For all of you mobile app developers who dream of creating the next hot iPhone, Blackberry or G1 application, a key question to ponder is this: once you’ve conceived, developed, tested and launched your killer app, how long will it remain killer?
Well, TechCrunch highlights the answer from a recent Pinch Media presentation, and it’s not the cheeriest news for mobile app developers. It turns out that, for free apps, less than 20% of users return to an app even one day after downloading it. And by day 30, less than 5% of users are still utilizing the app. And for paid apps, the drop-off is even slightly steeper. Grim.
The moral of the TechCrunch story is this:
It answers the eternal question that all iPhone developers have: Should my app be free or should I charge for it? For all but the most successful apps, the free route does not make much sense because there is not enough time to recoup the costs of developing the app from advertising.
Free apps tend to be run 6.6 times more often than paid apps, but even with that increased usage, it is not enough to make more money.
Yardley estimates that less than 5 percent of all apps would make more money right now with advertising than charging for paid downloads. His advice: “Unless there is something inherent about the app that screams free, sell it.”
I completely agree with Yardley’s math and logic, but I think there’s another important lesson to be learned here. He addresses the issue of maximizing revenue, but ignores cost containment as a means to profitability. Said differently, another powerful driver of profitablity is the cost and speed in bringing your mobile application to market.
By finding ways to develop, test and launch mobile apps more quickly and for less money, developers extend the money-making window, enable themselves to launch more apps per year, and decrease their break-even levels.
What do you think — what’s the secret to profitability for the creators of iPhone, Android and Blackberry apps? Drop a comment and drop some knowledge on us.