Mobile Application Business Models
There have certainly been a lot of buzz generated around the iTunes Store business model when it comes to software for the iPhone/iPod Touch, and it will inevitably hit the Android Marketplace sometime this month. The question is, what will be the response to paid applications in the Android Market, and how will developers react to these responses?
As a developer, I think it has been nice to have a little bit of time to look into what has gone on with applications in the iTunes Store. Let’s take a look:
A vast majority of the paid applications are 99 cents. Enter the term “ringtone apps”. This term was really popularized by Craig Hockenberry, a developer for Iconfactory. His (and others) opinions for paid apps is that it just really doesn’t make the apps platform any richer, but rather pollutes the store with crap-ware. I tend to agree with him. For companies who specifically design software for the iPhone/Android, they need that additional revenue earned to be able to pay other programmers, designers, advertising costs, etc. to be able to complete a project. With pricing their app at, say, 2.99 or higher, they may not break even, even though that should be what the software is worth. Instead, they have to drop their price down to the 99 cent range in order to get the optimal amount of sales, and hopefully, make some profit.
On the other hand, there are individual developers, such as myself. I do the design, I do the labor, I do the promotion, and I may choose to sell the application for 99 cents. I have less overhead than say, a 6 man development team, but I may stand to gain more in the long run just because I did everything myself.
It’s a tough topic for me, and possibly for others, because I can see on both sides of the fence. Personally, I would pay 3.99 or 4.99 for a well designed, purposeful application that I’d use often, but I’d also likely purchase 99 cent applications more frequently because, well, its 99 cents.. am I really going to miss it if I don’t like it?
I had a brief discussion with Wes Wadsworth, author of the Force Ring Android app. In one of his previous releases of Force Ring, he did not previously mention that he changed the application from freeware to trialware, and a $3 charge was being asked for to use the ‘full’ version. As I scrolled through the comments for his app, I noticed he was making a lot of people quite upset, thus dropping his review down to 3.5 stars or lower. Perhaps he was just anxious to be rewarded for his efforts, and hastily set a price on a previously free version. I can’t say I blame him, developing any software by yourself can be time consuming, but there’s something to be learned here: Do your best to make your customers happy. Some will moan about having to pay for an application, but that doesn’t mean it’s wrong to charge for your work. Just make sure it is good enough to put your name on, and be proud of at the end of the day.
So, for all of you Android developers, kindly investigate the statistics surrounding the iTunes app store, and make the decision that’s right for you regarding your application’s business model.
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