The ever-changing world of mobile app pricing and business models

Today’s must-read is this informative look from the Wall Street Journal at the “evolving economics” of mobile applications. While “free remains king,” as the piece notes, savvy app publishers must consider a wide variety of factors when it comes to monetizing their wares: Premium is often a better fit for iOS apps because iPhone and iPad users are more inclined to pay a few bucks up front than their counterparts on other platforms, while a freemium model is more likely to find success among the Android users who tend to be more frugal. And as tablet usage ramps up, I think users will be more inclined to pay more for a more immersive experience on the bigger screen than they’re willing to pay for a smartphone download.

The bottom line is that app developers must be flexible when it comes to business models — a strategy that works on one platform or type of device may not be the best move for another operating system or gadget. And while advertising dollars will surely grow substantially over the next few years, right now many developers have found that they’re not enough. So as the market evolves, developers shouldn’t hesitate to tinker with multiple strategies and be nimble enough to try something else when one strategy fails to make money.

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Colin Gibbs

Colin Gibbs

Founder and Principal Peak Mobile Insights

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