If you are reading this article, you’ve probably noticed just how much time people spend on their phones these days. According to eMarketer.com, an average US adult spends nearly 3 hours a day on the phone! Keep in mind, that 90% of the screen time is dedicated to apps. Sounds like a great opportunity to hop on the mobile phone moneymaking bandwagon.
You bet it does. Hundreds of thousands of other entrepreneurs share your thoughts, which makes up for great competition. But what appears to be one of the cruelest red ocean markets is actually a place with a lot of possibilities and undiscovered opportunities due to the rapid technological progress we are facing.
So how to fight through the millions of apps to achieve financial success? This article will guide you through the main aspects of the hottest question by today’s standards: “How to create an app and make money?”
Ok, but before I have started creating my app, how much does app development cost?
Well, we don’t want to upset you, but…
… it depends!
There’s a million and one factor that can affect the essential app development cost. To give you an idea of a budget for your app, GoodFirms have published insightful research that answers a common question of how much does it cost to create an app.
We can divide apps into three categories, based on how sophisticated you want yours to be:
- Basic level: a quality user-friendly app with little to know features. It offers only a couple of functions. Not an online-banking level of “sophisticated” for sure. A detailed 3D game wouldn’t fit the bill of “basic” as well.
- Midtier: wider range of functionality, the kind of WhatsUp with considerably more sophisticated features f.e. Connect with several users, use voice and video calls. More features drive the cost of app development.
- In case of hi-end app development, sky’s the limit if you have deep enough pockets. The cost of such work covers the development of big players like Uber and Instagram, the budgets of which sometimes reach $100 000.
Take a look at these three levels of app development and picture yourself the insane number of factors that can influence its cost. Add the differences in the market prices in different counties and it becomes even more unpredictable. Depending on what features you expect to develop and who are you hiring, the cost of app development may spread from $1000 to $100 000
Considering the app dev costs, the most successful apps are more than just lucrative. Top 200 apps bring $82500 on the table DAILY, while Top 8000 earn around $3500 in a single day. Considering the numbers, the development of an app backed up by a truly innovative idea could have cost even more!
So how exactly do you make money with mobile apps?
Again, it depends! It’s only natural how various can monetary strategies be with global app revenue reaching $188.9 billion by 2020. But, all things considered, it all comes down to 3 categories:
- Freemium/In-App Purchases
You can also mix and swap your preferred monetary strategy. There are no rules really. Try experimenting with one or a couple of them and find the best fit for your product.
This kind of apps is one of the most widely available and lucrative at the same time. Nothing is stopping users from getting the app due to it being free. If the product is of some unquestionable quality, the user will even recommend it to his/her friends or family, beginning you more and more downloads.
But when does it start the cash flows? The money comes in when the users acquire a “Premium” status in your app. It has to bring superior features to the table while clearly distinguishing the “VIP” from the “Basic” users.
Basic accounts often don’t have full access to the product, but still enough content to get hooked or hook others. Take a look at most mobile games on the market. They are free but provide in-app purchases of in-game currencies, special items, or other editions to the game. Of course, it can all be packed in a monthly subscription bundle to make a premium option of the game even more tempting.
Tinder is a particularly clever mix of monetary strategies. Its main product is “Tinder Gold’, which is a full version of the basic Tinder account. Without it, your daily activity is limited (limited swipes) and lots of special features are not available.
But while Tinder Gold is not all that common on the platform, advertising is still in place. Users, who are unwilling to pay, will watch adds to compensate.
Ads are seen everywhere nowadays. And it makes sense. If you want to achieve as many downloads as possible, going free is the most obvious way. Slamming ads on free digital products is an ancient practice and not the most profitable one if you decide to limit yourself with it.
Try mixing these monetary models. Again, take a look at Tinder. Non-payed users earn you money by watching ads while growing into premium and bringing you new downloads by word of mouth advertising.
Spotify is another successful example of a free app model. It is one of the biggest players among music streaming platforms with almost 300 million users worldwide. It users advertising in its free plans to make a profit of those, who are unwilling to pay, AND has a paid premium subscription, which has brought the company a total revenue of $7.44 billion in 2019.
Another popular monetary strategy. It is a great way to get loyal customers. Or even “fake” customers, who have paid for your service but don’t use it. This phenomenon is achieved by a popular model “more=cheaper”.
You have probably noticed many (if not all) subscription-based services, that provide not just monthly subscription, but also 6 months and annual plans, which are usually cheaper. Meditopia serves as a great example of a pure subscription-based platform.
Meditopia is an app, which helps people to find their mental stability through meditation. Aside from the app being a total joy to use, it doesn’t really have much to offer for the users that are not ready to subscribe. So its business model is based heavily on targeting the right audience. Meditopia is now one of the fastest-growing meditation apps, but it wouldn’t pan out if not for extremely efficient targeting. If you plan on developing a subscription-based application, consider making a free offer or else you will have to look into marketing more deeply.
And here comes the bearded dilemma: iOS or Android?
The thing is that there is no ultimate platform for your app. If you are going global, you need an app for both platforms. While it’s true that iOS users tend to spend more on apps compared to Android users (more than twice as much), Android users outnumber the iPhone lovers drastically.
If you look at the mobile operating system market, you will see, that Android takes up 74.6% compared to the iOS share of 24.82%. A considerable difference, but at the end of the day, Android app developers earn roughly as much as the iOS ones, so there’s not that much of a difference while picking a platform.
The only thing you will have to take in mind is not a platform of your choice, but a geographical position of your target audience. Take a look at the American market: Android’s share is just 41.03%, outnumbered by iOS (58.78%) while India’s a completely different case. Android sees unbelievable success- 95.61% market share. Keep in mind, that India is also a leading county in terms of a sheer number of monthly used mobile apps per person.
But even if you choose to play favorites, your company will have to eventually invest in an app for another platform in order to enter the foreign markets. Being limited to just one is also extremely unhealthy for your brand awareness and reputation, as the users of a platform, you chose to avoid, won’t be able to recommend it to anyone. They can even go as far as complain and villainize you for favoritism.
Last words before making money with apps
DON’T FORCE YOUR MOBILE USERS OUT OF THE WEB APPS!
It’s baffling how many companies decide to take down their mobile version of the website and replace it with “Check out our app!”. It doesn’t work this way. Most people will not commit to downloading your app after just finding out about you.
A rooky mistake that is. If you don’t want to make any more of them, check out our services, so we could share our experience with you. Together we will make an app worth downloading.