Posts Tagged ‘Making money’
|Go big or go free: how to price your iPhone application
Tuesday, September 1st, 2009
One of the most common questions from new iPhone developers releasing their first application is what price they should sell their application for. Well, my answer is simple: go big or go free.
And here’s why.
If you decide to sell your application, I don’t believe $0.99 is the best price in most cases. Usually, the $0.99 applications are perceived as being simple, not very well done and cheap-looking. Users will question how much time and effort was really put into such a cheap app. Once the user has passed the invisible barrier between free and paid, the difference between $0.99 and $1.99 isn’t a major one for them, but it could be a significant difference for you, the developer.
While going from $0.99 to free may mean going from 100 sales/day to 5,000 downloads/day, going from $1.99 to $0.99 may increase your sales as little as 10%. So, if your app is currently priced at $1.99 and you average 100 sales/day, if you were to go from $1.99 to $0.99 you would earn $77/day instead of $140/day (after Apple has deducted their commission). And, if your application isn’t crappy of poor quality, don’t be afraid to charge even more, you would be surprised by how much money you could be missing out on by not doing it. Don’t get me wrong, I have a few $0.99 applications myself, but it’s because I don’t think they are worth more than that or because that’s the price tag people are generally expecting for those kind of applications.
On the other hand, free applications, if well marketed, can pull huge numbers. My application iShotty was downloaded about 80,000 times because it was free and didn’t cost a dime to try it out; there was no risk involved. Keep in mind that free applications with a good retainer rate can generate significant income from ads.
So, if you want to distribute a very cheap application, give it away for free, and find different revenue streams for it. Otherwise, don’t be afraid to charge what your iPhone app is really worth.
Tags: Apple, Applications, iPhone application, Making money
Posted in iPhone | 2 Comments »
iPhone applications: where to start?
Thursday, February 12th, 2009
Last time (a couple of posts ago) I talked about the possible revenue models for an iPhone application, but what it’s the real first step? Very simple answer: the Idea.
The answer is actually simple, but having the right idea is the hardest part of the all process. You can pay somebody to program your application, you can pay somebody for the design and maybe somebody even to market it, but to be successful it’s need to be a good idea.
I know, tons of fart applications making thousands of dollars might induce you you think that the function of an application isn’t important, but even the most stupid application to be successful need to answer to a demand. Fart applications, even if stupid, like iBeer applications fill the need of showcasing the iPhone with friends.
Also it’s important to research the competition. Once a friend asked my opinion about an idea he had for an iPhone application: a weather app. These are some of the questions I immediately asked him: do you really think you can make a better weather application than the other 100 already existing? Are you going to tap a specific niche (big enough to guarantee you some profit)? Are you sure you’ll be able to collect all the informations you need to “feed” your application? Can you compete with the big players in your niche?
If you can’t answer yes to all this maybe you need to re-think you application.
Third, and very important thing you need to consider is your budget. Are you going to code the application yourself or are you going to hire a team? My suggestion is always to start small. It’s a new market, it’s really eclectic and hard to predict. On top of that you are at Apple’s mercy, so don’t invest thousands of dollars in an application Apple might not even approve. Not all the applications will make $40,000 in 2 days. Actually probably you’ll never be able to do that.
Go small and safe, even if sounds too little $5-10 per day isn’t a failure if you only spent $400 to build your application. Build few small application to create a constant revenue stream, and then, once you build a small capital, you can try something bigger and more risky.
Do you want to know what I think is the best way to create a revenue stream? Cloning.
Build an app, something that could be easily cloned and reused with a different theme or topic. In this way you can pay once for the developing process and multiply your income.
Easy, isn’t it?
Tags: iPhone application, Making money, Micro-developing
Posted in Developing, iPhone | No Comments »
Possible revenue streams for iPhone applications
Monday, January 26th, 2009
After almost 3 months of experience in the iPhone application market I think it’s time to make some considerations.
First of all, you need a business plan. A lot of people think that just because iPhones and iPhone’s Apps are hot, then they will get rich overnight.
Wrong.
You need a business plan: an idea of the developing costs and have some sort of revenue projection. Most important, you need to take in count that if you think you app would sell between 10 and 50 copies per day you probably need to make your projections on a 5 sales/day.
In this post I’ll try to cover the revenue stream part.
Where the revenues come from?
- Sell your application. This is of course the most immediate solution. Buying applications on the iPhone (and iPod Touch of course) is just one password away. That’s a huge friction reduction during the sale process. When you buy some desktop software you need to look around for your credit card, fill up at least 2 or 3 forms, here you just need your iTunes password. It’s that easy. People spend tons of money in apps and they don’t even realize it.
Pros: Once a user buys your app you are done. It’s up to you to keep providing support and keep working on the application. Also you don’t have to deal with nobody else than Apple.
Cons: Once a user buys your app you are done. Meaning that you can’t make any more money from that user anymore (or hardly). Unless your app is really requested and successful, one single app won’t feed your family. - Advertising. Many people give away their applications for free and makes money with advertising.
We could divide ads on iPhone applications in three category: 3rd part managed, direct and self promotion. 3rd part managed you need to use services like AdMob. The good thing is that you don’t have to worry about looking for advertisers directly, but on the other hand you can’t negotiate the earnings and how much you sell your ads for. Direct advertising offer you more control on the ads you show, but you need to spend time in order to find advertisers. With self promotion you basically promote on your free application other application you made that are for sale and there is where you actually make money.
Pros: Free applications are downloaded at least 10 times more than the same application for sale. Lots of people will download your application even if they are not really interested in it just cause it’s free.
Cons: Still if you want to generate real money it might not be enough. With ads you don’t need just downloads, but you also need the users to keep using your application. Sure, making a fart with your iPhone is really cool, but the life span of that application is really short compared to an application that people would use daily. Also there is not an official analytic tool from Apple as far as applications usage, so unless you use a 3rd part SDK (like the AdMob one) you need to build your own analytic system. - Freemium system. Actually there is not a real freemium system cause you can’t upgrade the very same application from free to paid. You need to have a free application as well as a paid one at the same time on iTunes. Basically you can offer the free one with some limitation or ads supported while the paid version is a full application ads free.
Pros: You give a chance to your users to try your application before they spend money on it. If your free version has ads you can make money also from that big chunk of market that doesn’t like to spend money for iPhone applications.
Cons: People can discover how much your application sucks before buying it, so make sure your application has some real value.
Of course there could be other ways to monetize an application, but these are for sure the 3 most common and Apple proof.
Tags: iPhone application, Making money
Posted in Developing, Marketing | 2 Comments »
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