Every now and then people talk to me about converting their kickass idea into 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 Pluggd.in, ReadWriteWeb, and pinch media. As the pinch media presentation explains, 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 the majority of the existing app stores too.
Let’s take some data from the 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 the average is that it does not take care of the 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 $5000 for international markets, then it’s not a bad idea to sell it in a store like Ovi.
Let’s come closer to India. Here are some of my extrapolations from numbers published by the Airtel App Store.
| Apps downloaded per month | 5000000 |
| Per year | 60000000 |
| Paid downloads @11% | 6600000 |
| Avg price in Indian context($) | 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 avg afford-ability of Indians is about half of the Western world (in reality it’s about 1/5 of the Western world), to make money by selling a downloadable app in the Indian market, your cost of making and marketing the app should be less than $1619. Which is a little over 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 for less than Rs 60000/- and are ready to wait for 3-6 months to get that money back.
If you can make an app for international markets maybe you can afford to spend some more money.
I am by no means saying don’t make mobile apps. I think you should make them but remember the business dynamics. BTW if you are a developer, don’t despair. I have very good news for you coming very very soon…
