https://hbr.org/2015/11/the-changing-economics-of-app-development
App invention has become huge in our generation and is a marketplace of over 3 million different apps. 1600 submissions are submitted everyday to Itunes by companies and people wanting to introduce their ideas to the market place. This has made the market over-saturated where successful products (apps) and developers only make it if they have expensive and well planned marketing plans.
The market, however, has shifted away from the big developers and the "middle-class" (regular everyday people) have begun to produce apps which are taking over the market. To support this claim, over 20,000 different app developers have produced revenue streams of right around $100,000 while most developers in general only make around $500 per app they produce suggesting profitability is spread out among producers and not all centralized into one large company. Also 45% of the app industry revenue has come from companies outside the top ranked apps in 2015.
What makes this market so tough, however, is the "Ghost app" phenomenon. Only 5% of apps account for 92% of the total app downloads. This means that 95% of apps are ghosts and will never be used by the market. On top of this, an average app usage goes down 85% after a 60 day period making app revenue for businesses short lived even for popular apps.
In our generation, many people have become entrepreneurs by relying on this market place. While the opportunity for profitability is definitely there, there is also the risk that your app will become one of the 95%.
How would you approach the app industry and how do you think this market is worth investing into? How do you become a big fish in the big pond of the app industry?
4 comments:
The app industry has become too cluttered. Therefor you need to weed out the apps that have no real value, which of course depends on what each person thinks is valuable, but obviously the so called "ghost apps" are unpopular and no one uses them, so why keep them. People stick with what is familiar and available regarding apps, so why keep what they won't use?
And for those apps that everyone uses, they must stay on top by catering to their customers and increasing their advertising so that their product will stay popular. It's all about the presentation of the app and it's availability in the market.
It is pretty intriguing that the app market is compiled of elements that essentially remain short term revenue makers. However; that being said, the app industry separates itself in its nature of entrance. By allowing app developers from all walks of life to produce a product is an interesting feat. It does lead to issues such as "ghost apps" but it is a price that the market needs to play to allow the best product to reach the consumer. So as to restricting the market may not be as fruitful.
If you analyze the App Market in relation to that of the product life cycle, you can see how this market segment is on the tail end of the maturity stage and into that of the decline stage. This happens with many industries, and in the case of the App Market, it seems like its time has come. The big reason behind this deals with the expansion and growth possibilities; you can only develop so many apps that are practical and unique. Many apps now a days encompass many different components and make them unappealing and similar to others, hence the low download and revenue stream in addition to the "ghost apps".
I agree with the above comments. But a huge thing to consider, when inventing or creating anything, is that in order for a steady stream of revenue to be created, the product must be something that the consumer will always need or use. Now of course, one can't create something as complex as an app that would cater to this need of every user of a smartphone. I think a key approach mechanism would be to pick a specific market within the whole app market and directly target your app towards consumers of that market. For instance, music apps, possibly creating an app involved with alerting the user (based on their music tastes) when new songs similar to the ones the user likes, are available, even before on the radio. This is useful in that, eventually people get tired of listening to the same songs over and over again, but don't always have the time to sit down and fit new ones that fit their preferences. That's where this app could come into play.
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