Is App Development A Lucrative Endeavor?

Apple and Android have a lot of app developers wanting to get their creations on the respective platform’s app marketplace. However, the reality is that most of these individuals will find their earnings to be at the lower end of the scale. Apple is ahead in terms of how much is paid to iOS developers but there is no clear finding as to how much developers make.

app money per downloadThe average Android app will be downloaded more times than one from Apple, but will only give its developer roughly 2 cents per download. Microsoft’s platform may give developers 15 cents per download, but their numbers are down, giving Android and iOS the advantage. One of the reasons why app developers aren’t making all that much money is the abundance of apps that are free to download.

For every one paid app, there will be hundreds or thousands of free apps just like it. It’s fairly easy to compute how much a developer makes just by looking at the number of downloads a particular app gets, its price, and how much will go to the marketplace. In Apple’s case, it will be 30% and they seem have to set that industry standard.  Checkout the Mobile App Development Guide to learn more about Pricing Models and Profitability.

The bottom line is this: a diligent app developer for iOS might be able to buy big ticket purchases such as cars and the like, brand-new, while Android and other developers will have to settle for secondhand based on the revenue they make. Apple is said to average $4,000 per app but it is unsure whether or not a developer can make a living with one app on a particular platform. Here are a few ways through which app developers can make a profit:

The Popularity Of Free Apps

free appsYet, there remains the main gripe with apps that come at no charge: ads. Apps must find their funding somehow and those that put the app up for free must work with advertisers to make money. As the app is free, the only way to make money is to team up with advertisers but do so with care since the type of ad displayed along with how it is displayed will be instrumental to how well an application does.

“Ad spending on apps of all kinds – both mobile and desktop — is growing. Most industry analysts choose to measure only mobile app spending though, as most apps are created for the mobile and smartphone space. Mobile advertising revenue increased nearly 1.5X in 2011, to top out at $1.6 billion for the year.” (John Manoogian III, TechCrunch 2012)

Then Comes The Freemium Model

freemium appsAfter all, it does stand to make more money than a paid app. Freemium apps are applications that can be downloaded and installed at no cost, but should a user want to get premium features of the app, they can make in-app purchases either with actual cash or game/app tender. This allows more users to give the app a try since there is no price barrier at the onset and they have the option of expanding their experience by buying paid features. Once a user has had a taste of what the app has to offer and decides that they like it, they are much more likely to foster a relationship with them which, in turn, makes them feel more at ease to pay for more features.

A lot of games make use of in-app purchases and it is a pricing option that the biggest companies in the world, like Disney, make use of. There is also the option of offering a monthly or yearly subscription along with various other paid in-app features. This will work best when the app has garnered a considerable number of users and is likely to make more money in the long run.

Paid Apps With Free Updates

app pricingThe problem with paid apps is that a developer has to create one that the public will want to buy. There will most probably be no additional income to be made once the user has paid for the app and if a developer charges for new features, a user is likely to complain, and then uninstall. It must be noted that there is a price option that requires users to pay for the app and to keep paying to avail of more features.

The trick here is to keep a continuous stream of new customers so that the app makes money. iOS apps must make $47,000 a day to be featured in the Top 10 Paid Apps but it has been found that certain apps can make money in the millions even without making it to the Top 10.

Paid Apps With Paid Extras

extra app featuresThis is a price option that is fairly new and despite the criticism it has been receiving, it has gotten a bit of traction as of late. Customers are much more likely to feel like it’ll be too much to pay for an app but with the right application, there will always be users who will be willing to pay premium as long as they get their money’s worth. For every runaway hit in the app marketplaces, there will be a large percentage that will have almost nothing to show for their work.

It is fair to say that app development can be lucrative but, as with all things, there has to be a certain amount of effort put into it to increase the chances of success. The best thing to do is keep striving for improvement and not bet all hopes on one app, because what the media doesn’t feature are the hundreds and thousands of disappointed developers who didn’t make the cut.

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