2 ms·
Paid apps aren't very relevant in the long term though, for several reasons:` - It's a race to the bottom. New competitors enter and price their app lower to c
by Joeri 16y ago
Paid apps aren't very relevant in the long term though, for several reasons:`
- It's a race to the bottom. New competitors enter and price their app lower to compete. Existing players are forced to adapt. Marginal cost is zero so apps eventually settle at the lowest possible price point at which there is revenue ($1).
- People buy apps only once. Right now the market is growing, but once it has become saturated (everyone has a smartphone), sales for existing apps will drop to near zero.
- Freemium always wins the low-end. The low-end doesn't pay for content, so the only way to reach them is to offer the content for free. Revenue is made through advertising or by up-selling after adoption. The web went free because it turns out the low-end is bigger than the high-end.
If it's a given that the paid app market is going to dry up (and I think it is), then it's also a given that app developers will have to have a free strategy. Going free means having more eyeballs, because revenue per user is lower. So, you need to be on the biggest platform, and android is going to be the biggest platform. Why? Because google "gets it" and is spending all their resources into buying up market share, including the low-end (where most eyeballs are). Apple is not going to fight for the low-end, it's not in their DNA. Everyone else is simply not in a position to compete.