Mobile Application Profit Strategy difference: Free more money than pay

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Tencent Science and Technology (Tom) Beijing time March 4 News, according to foreign media reports, at present, including Apple, Google (micro-blog), Amazon and Microsoft, these technology giants have launched its own mobile devices for its own application stores, but for the purchase capacity, store size, market positioning and business model strategy, Many application developers have adopted a wildly different pricing strategy for these stores. Some analysts believe that this targeted application pricing method is expected to generate more revenue for developers, but at the same time it may be caused by some of the many mobile devices in the modern consumer.

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Famous Cross-platform Music recognition service Cutchie (SoundHound) is a mobile music app developed by the SoundHound company, but the price of the app is slightly different on different platforms. For example, for some iphone users, the iOS version of the app sells for $6.99 trillion, and on Google's Android platform, the cookie is priced at $5.99, and in Nokia's App Store, the cookie is priced at $4.99. But in Microsoft's Windows Phone App Store, the app allows users to download it for free.

In fact, hunting cookies are not the only one by one mobile apps with multiple pricing standards, as application developers, including children's games to fitness recorders, who need to get a lot of data from mobile devices, are experimenting with different price versions of apps and starting to try out different business-profit models.

To be sure, the "free" application is still the main direction of consumer choice at present. While the iphone and ipad users are often more likely to spend their money downloading paid apps or paying off apps than Android users, research has found that users of Amazon's App store are more likely to use the app-purchase feature And the mobile app economy is becoming increasingly active as users upgrade their smartphones and start using more high-end devices.

"Everything is not conclusive at this time," said Katie Cutchie, vice president of Hunting McMahon, based in California State Santa Clara (SANTA Clara, Calif). "So far, the total number of game-hunting cookies has been downloaded 130 million times."

Platform contention

At the end of 2012, the average price of a paid iphone app at Apple's App store was $3.18 and the average price for a paid ipad was $4.44, according to a report released by Distimo, an application-tracking company. Meanwhile, the average selling price for the Google Play store and the Amazon App Store is 3.06 dollars and 2.84 dollars respectively. It should be noted that the Apple App Store typically extracts 30% of the revenue from the application sales. "We will continue to work to provide them with the best ecosystems to help them create the world's most innovative applications," an Apple spokeswoman said. ”

Some analysts believe that the pricing strategy for paid applications is likely to extend to the application purchase area. For example, Aaron Reuben, head of Amazon's App Store, said: "Amazon has started allowing application developers to test different pricing strategies in their applications to help them better understand consumer habits." "Through this approach, mobile device users may be exposed to different promotional ads at different times, while also helping developers better understand the time and amount that consumers are most likely to consume."

Current application developers are focused on two mobile platforms, Apple and Google, because they combine to cover 87% of U.S. smartphone users, according to comscore, a leading research firm. Currently, the App Store and Google Play store have 800,000 and 700,000 applications respectively, while Microsoft and Amazon have 125,000 and 70,000 applications respectively. Gartner, another market analyst, says most of the apps in the App Store are free. Gartner estimates that about 50% of apps in Apple stores are free, compared to three-fourths of the free ratio at Google's Play store.

Purchasing power

Many application developers say they have found different pricing for different app stores to be attractive to consumers. In general, Apple's App store users are more likely to spend money on apps than Google Android users, including downloading paid apps and buying apps. The main reason for this is that some low-end Android smartphones and tablets are designed to attract the attention of lower-income people who are less able to buy than Apple's iphone or ipad users, the application developer analysis argues.

Infectious Disease theme strategy game "Plague Inc" game developer Ndemic Creations CEO James Van Gogh (James Vaughan) launched the game against the Android platform last October, Van Gogh initially wanted the game to be priced at 0.99 dollars like the iOS platform. But given that the Android platform is less willing to buy than iOS users, Van Gogh finally decided to release the game for free on the Android platform.

Van Gogh has revealed that the company has benefited from the free application of downloads because it is possible that some users will eventually upgrade to a paid version of the app. So far, more than 5 million Android users have downloaded "plague Inc" for free, although Van Gogh has not made it clear how many users eventually upgraded the game to a paid version, but said "the conversion rate is very high". It should be noted that Van Gogh knows that iOS users are willing to buy more than Android users, so the company launched the game on the iOS platform last May for $0.99. It is reported that the iOS platform's "Plague Inc." download has exceeded 4 million times, and for developers Ndemic brought millions of revenue, but Van Gogh declined to disclose specific data.

Pricing strategy

It should be said that more and more developers are now inclined to adjust their prices gradually after the application is released. Textplus Inc.ceo Scott Lahman, a free messaging service provider, sold its price at $4.99 in December 2009 when the app was released for the iOS platform. But then Raman would cut the app down every few weeks, at the lowest point, even for 0.99 dollars. Finally, after taking into account factors such as profitability, Raman locked Textplus's pricing at $1.99 trillion. At present, Textplus total download has exceeded 40 million times (most of them are supported by the advertising of the free version of the application), and the company can create 12 million U.S. dollars per year revenue.

In this case, Raman explained: "This is a very predictable situation, because after the price reduction, our download volume will increase." ”

In fact, advertising has a certain impact on the pricing of applications. In general, an ad-free application means that it is difficult to continue to generate revenue for developers after they have completed the paid purchase process. Katie McMahon, vice president of Cutchie, said that "the company has invested more resources in the development of free apps because it has almost unlimited profitability".

Mark Wang, head of marketing at Game Hive Corp., a game developer based in Toronto, Canada, said: "Paid users are really more valuable, but their apps will have no advertising at all, and developers need to tap the maximum value of their users." "Game Hive Corp. is currently offering $0.99 in iOS, Android, and Amazon platforms, as well as a free version of the app, which is limited in functionality."

The outlook is unpredictable.

Developers say users in the Amazon App Store are often more likely to buy more items in their apps, which may be related to the habit that some consumers are accustomed to buying from Amazon for a variety of products. iOS users are second only to Amazon in terms of application buying capabilities, while Android users are ranked third, but these app stores refuse to give users average consumption data.

However, developers are also at risk for applying different pricing strategies. "Too much application pricing may confuse and even anger consumers," said Sarah Rotman Epps, a Epps research analyst at the Authority's independent institute. Because consumers now have more mobile devices, applying pricing should become as transparent as possible. ”

At the same time, developers say that as they become more familiar with consumer buying habits, they are likely to make more changes in the pricing of applications in the future, such as pricing applications, songs, ad rates and even application purchases based on the specific model of the consumer's use of the device. Of course, this part of the developer is also aware that such a plan faces many technical challenges and may eventually annoy those consumers who think they have purchased the wrong device.