Pricing strategy for iPhone app is a very important thing which affects revenue. Choosing right pricing model for your iPhone app is quite difficult. It heavily depends on your app and on your potential customers auditory.
In this post we’d like to overview and try to understand in which ways developer can monetize iPhone app. We will not discuss advertisement models, because we believe that ads fit only specific group of apps. Most of the iPhone apps should not have ads in them, because it distracts user and will not generate much revenue.
So let’s take a deeper look at monetization strategies that presuppose that you are going to sell something on the AppStore. There are no many options to choose:
- Paid app;
- Free app with in app purchase.
Paid app is an easy way – you just choose price for you app and each download will generate you some revenue. But your potential customer will only see icon, name, description and screenshots of your app before he makes a decision to buy your iPhone app or not. Such purchases are very emotional – icon, name of the app and screenshots play a very significant role here. If you charge customer $0.99 for your app, most probably that he will not even read your description. If your app is quite expensive, we suppose that your customer will first try to find out about your app as much as possible, e.g. on forums and review sites. So in order to increase sales you need to have attractive icon, perfect app name, great description and awesome screenshots. Even better if your app is featured on review sites.
What about free app with in app purchase? This strategy has a significant advantage – you allow your potential customer to try product before buying it. Your iPhone app’s icon, name and description are still very important, but anyway selling free product is much easier, than paid. If you are choosing in app purchase as a monetization strategy, then you should be sure that your free part of the app will drive you sales, i.e. your need to make your customer like your app. You have to determine what functionality is free and what functionality is supplied only via purchase.
Imagine that you have a great app for iPhone, you create a cool icon, name, description, screenshots, request reviews on popular sites and post about your app in thematic forums. You are sure that your potential customers will love your app. It seems that the best way to earn some money from your app is to make it free with in app purchase and allow user to try your app before buying it, but practice of selling own iPhone apps on the AppStore tell us that it’s not as simple.
Lets take a look at an example. We’ve got two games – iQBloxing and iQBloxing PRO. iQBloxing is free and ships with 7 levels, additional 26 can be bought via in app purchase ($0.99). iQBloxing PRO is a similar game, but with 40 levels and it’s paid (same $0.99). iQBloxing was released first, then about 3 weeks ago we released iQBloxing PRO. We thought that this two products will compete with each other, but we were surprised. Downloads of iQBloxing were not reduced by launch of iQBloxing PRO, instead they were increased a little bit:
Now we have two iPhone puzzles iQBloxing(free with in app purchase) and iQBloxing PRO on the AppStore which generate almost equal revenue! So paid and free versions do not compete with each other. It seems that there are two types of buyers on the AppStore: first type of people want to try a free version before buying the app and the second type would like to purchase fully-functional app without any additional costs(we suppose that most sales are highly emotional-driven).
It’s up to you to decide how are you going to monetize your app, but you may want to think about such approach.
Please let us know your experience in selling iPhone apps on the AppStore!
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