Even the stubbornly optimistic should be disheartened by the stats in developing a new ‘independent’ iOS or Andorid app. I went ahead and did it anyway with Guidar. Crazy? Foolish? Maybe.
There are about a million apps on Apple’s App Store with 25,000 to 30,000 added each month. The Google Play store has a bit more than that. In terms of sheer numbers and fighting for visibility, that’s a truly massive challenge.
Visibility is easier if an app is connected with an established online presence, for example apps from Trade Me and MEGA. Large physical institutions and businesses are also more likely to be visible, such as banks and airlines.
For many others, it’s a graveyard (one third of apps launched on Apple’s App Store are no longer available for download) with harsh lessons. Even if an app manages to get noticed and downloaded, 95% are quickly abandoned. More than a quarter of apps downloaded are probably only used once.
Assume an app does get through all the challenges above, can it actually make money or even just break even? Can a sustainable business somehow be forged?
Again, the stats are depressing.
About two-thirds of all apps on the App Store are free. Over the past few years, the favoured model is freemium. The app itself is free but people are constantly egged on or harassed to use IAP (In-App Purchasing) to buy additional features or even to just turn off advertising.
So much so that it is now estimated that over 90% of all App Store revenue from Asian markets comes from IAP. For the US store, that figure is at 76%. App Annie’s list of the top grossing iPhone apps in the US currently shows that only 3 out of the top 53 apps have no IAP.
The rise of IAP may be linked with the fact that games account for the largest share of apps- about 18%. The games industry is probably by far the best at getting people to buy that extra feature, unlock levels, or that must-have weapon.
But IAP as a monetisation strategy is tough. As David Barnard says:
The problem is, you have to have just the right combination of crazy download numbers, high prices, high conversion rates, and/or recurring revenue to make a freemium strategy payoff in the App Store.
Charging for an app upfront is difficult if not impossible for most. Even the best and recognised publishers of paid apps are facing tough times. The favoured tactic is a big launch, with a spike in charts pulling in more money in the first month than the whole of the remaining year.
By all accounts, launching Guidar is both crazy and foolish.
I’ll write another post on the ‘why” but for the time being the interview in Idealog gives a decent summary:
I felt the gap was there were none that recognise how sensitive people are to their location information… it wants to be seen as a trusted location-based service.
[Work is in progress on a major update to Guidar. If you have an iPhone, please download the current version of Guidar and let me know via Facebook or Twitter if there are any changes or new functionality you want and why. Thanks.]
Subsequent posts on this topic: