As I work on building a small app business, its been great to hear the public commentary on pricing iPhone apps lately. The blog from Marco Arment and TechCrunch both point out clearly that mass market customer acquisition apps have to be free with in app purchases to have any chance of being downloaded.
Marco’s blog is especially interesting because he’s speaking from personal experience and is trying to solve a problem today. As a consumer myself, I’m much more likely to download a free app than a paid one. In fact, I only have one paid app on my iPad and none on my iPad. And.. I dont even use that paid application more that once a month. I have owned an iPhone for 5 years and an iPad for 3 years. 90% of apps on the Apple app store are free and 6% are priced at $0.99 as per Flurry, a market research firm.
There is also a great book by Chris Anderson called “Free” that can help you understand how to make free work for you. Even this book is no longer available for free. You might be able to find an illicit copy but its worth buying on amazon if you really serious.
Personally, I don’t see the point of creating a free app that provides a ton of value to the user. Your free app only helps Apple build a stronger ecosystem around the iPhone. Build something of value and don’t be afraid to charge for it.
I’m looking at building an location based iPhone app to help tourists. I am confident that I don’t want to give this app for free. I want to charge $20. You may think that this is absurd considering what I just wrote before but the fact is that this application is not a mass market app. It is a niche app for a very small and targeted set of customers. And, in talking to these customers, they have indicated that are comfortable paying $20 for this app. I dont think this app will make millions of dollars let alone even $500,000.
To get $500k, I will need to sell this application to 25,000 customers. That will take more than 20 years based on current estimates of users. 🙂
So.. why build it? Because I believe in the usefulness of the idea and the value it provides users. I dont expect to spend a lot of money building it and I already have customers to sell it to.
Really cool stats from eBay India in their 2012 census.
Here is what stood out for me:
Delhi, Mumbai were followed by Jaipur as the 3rd ranked city. This beat Bangalore, which was 3rd in 2011.
Top ranked states had Maharashtra followed by Delhi
Maharashtra is selling
- Men’s Fragrances
- Laptop Skins
- Sewing Machines
- Gemstone Pendants
- Decorative Crystals
- Razor Blades
- Wrist Watch Straps
Weird that razor blades are ranked so high.
Finally, they are buying
- Data Cables
- Men’s Fragrances
- Indian Stamps Miniatures
- Smart Phones
Which is consistent with every other big market. Most folks in India seem to be interested in buying smartphones
Bunch of other really interesting data here: http://shopping.ebay.in/census/pdf/eBay_Census_Guide_2012.PDF
Kleiner Perkins Caulfield Byers published their 2012 Internet Trends report in December 2012
Here are some highlights for India and the world.
- #3 rank in terms of total number of Internet users by country but still only 11% penetration
- 137 Million Internet users with 50% added in the last 4 years
- 26% YoY growth
- India has approx 25% of the total number of internet users in China and 60% of the US’ connected population
- Global mobile traffic is 13% of total traffic
- In India mobile internet traffic is higher than desktops since May 2012
- 44M smartphone subscribers in India with this being only 4% of total mobile subscribers!
- #5 in country rankings behind China, US, Japan & Brazil
- iPad growth is 3x iPhone Android phone growth is 6x iPhone – clear leader
- Only 1B smartphone users out of 5B total mobile phone users
- 29%+ of US adults own a tablet or eReader
- Mobile Apps and Ad Spending growing
- 67% – Mobile app spend
- 33% – Ad spend
- 24% of online shopping in US on Black Friday on mobiles and tablets
- iOS devices dominate this segment with 4:1 ratio over android for purchasing on mobile devices
Computing platform OS share
- iOS + Android now at 45%
- Windows – 35%
- Tablet shipments exceed PC shipments in Q4:2010
- This report is predicting stagnation of PC sales and continued increase in tablet sales until 2015. I dont agree with this entirely
- Tablet install base to overtake PC is Q2:13
- Encyclopedia Brittanica went out of print in 2012
- Many kinds Inspiration sources – Pinterest
- This one I absolutely dont agree with. To me pinterest has no appeal and I’m not sure creative professionals (designers) get all their inspiration from there. See: Behance and many others
Reimagination – Useful sites and new ideas
- Gumroad – selling digital goods
- Quirky – Collaborative product design
- Smart devices – smartthings, lockitron
- Coursera – I love it. Amazing courses.
- Read slide 58 and then read it again.
- Still shocks me that US residents spend 3hrs+ in front of a TV
- US Debt is very high at 97% of GDP making it the 10th most indebted country in the world
Great presentation overall.