Mobile "Apps" - Bringing Shift In Mobile Phone Usage

Published by MBA Skool Team, Published on October 22, 2012

Mobile is no longer just a device to talk to another person. It has changed the way we use technology. Mobile applications commonly called as “apps” are powerful tools that have brought in a fundamental shift in the way in which people use their mobile phones and perform tasks which were never heard of. Some tasks for which we would use computers extensively like- computing, accessing the internet, gaming are all available now, right in your powerful pocket device-the mobile and this has been enabled by the humble “apps”.

Introduction of the Apple’s app store in 2008 popularized the concept of selling third party applications for mobile on a single platform and since then the app market has never looked back. In fact the term "app" has become so popular that in 2010 was listed as “Word of the year” by American dialect society.

There is a gamut of apps that are available today-Whatsapp (social networking), Angry Birds (game), Skype (Video calling), Shazam (song finder) etc. Today the Current Average App Price is around $1.95. The cost varies from app costing 0.99$ to 999$ for some apps like “VIP Black”- an app among the exclusive list and one of the most expensive one.

Let us study the trends as to how the apps have evolved and are managing to generate revenues to and are growing as a market.

The initial days

No Demo Version:

When apps had just begun to enter the market, there was no such thing as a demo app and people had to spend on the paid full version. Slowly the market enthusiasm subdued and people started demanding the freedom to try out the apps before purchasing them. The developers realized they could submit the same app twice on the app store, so they would create a cheaper version with some stripped down features which people could try out at a lower cost and buy the full version app if it delivers the satisfaction.

Paying heed to customer’s demand

Limited demo version:

The desire of the customers to try out the apps for free before buying them and the desire of the developers to cash in on the demand for the app, led to a development of this kind of model. This is a trend which continues till date wherein the demo apps are freely downloadable. The hitch is that they do not have the complete functionality- in terms of restricted access to some levels say in a gaming app or limited utility access. It gives the user a feel of the app that too without having to shell out money for its usage. Once the user thinks the app is of use, he could buy the full version from the app store.

Free version with Ads:

Soon after came a period of only free version apps with ads embedded in them. This seemed to be an excellent bet for the users as they get an app for free, but sooner than later they realise that it has a baggage attached with it-the ads. This initially seemed to be a win-win situation, but it did not seem to go well with the developers who would get paid per click of the advertisement and the revenue per click was generally as low as $0.005.

Free full version with Ads/ Paid full version without ads:

The Ads popping in between the running of an application could be a matter of serious discontent to the app user. So the developers came with a balanced idea of free complete version with ads or paid version with no such distraction. This ensured it was a favourable scenario for developer as they received revenue one way or the other. It also gave the user an option to choose for him based on his convenience.

Limited demo version with ads/ paid full version:

This seems to be the best bet among the developers today and in the years to come. It is a clear win situation for those in the business of app development. The demo version gives the customer a flavour of the app and more often than not it helps in converting the demo users to a paid app user. They make money with the ads revenue in the demo version and majorly through the purchase of the full version.

Latest Trends:

Free version / in-app purchasing:

One of the latest development in the app development, is in-app purchasing. This allows user to carry forward their data when they decide to switch from demo version to a full paid version. For example, if you have played few levels in a game and then you decide to buy the paid version of the app, you can resume playing from the same level and do not need to redo the levels. This is of utmost usage in today’s time as it allows adding additional functionality and features to an already existing app.

What future holds for the app world:

As we have seen from the evolution of the apps, the main focus is on the customers. In the app market the ultimate aim is to create a customer delight. That is by means of understanding the needs of the customer and fusing innovation and technology and exceeding the expectations of the end user. App market has become a niche market for the developers; it motivates them to constantly understand the future needs of the market. More and more engagement of the customer will be involved in the years to come so as to generate more and more revenue. And more revenue will help the developers to provide apps for free thereby creating more potential customers and widening their customer base.

Apps have brought in a revolution, the way mobile is used. It has carved a huge market for itself which will not shrink for a very long time. This romance between the customers and the apps will continue for a very long time as innovation brings with it immense scope for new app development- and for human imagination, sky is the limit!

This article has been authored by Nidhi Sarda & Shantanu Mundada from JBIMS.


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