Free or Fee? Hybrid Mobile Apps Are Most Successful
Posted: December 09, 2009
By Sarah Jaferi
We can all recall the time when the main purpose of a cell phone was to communicate. Now with the arrival of cell phone applications, the question arises, which ones are better, free or paid?
According to John Albers of TMP Directional Marketing, cell phone usage is increasing, and people are expecting more out of them. People want to be able to communicate and get information at any time and anywhere. Businesses realize this and are planning accordingly. At first, almost all content and information provided by mobile devices was free. Then, the trend shifted to fee-based mobile applications. The Yankee Group estimates that U.S. paid-smartphone application revenues will reach $4.2 billion by 2013.
The new model that businesses are turning to offers a combination of both. The realization is setting in that although there is a market for fee-based applications, people will always prefer something that is free. Providing options helps the consumer gain confidence and trust your business. If there is one thing that one can relate to, it is that diversification tends to be the most effective course of action.
In regards to category, the results are somewhat obvious - news and social networking applications in the iPhone are disproportionately free, since a) it’s difficult to charge for content that’s freely available elsewhere and b) social networks grow in value with the number of participants. Entertainment and games are disproportionately paid, reflecting a belief that people will pay money to have fun. Since the App Store’s applications are disproportionately entertainment and games (helped along by a lot of $0.99 e-books), the App Store’s applications are predominantly paid. The most common price for an application in the ‘games’ category is still $9.99, although the second-most common price is $1.99.
It’s hard to draw generalizations about the other categories. In the middle, the number of applications per category is still pretty small; but applications that rely on user-generated content are disproportionately free, and those that rely on developer- and designer-provided content disproportionately cost money.
According to Greg Yardley, CEO of Pinch Media, numbers show that free apps, as a category, tend to be used 6.6 times more often than paid apps (this figure incorporates both the increased download popularity of free apps and also the slightly decreased frequency-of-use of free apps versus paid apps). On average, free applications are used heavily at first but usage levels off quickly - the average app lifetime is 12 runs.
Loading ...