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Maximize Returns on Your Apps- The Thought Process

Raghu Mohan
16th Aug 2012
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In the previous article on app monetization, we raised a concern about the difficulties faced by developers in generating a sizable income from existing monetization models for Smart-Phone apps. Despite the various success stories in the app space, majority of the developers face an uphill battle in the quest to achieve a sizeable income from mobile apps. But in such a large target audience, however democratized the system, it is hard to understand why the corresponding revenue numbers don’t add up.

Where are the users?

So it is known that there are a large number of mobile internet users across the world. But how are they spread out. Here are some numbers to pick them out:

1)     Of the thousands of mobile activations, over 75% of the subscribers are from emerging markets such as Egypt, Nigeria and India. So targeting the audience of a developed country would mean leaving out a large proportion of potential app users.

2)     There are more mobile internet users in emerging markets than developed ones. In fact, a large percentile of internet users in countries like Indonesia, Kenya, China etc., have only used mobile internet and have had relatively little or no experience with desktop internet experience.

3)     Credit cards have not been able to penetrate emerging markets as much as mobile phones have. So the industry norms of $0.99 per download will not working in emerging markets even if the users want to buy the app.

So here’s the first conclusion – Target emerging markets! Most of your potential users are here!

Dumb is Good!

Android and iPhone are synonymous with the phrase “Smart-phone”. But what are the features that are expected of a smart-phone?

1)     Surf the web

2)     Run apps

3)     Music on loudspeakers

4)     Play videos/games

5)     Social Media access

All of these features are available on the feature phones. Now this is important because in emerging markets, over 70% of phones are feature phones, while Smart phones such running Android and iOS have a much smaller penetration in these markets.

This is because of most emerging markets don’t have a contract system and a buyer has to pay the full price of the device. Most mobile phone users cannot afford a $400 Smart-phone and hence settles for a cheaper phone with the same functionality.

The second conclusion: Make your apps compatible with feature phone platforms as well. There are a lot more feature phone users than smart-phone users!

Hybrid Monetization models

The flaw lies in the tool for monetization. Not every mobile phone user is a credit card user. This in a way fuels piracy, as it is almost an alternative for getting a paid app because you don’t have a credit card.

A model that has worked for India in particular is the use of prepaid credit for purchases. A paid app can be downloaded using prepaid credit on a SIM card or can be carried over to a monthly bill which a user can pay.

With that, here is our third and final conclusion: Think of other means of monetization specific to regions. This one size fits all approach is not working everywhere.

We hope that these conclusions have helped you gain a users perspective into app development. These insights may not help you become the next Rovio, but is aimed to make the developer aware of more avenues to maximize the returns of your app.

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