Are paid apps dead?

Gartner predicts 94.5% of downloads will be free by 2017

In its new “Predicts 2014: Mobile and Wireless” report, analyst firm Gartner, Inc. forecasts 94.5 percent of downloads will be free apps by 2017. Looks like the question for mobile developers is no longer, “How should I price my app?” but rather, “How can I monetize?”

Time for a financial attitude adjustment

Brand recognition, product awareness and making apps for the fun of it will remain big motivators for app developers over the next few years. But anyone hoping to turn a quick profit on mobility trends is heading for a world of disappointment. Gartner goes as far as to predict that through 2018, less than 0.01 percent of consumer mobile apps will be considered a financial success by their developers.

“There are so many applications that are free and that will never directly generate revenue,” warns Ken Dulaney, vice president and analyst at Gartner. “Furthermore, of paid applications, about 90 percent are downloaded less than 500 times per day and make less than $1,250 a day. This is only going to get worse in the future when there will be even greater competition, especially in successful markets.”

5 tips to developing the right mindset

When all is said and done, we still see plenty of opportunity for developers who come to the table with the right expectations. What are they exactly?

  1. Your app will likely be free, at least in the United States.
  2. In-app purchases, in-app advertising, paid subscriptions or a combination will drive profits. Analytics and A/B testing will be the keys to determining what works for you.
  3. Paid apps will deliver beyond-amazing user experiences, or offset the costs of things like additional storage or enhanced functionality.
  4. Acquiring users will mean looking beyond U.S. borders, especially to Asia for mobile games.
  5. Developers must prioritize user experience as more users find apps through friends, social networks and recommendation engines.

HTML5: Almost ready for prime time

An interesting finding in Gartner’s report is a tidbit on the future of HTML5. The firm continues to see iOS, Android and Windows as the biggest platform players in the next three years. No surprise there. What is significant is that by 2017, the fragmentation and performance issues plaguing HTML5 may come to an end.

Dulaney notes that businesses and independent developers looking to support multiple platforms without vendor lock-in “will drive increasing interest in HTML5 as a somewhat-standardized, widely available, platform-neutral delivery technology.” Overall, Gartner predicts 50 percent of new Web apps will involve complex client-side JavaScript as mobile browsers step up and become “a sophisticated application delivery platform.”

In other words, the time for HTML5 is rapidly approaching, so get ready for it. We’re just not quite there yet.

Need more app monetization tips?

For more insight on how to make money with mobile apps today, check out our previous blog posts:

Happy coding!

 

Kii Cloud is a full-stack mobile backend to accelerate iOS, Android, HTML5 and Unity app development. Optional ad network integration is available to help you monetize. Get started with a free account at developer.kii.com

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Waqas Makhdum

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