[Guest article by Lalit Bhise, Founder of Mobisy]
Every now and then people talk to me about converting their kickass idea in to a downloadable mobile application. The reasoning goes that “Everyone is going to use it”. Well here is some light on the actual data from app stores so far.
I have taken some reference data from NextBigWhat.com, readwriteweb and pinch media. As pinch media presentation explains (slides embedded towards the end of this article), making money via in app advertising is an extremely difficult business model to execute. So let’s just stay with the download time fee as a tried and tested business model for downloadable apps. This is the business model of choice for majority of the existing app-stores too.
Let’s take some data from Ovi store.
| Apps downloaded per day | 1600000 |
| Per year | 584000000 |
| Paid downloads @11% | 64240000 |
| Avg price($) | 1.49 |
| Total Revenue($) | 95717600 |
| Developer share @70%($) | 67002320 |
| Total apps on store | 10000 |
| Paid apps @ 85% | 8500 |
| Avg Revenue/paid app | 7882.63 |
As you can see, for international markets average revenue you can hope to earn using your downloadable app is ~$7882, not bad at all.
Please remember the problem with average is that it does not take care of 90-10 rule prevailing in Mobile applications (10% of the applications make 90% of the money). But for simplicity’s sake let’s say that if you can make an app for less than $5000 for international markets, then it’s not a bad idea to sell it on a store like Ovi.
Let’s come closer to India here are some of my extrapolations from numbers published by Airtel App store.
| Apps downloaded per month | 5000000 |
| Per year | 60000000 |
| Paid downloads @11% | 6600000 |
| Avg price in Indian context($) | 0.75 |
| Total Revenue($) | 4917000 |
| Developer share @28%($) | 1376760 |
| Total apps on store | 1000 |
| Paid apps @ 85% | 850 |
| Avg Revenue/paid app | 1619.72 |
So considering that average afford-ability of Indians is about half of western world, (in reality it’s about 1/5 of the western world) to make money by selling a downloadable app in Indian market, your cost of making and marketing the app should be less than $1619. Which is little over than Rs 60000/-
So in short, if you are a developer looking to make money by selling your application / game to Indian consumers from operator app stores , make sure you can make and market it in less than 60000 rs and are ready to wait for 3-6 months to get that money back.
If you can make an app for international markets may be you can afford to spend some more money.
I am by no means saying that don’t make mobile apps. I think you should make them by all means but remember the business dynamics.
[Reproduced from Lalit’s blog]
Pinch Media Presentation
