Right now everybody can develop mobile application. It is not a problem to find somebody how will do it even for us. The cost of needed tools and knowledge is so low that more people are trying to create new mobile application. And then they are trying to sell it. At the beginning it seems that selling mobile application is quite easy task. But it is not true. I find confirmation of that sentence in emails.
Quite often I get emails with similar question about sale model of mobile applications. In most cases the question is as following:
[quote]Last time I have created mobile application. I am trying to sell it but without a success. Can you help me…[/quote]
Of course the ending of that email depends on a specific situation. But in almost all cases, answer on that question should contain information about which sale model of mobile application should be used. Unfortunate those emails are being sent when the application is already created. And in most cases it is too late for any help. Many developers forget about one issue. This issue can be really good described by the following sentence:
[quote]There is no problem with development of any application, but will people buy it?[/quote]
This sentence is valid for all branches of economy. Because of the fact that access to any kind of production capacities is easy, you are able to create almost everything you want. Problems starts when you want to sell your product.
Situation of mobile applications market is similar to other branches of economy. In theory you are successful when you are able to find your niche. Then you should find a product that will fill in that gap. And from this point some problems can occur. As I mentioned before – creating application is an easy process. But you also need to have some money for promotion. Many people forget about it and think that you only need to create application and then you just have to publish your application in market.
Unfortunate mobile market does not work this way. You should act similar as in other branches of economy. First you need to prepare. So you should analyze the market and prepare business plan. You should think at least about the following elements:
- How many people will buy your application?
- What is the cost of development?
- Are there any competitors?
- Do we have any budget for promotion?
Sometimes after this analyze you will find that your brilliant idea is not worth of implementation.
The main criterion that you should take into consideration when you are deciding about starting your project is profit. At the beginning you can have some problems with profit estimation. Maybe you will think that you do not have enough data for doing that. Please believe me you will find most of needed information in the Internet. I will try to show you how it can be done.
Let start from easy case. Our idea is similar to other application that is already published. Of course our application will be better than other. It will provide many innovative features. When we are trying to estimate how much we can earn from our mobile application the most important number for us is total [mark]number of downloads[/mark] of our application. When there is similar application in market we can always check how many times this application has been downloaded. To do this you should check for example website xyo.net – you will get following data:
There is another way of doing it – you can also check how many [mark]comments[/mark] that application has. Sometimes this number is not connected with downloads, but in most cases applications that are downloaded often have a lot of comments. You should also remember that comments are powerful source of inspirations. You will find there information about users’ needs. You should check it when you will try to develop similar application and then you should improve or add most needed features to your application.
This method of estimating total number of downloads will not work when you will not be able to find any similar application to yours’ idea. This situation will occur when your application will be very innovative. In this case you should use statistical data. Sometimes not all needed information will be available. Please look at the following example from real life:
We would like to create an application for Android that will help to study one of subjects in secondary school in Poland. Still we are not sure how we will earn money. The first idea is that users will pay for that application. There is also idea that together with paid application there will be free version with ads or with limited functions. The main source of our profit will be paid version of our application.
Let try to estimate how much we can earn. The first thing that we should do is estimating how many people will download our application. At the beginning this question seems to be difficult. I propose to think what information do we need to make such estimation. From my point at the beginning we need the following data:
- number of children attending to secondary school in Poland,
- market share of devices with Android,
- willingness to pay for mobile application.
You can find more factors that those three, but I think we can start with those. In Poland [mark]1,3 millions of children[/mark] are attending to secondary schools. [mark]70% of smartphone users[/mark] are using devices with Android. And the most important thing – in Poland people do not buy mobile applications. Only [mark]0,5% from total number[/mark] of application downloaded to Android devices have been bought. After combining those three numbers it seems that our application will be bought only by [makr]4550 people[/mark]. In this calculation there were used some simplifications. I have assumed that children will be able to buy application. It means that they are connected to theirs Google Play account credit or debit card. In Poland still it is not so common, so this number should be lower.
The second number that is needed to estimate profit is price of application. This price should be selected reasonably. You should check the price of other similar applications and you should know the market. You should remember that price is also connected with quality of your application. So if the price is too low, users could think that your application is not good enough. In Poland the highest price what you can get for your application is [mark]5 zł[/mark]. Polish users will not buy your application when the price will be higher.
Right now we should have all needed data. We are able to calculate our profit. I will consider optimistic scenario – our application will be bought by 4550 users for 5 zł. It will give as 22750 zł of profit. But we should remember that 6825 zł will be taken by Google and also we will need to pay taxes – 2850 zł. Finally we will [mark]earn 13000 zł[/mark]. But wait a moment, we didn’t calculate costs of development and promotion. After everything it can turn out that creation of this application will cost us more than we earned. In this scenario we should decide not to start this project.
Finally, I would like to encourage all of you to make similar simulation before you will create first line of code of your application. Of course when you do not care about the profit this element is not important. But many developers are creating application to earn some additional money. Please remember that this kind of analyze will be a strong foundation of your project and future incomes. You should also remember that as a cost you need to consider not only spent money, but also your time. This time can be invested in other project that has bigger chances for a success.
1 EUR ~ 4,16 PLN
1 USD ~ 3,05 PLN