Apple App Store in the U.S. Freemium apps and games are available free of charge, but they come with limited features and content. To unlock the premium ones, users have to make an in-app purchase, and the same logic is applied when subscribing to monthly updates.
Note that this financial model allows you to eliminate the price barrier, and enable users to witness your ingenuity quickly and easily. Still, the financial prizes are grand: Candy Crush, for example, earns staggering $884, 676 on a daily basis via app purchases. Another possibility, however, is to forge a one-time paid app. This model requires you to launch an app which is compelling enough to attract users and lure cash out of their pockets. The initial version is expected to include all the core values, while free extensions involve minor improvements in design, usability, etc.
Thus, there is no continuous revenue stream coming from existing customers, meaning that developers must focus on acquiring new ones. If this does not seem satisfying, there are also paid apps with additional paid features. This hybrid model is growing in popularity as of late, but it has also created an opposing front of critics. Namely, some deem it unjustified to pay for the features of an app which is not free to begin with.
Beyond the three established models, there are some other financial strategies that pay off. This is the case with free apps that rely on advertising. A model such as this is interesting because it is devoid of the expectation that users should throw money at you. Many developers like Shazzie have utilized this tactic, and run ads that do not interfere with the user experience. Still, understand that in order to make good money, you would have to perform well on the market, and enjoy a frequent and prolonged use of your product.
As Sound as a Dollar
With the estimated global revenue of $46 billion, the competition in the market is fierce, but the rewards are well worth it. In such a situation, jumping into app building without the money making strategy in place is a sure way to waste both your time and talent. When musing on the course of action, do not make the mistake of thinking that free apps do not provide hefty profit. In fact, many developers have made fortunes with this concept, although it is far from the one-size-fits-all solution.