Mobile Application Market To Expand With New Study That Provides Remedy For The Failure Of Apps

Posted On June 29, 2021     

The mobile application industry is a little different than the other industries as free apps are more common than the paid apps for most categories. Generally, in markets based on products, free ones are primarily used to support the actual paid product. Through decades, the apps market eventually shifted towards free versions, so much so that in July 2020, free apps on Google Play amounted to 96%. However, even though free apps are more popular, it was seen that 63% of free apps have less than 1000 downloads per month. Moreover, 60% of app publishers generated even less than $ 500 a month in 2015.

New research has been brought forth that explores the dynamic interplay between the paid and free versions of apps over their total lifetime. Through investigation, they suggest some possible remedies for the failure of apps. This study is a great contribution to Mobile Application Market as it provides answers to several complex questions that worry the app publishers. The team examined the question of whether it is over for paid mobile apps or if the paid apps can help make free apps more profitable. Further, it looked into the aspect of profitability and how app publishers could earn more by deploying or eliminating the free and paid apps.

To come to a conclusive result, the team scrutinized app publisher’s decisions wherein free, paid, or both versions of an app were offered while the dynamic interplays between the free and paid ones were the main focus. First, the team demonstrated the influence free and paid versions have on each other’s demand and revenues. They realized that either of the app versions helps increase future demand for both versions through social media. Moreover, uniquely if both versions are offered, they will hurt the demand for each other in the current period.

Their second analysis revealed that the general optimal launch strategy is to offer the paid version first. This is because they can help produce download revenues from the very first day of sales. However, other versions rely on a sizeable user base which gets built overtime only. Thus, the research team proposed that publishers should depend on paid apps to help them earn operating capital, launch cost and recuperate development. Third, the optimal versioning decisions and their changing patterns variate as the app ages and also varies as per the app’s category. They show that relative profitability for most free apps increases with app age while paid versions decline.

The present study is immensely advantageous as it helps publishers understand why many apps with free versions fail to generate sustainable revenues for early-age operations. Through this published work, the team has encouraged publishers to pay close attention to the interplay between free and paid apps so that profitability could be increased.

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