Are you convinced you’ve got a brilliant app idea that could easily equal the success of ‘Flappy Bird?’ Don’t quit your day job just yet! With a plethora of free apps and increasing competition, the business of making money from apps will only get tougher. Soon, more than 99.99 per cent of consumer mobile apps will be considered as financial flops by their developers. Is the gold rush over?
According to a recent study “Predicts 2014: Mobile and Wireless” carried out by Gartner, less than 0.01 per cent of mobile apps will be considered a financial success by their developers in the next four to five years. The sheer number of apps on the market is a key factor, making it harder for apps to attract a paying audience, with Apple’s iOS and Google’s Android stores now each have more than one million on tap. Consumers are therefore increasingly turning to recommendation engines, friends, social networking, and adverts to discover new apps, rather than sifting through the multitude of offerings.
“The vast number of mobile apps may imply that mobile is a new revenue stream that will bring riches to many,” said Ken Dulaney, Vice President and distinguished analyst at Gartner. “However, our analysis shows that most mobile applications are not generating profits and that many mobile apps are not designed to generate revenue, but rather are used to build brand recognition and product awareness or are just for fun. Application designers who do not recognise this may find profits elusive.”
In addition, the bounty of good, free mobile apps means there is almost always a free app option that consumers can choose; thus pushing the bar for what a paid app should be even higher. Gartner predicts that by 2017, 94.5 per cent of all downloads will be for free apps, which is up several percentage points from 2013’s figures of 91 per cent. But there remains a huge financial reward for the right apps as Gartner also predicts that the importance of app advertising and freemium app business models, which rely on monetising a free download via in-app purchases (IAP), will continue to grow for developers.
The End of the Indie App Developer?
Sure, there is the occasional run-away success story such as the Indie smash hit ‘Flappy Bird’ that fills young indie developers with aspiration to do the same. Yet plenty of great small apps, such as ‘Instagram’, have been snapped up by tech giants. Leaving us wondering if indies can really compete with bigger and better-funded companies?
Indie developers dream of making their own apps and commanding their own destiny. It seems that if you are familiar with the rudiments of coding and know your way around various native frameworks, the jackpot is within easy reach. But as Gartner suggests, their biggest challenge is often not only in creating a brilliant app, but in trying to reach their audience. It seems that the top players such as King.com (check their current vacancies here), Supercell, Kabam and Mojang still hold the true recipe for success; and more importantly, the resources to produce and distribute apps at scale.
If you do have an idea for the next killer app, a safer option might be to become a so-called ‘moonlighter’; app developers who keep their professional full-time developer job by day or hobbyists who create mobile apps in their spare time.