How to make money in the itunes app store

June 15th, 2009How to make money in the itunes app store

Posted by Editor in applications, iphone

Contributor Tim Tang from MaRS has been digging around the apple iTunes store data looking for tips to pass on to aspiring app developers. Tim writes to Wirelessnorth:

The Apple App Store. What should developers know about it? How competitive is the landscape? How should developers price their app? Conversion rate from free app to paid app?

In the past 8 months, I have crawled iTunes, Mobclix, 148Apps, comScore, Techcrunch, and many developer sites. The average price across the store is USD $2.47. The conversion rate from fee app to paid app is typically 0.25%-2%, and one should not consider quitting their day job unless their app is at least in the 99.9 percentile.

Along the way, I have come across many interesting trends. For instance, app pricings are dropping and accelerating due to the downward market pressure from the supply of free apps. Or, despite downward pricing pressure, the expected value of the App Store has increased more than 60% in 3 months since March. However, it’s important to separate the merely interesting from the truly important.

What is truly important, and the more difficult question to answer, is how to improve monetisation and increase revenue per app. In my research, I found two actionable recommendations for App Store developers. Both recommendations resonate with bigger issues in Canada and around the world today: how to become more competitive in the knowledge economy and how to commercialise digital media assets? The answer, as Jacek Utko has eloquently put it on TED, is design.

Major App Store findings and a few pointers from Apple can be found in my report, A Guide to the Apple App Store, which I am sharing with the community. The iPhone and the App Store are sold in more than 80 countries. Yet, limited market intelligence is available for developers to make informed decisions. The purpose of my report is to gather and interpolate data in order to help developers establish both achievable milestones and expectations.

The first recommendation for developers is to design for social, outgoing, inter-connected consumers. iTunes data show this customer base not only has a bigger budget for mobile software, but also they are more willing to try new apps from a range of categories. The second recommendation for developers is to think long term about renewal revenue from the get-go and design apps as delivery platforms for new content on a fixed release schedule.

iPhone OS 3.0 and In-App Purchase will enable on-demand-subscription revenue model that put Freemium business models in the spotlight. For more information, click here for the report and here for the iTunes data I compiled.

LINK: Download the full dataset here

We know a few readers of WirelessNorth.ca have put together an iPhone app or two. Any tips to pass on?

UPDATE: Link fixed

UPDATE2: see also this excellent series by cannuck iPhone developers ENDLOOP: How to start, build, launch and market your first iPhone App in 28 days

Maverick Moneymakers Review

hello, The iTunes App Store is nearly two years old, and Apple still has ... a 14 year old to make money off an original app!
kiramatalishah

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Make Money With Iphone

There other approach for how to make money from iPhone applications is to create them and give them out for free.
But wait, you say. Isn't this about making money?

The wonderful thing about people having access to the internet more often is that they spend more time surfing the net.

This is where MARKETING comes in. Like night follows day, marketing is always there.

So the plan is:

1) Make an application that will allow a client to market their products from. Allow your application to get your clients name out to people looking for that product.

The good news: It's mostly good news for the businesses who will want to market on your applications. It's good news for you because you never have to worry about pricing. Your only job is to make a good iPhone application.
kenseto

Hi,
This Ken Seto from Endloop, just noticed your link to our blog series isn't working so here's a working link: http://blog.endloop.ca/blog/2009/06/12/how-to-start-build-launch-and-market-your-first-iphone-app-in-28-days-part-1-the-enrollment/
Nels Anderson

The download link doesn't seem to be working.
Norm

ya, not working....thanks for the article and coverage.
WirelessNorth

Sigh fixed for reals. Had the file name right, forgot the http path in the url, then the file extension...

Wirelessnorth.ca

June 15th, 2009How to make money in the itunes app store

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